Labour Market Rigidity And Firms' R&D Strategies
AbstractIn The traditional explanations of Italian industry’s low commitment to R&D activities mainly rest on the firms’ size and relative specialisation of the national economy. We argue that they are not sufficient to justify the Italian anomaly; instead, in our opinion, it above all depends on the well-known rigidity of the Italian labour market. To show this, we first take into account the variability of innovation patterns through the economic system by adopting Pavitt’s taxonomy as our analytical instrument. We then demonstrate that the main factor underlying Italian industry’s management strategies in research is that supplier-dominated and scale-intensive industries in Italy are desperately superficial in their commitment to R&D as a source of innovation. This situation, as unusual as it appears at first sight, has been so far economically viable, because in the supplier-dominated and scale-intensive categories, and within the limits of technology, research and investment in machinery are interchangeable to some extent as means of innovation. Our results seem to suggest that a substitution effect between spending on R&D and investment in machinery indeed is working in Italy in these two sectors. The fact that the low R&D commitment continues at all stages of the economic cycle suggests that the Italian phenomenon may be the result of a constant tendency among companies to counter the rigidity inherent in the deployment of labour as a factor of production. This rigidity is a circumstance very frequently accounted for in the explanation of the higher economic growth in the US with respect to European countries. The novel and major finding of our study is that the rigidity of the labour market - besides being classifiable in economic models as a generic cause of the slower growth in a European country - emerges as a specific cause in models based on innovation theory, via firms’ lower commitment to R&D.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Institute for Economic Research on Firms and Growth - Moncalieri (TO) in its series CERIS Working Paper with number 200404.
Length: 19 pages
Date of creation: Jun 2004
Date of revision:
Technological Innovation; Industrial Research; Industrial Policy; Market Labour;
Find related papers by JEL classification:
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dosi, Giovanni, 1982.
"Technological paradigms and technological trajectories : A suggested interpretation of the determinants and directions of technical change,"
Elsevier, vol. 11(3), pages 147-162, June.
- Dosi, Giovanni, 1993. "Technological paradigms and technological trajectories : A suggested interpretation of the determinants and directions of technical change," Research Policy, Elsevier, vol. 22(2), pages 102-103, April.
- Pavitt, Keith, 1984. "Sectoral patterns of technical change: Towards a taxonomy and a theory," Research Policy, Elsevier, vol. 13(6), pages 343-373, December.
- Kamien,Morton I. & Schwartz,Nancy L., 1982. "Market Structure and Innovation," Cambridge Books, Cambridge University Press, number 9780521293853, April.
- Scherer, F M, 1992. "Schumpeter and Plausible Capitalism," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1416-33, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Enrico Viarisio) or (Anna Perin) or (Giancarlo Birello).
If references are entirely missing, you can add them using this form.