Information infrastructure and industrial structure upgrading. The impacts of information infrastructure have obvious spillover characteristics, which provide the general technologies to promote the fourth industrial revolution12,13 so that the impacts can comprehensively affect all industries of the economy. On one hand, information technology innovation brought by improving information infrastructure has continuously spawned new industries, new formats, and new modes, and the emergence of new industries has further accelerated the optimization and upgrading of industrial structure. On the other hand, information technology enables traditional industries to realize the transformation and upgrading to promote industrial structure upgrading. In essence, constructing information infrastructure will allow regions to develop industries according to their comparative advantages, and then achieve growth through trade. The specialization of labor division and convenience of the transaction will promote industrial agglomeration and continuously accumulate favorable factors, thus forming a "growth pole" in self-strengthening. At the same time, industrial agglomeration and division of labor brought about by information infrastructure may also bring the "diffusion effect", that is, regions with the relatively less advanced industrial structure can take advantage of their comparative advantages to undertake some industries from other advanced regions, or further strengthen the development of advantageous industries through knowledge spillover and technical exchange. Exogenous comparative advantage, endogenous specialized economy, and transaction efficiency determine the division of labor and trade patterns among regions 14,15, while information infrastructure improves transaction efficiency and accelerates the division of labor and specialization among regions. In addition, the construction of information infrastructure will further promote regional economic integration, accelerate the flow of factors, and increase enterprise cooperation. Active learning activities among enterprises, such as learning the advanced production technologies from other enterprises through technical personnel exchange, on-the-spot investigation, patent citation, etc.16,17, promote the improvement of production technologies and the optimization of factor input structure of enterprises, hence, to realize the transformation and upgrading of the overall industry.
Hypothesis 1: Construction of information infrastructure induces industrial structure upgrading.
Furthermore, in addition to direct effects, the Engel effect and the Baumol effect are driven by information infrastructure and are likely to have impacts on the transformation and upgrading of China's industrial structure. Among them, the Engel effect is derived from Engel's law, which emphasizes the impacts of product demand income elasticity in different industrial sectors. As the income elasticity of demand for agricultural products is lower than that of non-agricultural products, the increase in income will make the demand for non-agricultural products rise faster, which will drive the transfer of labor force to non-agricultural industries 18, thus accelerating the pace of urbanization 19,20. Although artificial intelligence brought about by the construction of information infrastructure may also replace labor10, information infrastructure promotes automated production and only replaces a part of labor. On the contrary, information infrastructure will increase the demand for specific labor that is difficult to be automated and requires strong information skills and eventually might not reduce the overall labor demand12,13,21,22. Acemoglu and Restrepo (2019) 22 estimated that the application of automation might make 75 million to 375 million people change their jobs. Therefore, the construction of information infrastructure may accelerate the process of urbanization. At the same time, the Engel effect is often introduced by setting consumers with hierarchic preferences, which are endogenous. Because urban cities have more consumer preferences and types of consumer goods compared to consumers in rural areas 23,24, this will greatly impact the transformation and the upgrading of industrial structure. Therefore, information infrastructure will drive industrial structure upgrading by promoting the process of urbanization.
Hypothesis 2: The construction of information infrastructure promotes industrial structure upgrading by accelerating urbanization.
The Baumol effect was put forward by Baumol (1967)25. It expounds that output growth is positively correlated with labor productivity growth and emphasizes that the difference in labor productivity in various industries will affect the relative prices of products. Suppose the products of different industrial sectors are complementary to each other. In that case, the product prices of industrial sectors with rapid technological progress are relatively low, which will promote the transfer of labor to these industrial sectors26, thus promoting the industrial structure upgrading. Technological innovation or progress has played an important role in industrial structure upgrading. However, information infrastructure is an important impetus for technological innovation because its construction has laid the foundation for the widespread application of IT technology. By building an intelligent network technology platform, the speed of super large-scale information transmission, the sharing of the latest R&D achievements, and the spillover of cutting-edge knowledge and technology have been greatly improved. Also, the cost of network search and information transmission has been reduced. At the same time, the dissemination and exchange of information and knowledge among different entities have been accelerated27,28. Hence, the marginal returns of technology have been increased through the spillovers of knowledge and technology, enhancing technological innovation’s compatibility and scalability. At the same time, the construction of information infrastructure can effectively break the time and space constraints of new information exchange, promote the transfer and flow of innovation elements and intellectual capital among regions and industries29, and enhance R&D cooperation and technical exchange among enterprises, which will help reduce the risk of innovation uncertainty caused by information asymmetry. Therefore, constructing information infrastructure will promote industrial structure upgrading by fostering scientific and technological innovation.
Hypothesis 3: The construction of information infrastructure promotes industrial structure upgrading by promoting scientific and technological innovation.
Urbanization and technological progress. The advantages of urbanization in specialization, diversity, human capital accumulation, information exchange network formation, transaction efficiency improvement, and public services make it conducive to the generation and diffusion of technological innovation. From the perspective of investment in capital and personnel, regional investments in innovation are mainly concentrated in urban areas, and the larger the urban size, the more obvious the advantages of innovation investment in urban areas. Therefore, both the increase in the number of urban cities and the expansion of the urban size will lead to the expansion of the innovation investment scale, which is conducive to the improvement of technological innovation ability. From the perspective of the environment affecting technological innovation, even though the urban and rural areas share the same systems, policies, and laws in the same region, the advantages of urban areas in specialization and diversity, accumulation of human capital, formation of information exchange network and improvement of transaction efficiency make technological innovation still easier to occur in urban areas.
Hypothesis 4: Urbanization promotes technological progress.
Meanwhile, urban areas are concentrated with a larger proportion of the population with different interests, abilities, needs, and wealth, meeting the needs of specialization; A variety of highly specialized enterprises come together to share specific labor markets, information, internal links, and other resources. Different people, enterprises, industries, etc. gathered in urban areas form a diverse environment, create opportunities for exchanges among people in different industries and disciplines, and promote the generation of new knowledge, technology, and industries. Education opportunities and educational infrastructure in urban areas are better than those in rural areas and more conducive to people's development of their skills, to promote the formation and accumulation of human capital. In big urban cities, innovation practitioners are spatially closer to each other, which is conducive to shortening the distance between each other to enhance mutual trust, reduce the cost of opportunism, and realize communication and cooperation. By gathering the population and industries together, forming stable cooperative relations, and reducing uncertainties, urban areas are conducive to the vertical decomposition of enterprises and promote professional development. The large-scale and well-informed markets in urban areas can develop a series of formal systems to reduce transaction costs, which is conducive to the improvement of transaction efficiency.
In addition, more developed information, communication, and other infrastructure in urban areas provide a good communication channel for innovation diffusion30. As arenas of economic activities of high density, urban areas are full of various advertisements, commodity exhibitions, promotional activities, and various academic and commercial conferences, which provide enterprises and individuals with low-cost or even free market and technical information. Moreover, the centralized enterprises and personnel in urban areas have more face-to-face communication opportunities compared to the scattered enterprises and personnel, which makes information spread more effectively. Therefore, urban areas are not only efficient producers of innovation but also provide a favorable environment for innovation diffusion, so that innovation can quickly spread from one person and enterprise to another.
Hypothesis 5: The construction of information infrastructure promotes industrial structure upgrading, by accelerating urbanization and technological progress.
To sum up, we have constructed a theoretical framework (see Fig. 1), which presents several paths for the information infrastructure to affect the upgrading of the industrial structure.