Schadet die Flexibilisierung des Arbeitsmarktes der Innovation?

Alfred Kleinknecht, C.W.M. Naastepad, Servaas Storm and Robert Vergeer

WSI-Mitteilungen, 2013, vol. 66, issue 4, 229-238

Abstract: Deregulation of labour markets and modest wage increases lead to significantly lower rates of labour productivity growth. In this paper theoretical arguments of why ‘rigid’ European labour markets can be useful for innovation are discussed. The arguments are supported by empirical evidence. The argument that high levels of labour turnover are damaging to innovation and learning may be particularly relevant to firms that operate under a Schumpeter II (‘routinized’) innovation model. Such firms are dependent on the historical accumulation of knowledge, much of that knowledge being person-specific and ‘tacit’ (i.e. ill-documented). Longer job durations are therefore favourable to innovation. Garage business enterprises (Schumpeter model I’) – as are found in Silicon Valley, however, instead use generally available knowledge and therefore have less problems with a higher rate of labour turnover. In conclusion, whether a flexible ‘hire & fire’ labour market is damaging to innovation also depends on the dominant innovation model in that sector. Finally, it is interesting to note that typical Anglo-Saxon countries do not seem to differ from typical ‘Rhineland’ countries (‘Old Europe’) in their long-run growth of GDP. It is also questionable whether the more flexible labour markets in Anglo-Saxon countries indeed result in lower unemployment.

Date: 2013
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DOI: 10.5771/0342-300X-2013-4-229

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