INNOVATION, WORKING CONDITIONS AND INDUSTRIAL RELATIONS.EVIDENCE FOR A LOCAL PRODUCTION SYSTEM
Davide Antonioli, Massimiliano Mazzanti, Paolo Pini.
University of Ferrara
Department of Economics, Institutions and Territory (DEIT)
Contact: [email protected]
1. Objectives
2. Literature
3. Dataset
4. Methodology and Results
5. Conclusions
Outline
Objectives
Main Objectives
• To highlight the relationships between innovation activities and working conditions
• To put in evidence the linkages between cooperative industrial relations and working conditions
2. Literature 1. Techno-organizational changes and working
conditions
Two main views • a. Positive
“Empowerment thesis”: both management and workers gain from the introduction of techno-organizational changes (see Handel, Levine 2004 and Vidal 2007 for a review)
2. Literature (continue)
b. Negative
“Intensification thesis”: the management uses techno-organizational changes to strengthen control over workers’ efforts and to intensify the pace of work (Green, McIntosh, 2001; Green, 2004; Askenazy, 2004; Fairris, 2004; Askenazy, Caroli, 2006)
2. Literature (continue)
2. Industrial Relations and working conditions
• The presence of cooperative relations between management and union delegates support the workers well being (see Eurofound, 2007 for a recent review)
Main Value Added
• Comprehensive perspective on the innovation phenomenon
• Availability of firm level industrial relations data and of firms’ balance sheets data
• Perceived measures of changes in working conditions provided by union representatives
3. Dataset • Manufacturing firms with at least 20 employees located in the
province of Reggio Emilia (Emilia Romagna)• Questionnaire was administered in 2005 and allowed us to
collect information over the year 2004.• The overall number of firms with RSU is 376 • The number of respondents is 192 (51% of the 376 firms with
RSU)• The 192 firms employ 31.600 workers • Balance sheets data: 156 out of 192 firms covered for 1998-
2003
3. Dataset (continue)Firms with RSU (percentage distribution) Size (n. employees)
Sectors 20-49 50-99 100-249 250-499 >499 TotalTotal
(numb.)
Food 1.86 1.33 1.59 0.27 0.54 5.59 21
Other Industries 1.33 0.53 0.00 0.00 0.27 2.13 8
Chemical 4.53 1.85 2.13 0.27 0.27 9.04 34
Wood 1.33 1.33 1.06 0.79 0.00 4.52 17
Machineries 23.94 16.50 11.43 3.73 2.12 57.71 217
Non-metallic mineral 3.45 5.32 4.25 2.12 1.85 17.02 64
Textile 1.33 1.33 0.26 1.07 0.00 3.99 15
Total 37.77 28.19 20.74 8.24 5.05 100.00 376
Total (numb.) 142 106 78 31 19 376
3. Dataset (continue)
Firms interviewed (percentage distribution) Size (n. employees)
Sectors 20-49 50-99 100-249 250-499 >499 TotalTotal
(numb.)
Food 2.08 2.08 2.60 0.52 0.52 7.81 15
Other Industries 1.56 0.52 0.00 0.00 0.52 2.60 5
Chemical 4.69 1.56 2.60 0.52 0.52 9.90 19
Wood 1.56 1.04 1.56 1.04 0.00 5.21 10
Machineries 16.67 13.54 12.50 4.17 3.13 50.00 96
Non-metallic mineral 4.17 5.21 4.69 3.13 2.08 19.27 37
Textile 1.56 1.56 0.52 1.56 0.00 5.21 10
Total 32.29 25.52 24.48 10.94 6.77 100.00 192
Total (numb.) 62 49 47 21 13 192
3. Dataset (continue)
Working Conditions Indexes
Contents
WC_1
(empowerment related items)
Index capturing the average trend of 8 job items on a scale from 1 to 3 (decreased, stable, increased)
Items: effort, security and job stability, employees competences,
information disposable to the employees, autonomy in accomplish the job tasks,
influence over the managerial decisions, monetary incentives, non-monetary incentives
WC_2
(intensification related items)
Index capturing the average trend of two job items on a scale from 1 to 3 (decreased, stable, increased)
Items: safety/security and stress
Dependent variables constructed on the basis of the following question: “In 2004, also subsequently to the introduction of changes by the management, how did the working conditions change?”
3. Dataset (continue)• Main firm characteristics/activities covered by the
questionnaire data and balance sheets dataStructural characteristics
Dummies: sector, size, firm typology, social responsibility, delocalization, strategy pursued.
Indexes: turnover on international markets, skill ratio, economic performance indicators
74% of firms export part of the production
Balance sheets data
1998-2004
Labour productivity, ROE
Organizational changes
INNO_ORG
Indexes: changes in labour (ORG_LAB) and production organization, individual and collective rewards (REW), in-/out-sourcing, inter-firm relations
20% of firms adopt HPWP
Technological innovation
INNO_TECH
Indexes: innovation input (R&D, R&D expenditure, firm collaborations), innovation output (product, process, incremental, radical, quality control innovations)
60% of firms invested its own resources in R&D; radical innovations 27%; incremental innovations 62%
Training
INNO_TRAIN
Indexes: training coverage, training modalities, specific competences to which training is addressed (informatics, economics and law, etc…), advantages from training
Weakness of small firms (20-49 employees): 72% no training
ICT INNO_ICT
Indexes: ICT adoption in communication, in production and in the management of activities and external relations
E.g. Material Requirements Planning 64% of firms; 82% web site; 75% intranet
Industrial relations
Dummies: presence of bilateral technical commissions (BTC), presence of second level bargaining
Indexes: Management/Union interaction on changes, firm issues, flexibilities; trend in firm level industrial relations (INDREL_TREND), evaluation of the firm level industrial relations (INDREL_EVAL), union density, BTC activity, intensity of firm level bargaining
Most diffused relation between management and union delegates: information
Less diffused : negotiation
Flexibility Indexes: coverage of contractual flexibility (LCF), conversion of flexible contracts in long-lasting ones; variation in flexibility types (temporal, functional, wage and organizational flexibilities) (FLEX_VAR)
Flexible contracts: 83% of firms; 11.5% workers involved
Conversion rate of flexible in long-lasting contracts in 2004: 50%
4. Methodology…
1. Innovation and Industrial Relations Working Conditions
Working Condition (WC_1 or WC_2) = β0i + β1i[structural variables] + β2i[innovation activities] + β3i[industrial relations] + β4i [flexibilities] + β5i[balance sheets variables] + εi
4. ……..and Results (continue)Dependent variable WC_1
1 2 3 4Structural variables
Yes Yes Yes YesSynthetic Innovation Indexes
INNO_ICT * ** *Organizational changes
ORG_LAB / *** / *Industrial Relations
INTERAC_ISSUES ** ** INDREL_TREND ** *** ** **
Flexibility LCF * (-)
FLEX_VAR *** *** ** **Economic Performance
PROD_QUEST * / /Adj R2 0.26 0.29 0.27 0.26
F test prob. 0 0 0 0N 191 191 156 156
Note: * 10%; ** 5%; *** 1% levels of significance
Dependent variable WC_2 1 2 3 4
Structural variablesYes Yes Yes Yes
Synthetic Innovation IndexesINNO_TRAIN ** ** INNO_TECH * *INNO_ORG ** (-) / ** (-) /
Organizational changes REW / ** (-) / ** (-)
Industrial Relations INDREL_EVAL *** *** *** **
INDREL_TREND ** ** * *Flexibility
FLEX_VAR *** *** * *Economic Performance
VA/EMP 2004 / / * *M_VA/EMP98-03 / / * (-)
Adj R2 0.26 0.26 0.25 0.25F test prob. 0 0 0 0
N 191 191 156 156
4. …….and Results (continue)
Dependent WC_1 WC_2
Influencing factors
Technological innovation Not significant Positive but weakly significant
Organizational innovation….
Not significant Negative and significant
….Changes in Labour Organization
Positive and significant Not significant
….Reward System Not significant Negative and significant
Training Not significant Positive and significant
ICT Positive and significant Not significant
Cooperative Industrial relations
Positive and significant Positive and significant
Summing up
Conclusions• Our empirical results support the hypothesis that
working conditions are an outcome of techno-organizational changes
• The results seem to be sensible to the choice of the working conditions index
• As a whole, working conditions are positively influenced by techno-organizational changes (empowerment view supported) and by cooperative industrial relations in the local production system of Reggio Emilia
Future agenda• Extending the analysis to ‘many’ local production
systems or over wider geographical areas (e.g. regions)
• Extending the empirical analysis in order to verify the existence of complementarities/synergies among innovation activities and industrial relations
Thank you for your attention !
