Non-standard work and innovation: evidence from European industries

Abstract

Following a market-oriented approach, policies aimed at increasing labour flexibility by weakening employment protection institutions should enable firms to efficiently allocate resources, improve their capability to compete on international markets and adjust to economic cycle. This work documents the rise of non-standard (i.e. temporary and part-time) work in five European countries (Germany, France, Italy, the Netherlands and the United Kingdom) over the period 1994-2016 and investigate the nexus between the use of non-standard work and innovation performance using data for 18 manufacturing and 23 service industries. Contrary to the objectives that market-oriented policy recommendations promised to achieve, we show that there is a significantly negative association between the share of workers employed under nonstandard contractual arrangements and the introduction of both product and process innovation. Furthermore, we show that the harmful consequences of the spread of non-standard work on firms' product innovation propensity are more pronounced in high-tech sectors.

Labour market policies for inclusiveness

“…Similarly, workers with temporary jobs may end up in low-quality job traps. The accumulated research evidence shows that the expansion in the number of non-standard workers, a side effect of the much advocated structural reforms in Europe, negatively affected the organizational learning processes and accumulation of competencies required for successful innovations (Reljic et al 2021). This, in turn, lead to lower productivity growth (Kleinknecht 2020).…”

Vanishing social classes? Facts and figures of the Italian labour market

“…This series of reforms, which were supposed to foster employment growth, did not produce the expected effect (Fana et al 2016) but instead weakened the innovative capabilities of Italian firms (Cetrulo et al 2019;Reljic et al 2021). Moreover, they successfully resulted into an evident contraction in the number of worked weeks, contrasted however by an increasing number of jobs, as shown in Fig.…”

Flexible Work: Opportunity and Challenge (FLOC) for individual, social and economic sustainability. Protocol for a prospective cohort study of non-standard employment and flexible work arrangements in Sweden

“… 10 Both issues are matters of current debates. 9 10 Literature addressing effects of hiring NSW on the economic performance of an organisation is sparse, although low as well as high proportions of NSE might be negatively associated with financial performance. 11 …”

“…Results regarding organisational effects of NSE and FWA are rare and mixed. Some evidence suggests that industries with a large extent of NSE have a weaker product innovation propensity9 and that NSE is associated with either higher or lower wage costs 10. Both issues are matters of current debates 9 10.…”

“…Some evidence suggests that industries with a large extent of NSE have a weaker product innovation propensity9 and that NSE is associated with either higher or lower wage costs 10. Both issues are matters of current debates 9 10. Literature addressing effects of hiring NSW on the economic performance of an organisation is sparse, although low as well as high proportions of NSE might be negatively associated with financial performance 11…”