The crucial role of innovation strategies in work organization and employment.

The numerous empirical investigations into the effects on employment of organisational innovation have non-uniform, even contradictory results. There is obviously no simple cause-effect relation. However, it seems to be clear that without strong attempts to activate liberated human resources, their creative and productive potential, for expansionist business strategies and for the development of new products and markets, there will be no positive effects on employment. Therefore, a balance of innovation is needed where an increase in productivity

is combined with the creation of new products and services. This leads us to the basic distinction

between the low and the high road to innovation which will be elaborated in some detail in this


 This paper is part of the Final Report on the project “A Medium Term Plan for Collaborative Action at the European Level”  . This project has been financed by the DG V of the European Commission and has been carried out by the European Work&Technology Consortium .


The relationship between new forms of work organisation, productivity, innovation and employment seems to have become increasingly recognised in the European Union since the 90s.

For example, in 1994 the European Council meeting in Essen linked the intensity of growth in employment to a more flexible form of work organisation satisfying both the wishes of employees and the requirements of competition.

In a number of publications, the Commission stressed the rising importance of organisational change for productivity and employment growth: The Green Paper on Innovation identifies our weaknesses in combining technological and organisational innovation. And the Green Paper on the Information Society indicates that the very flexibility of new technologies can be realised only if they are appropriately embedded in the social organisation of the work processes. And, according to the findings of the Competitiveness Advisory Group chaired by Mr. Ciampi., this includes better job protection and job enrichment.

The objective of linking work organisation, innovation and employment defines a European approach to competitiveness. Accordingly, the Green Paper of the Commission "Partnership For a New Organisation of Work" refers to improving employment and competitiveness through better organisation of work. While the document explicitly says that an improved organisation of work will not in itself solve the unemployment problem, it can, however, make a valuable contribution to the competitiveness of European firms, to the quality of working life and the employability of the workforce.

In general, we strongly support the Green Paper aimed at stimulating a European debate in the search for a new form of work organisation and its inherent policy challenges, including a new partnership. We do not cover all the areas in this ongoing debate, our contribution focuses on the relationship between new forms of work organisation and a new balance of innovation strategies. It will be demonstrated that this approach refers back to a European tradition of social partnership influencing the emerging patterns of work organisation. They have, however, to be deepened and broadened in a model of collective learning which is to be supported by publicpolicies.

We try to discuss here crucial employment issues relating to innovation strategies which are linked to the new forms of work organisation. There is empirical evidence that the quality and impact of organisational change depends on different trajectories of innovation with contradictory employment effects. While purely cost-cutting and flexibility enhancing innovation strategies decrease the demand for labour, it can be increased by creating new products, exploring new businesses and developing new markets. Therefore, we differentiate between a low and a high road to innovation which are built on different forms of work organisation.

The core elements of the high road create the organisational slack and activate the human resources necessary for a balance of process and product innovations. They are linked with a social infrastructure of innovation which progressively includes social partnerships especially between the trade unions and the employers' associations, but also intermediary agencies and policy initiatives fostering a broad range of private and public agreements supporting the high road to innovation.