New Technologies, Organisation and Age: Firm‐Level Evidence

Abstract

We investigate the relationships between new technologies, innovative workplace practices and the age structure of the workforce in a sample of French firms. We find evidence that the wagebill share of older workers is lower in innovative firms and that the opposite holds for younger workers. This age bias affects both men and women. It is also evidenced within occupational groups. More detailed analysis of employment inflows and outflows shows that new technologies essentially affect older workers through reduced hiring opportunities. In contrast, organisational innovations mainly affect their probability of exit, which decreases much less than for younger workers following reorganisation.In response to increasing national and international competition, many American and European firms have invested in information technologies (IT) over the past three decades. Along with the introduction of computer systems and network technologies, most firms have reorganised their workplace in order to introduce more flexible organisational devices. These include self-managed teams, multitasking, just-in-time production and delivery, total-quality management and some decentralisation of decision making. They are often referred to as Ôhigh performanceÕ workplace practices.One important question regarding technological and organisational innovations has to do with their labour-market consequences: do they affect the structure of employment and, as a consequence, do they hurt the employment prospects of particular types of workers? Evidence in the literature suggests that both technological and organisational innovations are biased against unskilled labour. As regards technological change, there is a general agreement that the development of IT has reduced the employment opportunities of less skilled workers; see Chennells and Van Reenen (2002) for a review. The literature on organisational change is more recent, but several works suggest that innovative workplace practices have also been detrimental to lower skilled employment in various countries; see Caroli and Van Reenen (2001) and Bresnahan et al. (2002).One related issue we tackle here is: are new technologies and workplace practices biased against age? In other words, do they hurt the employment prospects of older workers, relative to younger ones? This question is of particular relevance in Europe given that the population is ageing fast and that the employment rate of older workers is particularly low: no more than 40% of the population aged above 55 is employed in Europe, as compared to 58% in the US and 62% in Japan. From * We are indebted to Andrea Bassanini, Sandra Black, Lex Borghans, Bruno Crépon, Annie Jolivet, Richard Murnane, Sébastien Roux, Bas ter Weel, John Van Reenen and an anonymous referee for most valuable suggestions. We also thank participants to the INSEE Division ÔMarchés et Stratégies d'EntreprisesÕ, DEEE and ÔRechercheÕ seminars, to the MERIT Workshop on ÔInformation Technology and New Industry and Labour Market DynamicsÕ, to the 2004 EALE conferenc...

The moderator effect of training in the adoption of ICT in microenterprises

“…However, age has a negative influence (probably because age is negatively correlated with the ease of use), as show several research (Warr 1993;Ford et al 1996;Palvia and Palvia 1999;Chapman et al 2000;Borghans and Weel 2002;Rouvinen 2002;Aubert et al 2006;De Koning and Gelderblom 2006;Schleife 2006;Shih-Yung and Pearson 2011) due to the loss of cognitive technological skills and the increase of the resistance to change. Control variables are not relevant in the context of this analysis.…”

“…In line with this idea, some research have studied certain relationships between the age of the owner (Shih-Yung and Pearson 2011) and the age of the company (Goode and Stevens 2000;Sorensen and Stuart 2000;Chatterjee et al 2002, Balasubramanian andLee 2008) and the use of ICT. From these studies a negative relationship between the age of the entrepreneur is found (Aubert et al 2006;Shih-Yung and Pearson 2011) and the use of ICT and, conversely, a positive relationship between their experience in the market and its use (Franz and Robey 1986;Sorensen and Stuart 2000;Burke et al 2002;Westhead et al 2005;Papastathopoulos and Beneki 2010). Finally, another factor influencing positively the use of ICT is, as noted above, training (Fulantelli and Allegra 2003;Admiraal and Lockhorst 2009;Lee Sang et al 2010).…”

“…Moreover, the willingness and ability of older workers may impede technological change and innovation. Older workers show more resistance to change and adaptability to new technologies (Aubert et al 2006), so it follows greater adaptability to technological changes occur companies with younger staff. Therefore, and as discussed above, the SBTC and TAM suggest that simultaneity in the adoption of technological and organizational innovations has a significant impact on company performance.…”

“…Moreover, increasing age affects the behavior of individuals when competing and cooperating, and consequently the process of adoption and use of ICT (Shih-Yung and Pearson 2011). In this sense, they can perceive a negative relationship between innovative attitude and intention of use of ICT due to the loss of technological skills and the lack of adaptation to change, and the age of the entrepreneur (Aubert et al 2006).…”

Age, Technology and Labour Costs

“…Crépon and Aubert (2004) estimated average earnings relations for France and found evidence of declining productivity after the age of 55, but they found that the age-productivity profile (as captured by such earnings functions) does not differ much across industries. In contrast, Aubert, Caroli and Roger (2004) estimated labor demand curves by using wage bill shares conditioned on value added as well as old and new economy capital; they did find significant evidence that innovative firms and work-practices present lower wage bill shares. The same result seemingly applies within occupational groups for other countries.…”