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Technology Use, Organisational Flexibility and Innovation: Evidence for Germany

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  • Hempell, Thomas
  • Zwick, Thomas

Abstract

This paper investigates to what extent the usage of information and communication technology (ICT) fosters innovation activities by facilitating more flexible organisational structures in firms. We distinguish between functional flexibility (the ability of workers to co-operate and take decentralised decisions) and numerical flexibility (the reduction of fixed costs, mainly due to outsourcing business processes). Our results from a large and representative data set of firms in Germany show that ICT use is associated with an increase in both types of flexibility but the implications for innovation activities differ. Functional flexibility is strongly positively associated with product innovations. In contrast, numerical flexibility allows firms to ?buy? innovations in the short run, but reduces innovative capacity in the longer run.

Suggested Citation

  • Hempell, Thomas & Zwick, Thomas, 2005. "Technology Use, Organisational Flexibility and Innovation: Evidence for Germany," ZEW Discussion Papers 05-57, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:4541
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    Cited by:

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    3. Alex Bryson, 2013. "Do temporary agency workers affect workplace performance?," Journal of Productivity Analysis, Springer, vol. 39(2), pages 131-138, April.

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    More about this item

    Keywords

    ICT usage; flexibility; innovations;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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