Anastácia Rodrigues Patrick Montgomery INNOVATION & KNOWLEDGE MANAGEMENT Topic: Dynamics of...

Anastácia RodriguesAnastácia RodriguesPatrick MontgomeryPatrick Montgomery

INNOVATION & KNOWLEDGE MANAGEMENT

Topic: Dynamics of Technological Change and Innovation

Broadening the Analysis of Innovation Systems – Competition, Organisational

Change and Employment Dynamics in the Danish System

(Lundvall & Christensen 2003)

INNOVATION & KNOWLEDGE MANAGEMENT

Topic: Dynamics of Technological Change and Innovation

Broadening the Analysis of Innovation Systems – Competition, Organisational

Change and Employment Dynamics in the Danish System

(Lundvall & Christensen 2003)


Systems of InnovationSystems of Innovation

Traditionally focused on

R&D System

Production System

Traditionally focused on

R&D System

Production System

Friedrich ListNational System of Political Economy - 1841•Invest heavily in education•Develop stable government institutions and laws to maximize individual freedom

This paper looks at

National (Danish) Production & Human Resource Development System


Characteristics of the Danish Innovation SystemCharacteristics of the Danish Innovation System

Denmark has the most equal income distribution in the world

Danish GDP per capita is high

Specialised in low and low medium technology

Use of human resources is biased towards public sector

Danish education system fosters independent and responsible workers with weak formal competencies

Danish labour market gives weak incentives to firms for investing in training their own personnel

Danish labour market is flexible and efficient but is also characterised polarisation to the disadvantage of unskilled and foreign workers in terms of job opportunities


What is the connection between:

Intensified Competition in Product Markets

X

Changes in Labour Markets


TRANSFORMATION PRESSURE

Fundamental factors affecting transformation pressure

• Technical Change• Competition Regime• Governance Regime• Macroeconomic Stance

Firm reaction to transformation pressure

• Firing some of the personnel• Functional Flexibility• Process Innovation• Product & Service Innovation• Industrial Networking

Transformation Pressure

Innovation and adaptation at the level of the firm

EconomicStructure


Results from DISKO surveyResults from DISKO survey Technical and organizational change in firms that reported

increased or unchanged competitive pressure during the years 1993-95

Technical and organizational change in firms that reported increased or unchanged competitive pressure during the years 1993-95


Impact on EmploymentImpact on Employment

FlexibleFirms

Innovative Firms

Firms that were exposed to strong competition resulted in a major impact on employment

Firms that were exposed to strong competition resulted in a major impact on employment

Job Creation?

Increased competition on average will tend to have a negative effect on the growth of employment in the short run.

Efforts to promote innovation in firms as well as in public policy need to have a certain time horizon.

Increased competition on average will tend to have a negative effect on the growth of employment in the short run.

Efforts to promote innovation in firms as well as in public policy need to have a certain time horizon.


Implications for PolicyImplications for Policy Good policy mix seems to be one that promotes the diffusion of

new organisational practises and enhances technological opportunities while also ensuring a suitable competitive pressure for the private sector

Good policy mix seems to be one that promotes the diffusion of new organisational practises and enhances technological opportunities while also ensuring a suitable competitive pressure for the private sector

Relationships between competition, innovation and functional flexibility.

Competition

FunctionalFlexibility

Innovation


Share of firms that answer ‘greater’ to the question ‘Has the firm altered its demands for qualifications in connection with hiring 1993-95?’ by change in competitive pressure.

Changes in the Content of WorkChanges in the Content of Work


Employment of workers without vocational training

Employment of workers without vocational training

Report defines 2 types of firms: static and dynamic Report defines 2 types of firms: static and dynamic

Employment of workers without vocational training in dynamic and static firms 1992-97

Nov.92 Nov.94 Nov.96 Nov.97

Strongly increased competition

Dynamic firms 16.500= 100 100.3 96.9 102.1

Static firms 4.218=100 92.3 81.9 75.0

Somewhat increased or milder competition

Dynamic firms 11.262=100 101.5 98.5 102.0

Static firms 5.862=100 99.3 97.0 93.5

Source: IDA data combined with DISKO survey


Policy ImplicationsPolicy Implications

Difficult to change important characteristics in the innovation and production system without radical reform of the human resource development system.

Danish case requires special attention to invest in learning capacity of those without vocational training.

Need to focus European Policy on stimulating organizational change in European firms.

Danish case is alternative to US benchmark for Europe’s entrance into ‘the new economy’.

Difficult to change important characteristics in the innovation and production system without radical reform of the human resource development system.

Danish case requires special attention to invest in learning capacity of those without vocational training.

Need to focus European Policy on stimulating organizational change in European firms.

Danish case is alternative to US benchmark for Europe’s entrance into ‘the new economy’.

Anastácia Rodrigues Patrick Montgomery INNOVATION & KNOWLEDGE MANAGEMENT Topic: Dynamics of...

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