Presentation by Andreas Crimmann during the Labour Market Obervatory Hearing on "Innovative workplaces as a source of productivity and quality jobs" of 15.12.2010 in the European Economic and Social Committee

1. The impact of sustainability on innovations
and firm‘s performance
European Economic and Social Committee
Labour Market Observatory
Hearing on Andreas Crimmann
"Innovative workplaces as a source of
productivity and quality jobs"
Brussels, December 15, 2010

2. Agenda
1. The MINO-Project
2. Determinants of Innovations
3. Impacts of Innovations
4. Conclusion
2

3. Agenda
1. The MINO-Project
2. Determinants of Innovations
3. Impacts of Innovations
4. Conclusion
3

4. Organisational model
Environment: Innovation capability Innovation
markets,
technologies,
institutions
Flexibility/Stability
Working and employment conditions
Employees
4

5. Agenda
1. The MINO-Project
2. Determinants of Innovations
3. Impacts of Innovations
4. Conclusion
5

6. Determinants of Innovations
 Hypothesis: higher innovation capability is (i.a.) a function of
working and employment conditions
 Model: Probit estimation of determinants of product and process
innovations 2002/03 and 2005/06
 Data: Representative survey data for Germany of the IAB
Establishment Panel
 References: Crimmann/Evers: Determinants of Innovations: The
impacts of working and employment conditions, WISO – special
edition, Linz (to be released in 2011)
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7. Good working and employment conditions
 Indicators
 Equal opportunity measures
 Measures for older workers
 Firm providing (apprenticeship) training
 Firm supports or offers further vocational training
 Wage above the collectively agreed scale
 Profit sharing
 Works council
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8. Share of Innovatory Establishments in 2007
Establishments without...
Establishments with...
Equal opportunity measures 43 67
Measures for older workers 42 63
Training 35 52
Wage above the collectively agreed scale 45 48
Works or staff council 44 59
Source: IAB-Establishment Panel 2008
Quelle: IAB-Betriebspanel 2008
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9. Determinants of Innovations
Model I Model II Model III
Product Product Process
innovations innovations innovations
2002/2003 2005/2006 2005/2006
Characteristics of establishments
R&D in the establishment (1=yes) 0.2977*** 0.2387*** 0.1503***
Innovations intended, but not carried out (1=yes) 0.2337*** 0.3285*** 0.3288***
Investments in information and communication technology (1=yes) 0.0509* 0.0209 0.0525**
Investments in production facilities, office equipment (1=yes) 0.0578** 0.0498** 0.0424**
Branch establishment (1=yes) 0.1040*** -0.0188 0.0091
West Germany (1=yes) 0.0145 -0.0273 0.0421
Share of highly skilled employees 0.0243 0.1234* -0.0121
Share of part-time employees -0.1333** -0.0584 0.0257
Indicators of sustainability
Equal opportunity measures (1=yes) 0.0261 0.0899*** 0.1076***
Measures for older workers (1=yes) -0.0043 0.1123*** 0.0499**
Apprenticeship training (1=yes) 0.1251*** 0.0899*** 0.0243
Firm providing further vocational training (1=yes) 0.0509* 0.0597*** 0.0375*
Wage above the collectively agreed scale (1=yes) 0.0382 0.0669*** 0.0411**
Profit sharing (1=yes) 0.0777*** 0.0606** 0.0496**
Works or staff council (1=yes) 0.0003 -0.0324 0.0032
Control Variables
Firm size (number of employees) *** *** ***
Principal shareholder *** *** ***
Industrial sectors *** *** ***
Likelihood-Ratio-Test (χ2) 638.57*** 640.55*** 623.61***
Pseudo-R2 0.23 0.22 0.20
Number of Cases 2663 3018 3016
*/**/*** shows significance on the 10/5/1 %-level. Marginal effects with heteroscedastticty-robust standard errors.
Source: IAB Establishment panel 2001-2007 9

10. Agenda
1. The MINO-Project
2. Determinants of Innovations
3. Impacts of Innovations
4. Conclusion
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11. Impacts of Innovations
 Hypothesis: (product) innovations increase firm
performance
 Method: Propensity-Score-Matching
 Estimation of the propensity score:
Determinants of innovations in 2002/03 (Treatment)
 NN-Matching: Comparison of firm performance of „statistical
twins“
 Data: IAB-Establishment Panel 2001-2009
11

12. Dependent Variables (Matching)
 Annual average growth rates of performance indicators:
(2004 – 2008 compared with status in 2001)
 of overall employment
 of revenues
 of labour productivity (added value per employee)
 Change in (subjective) profit situation
(0=insufficient to 4=very good)
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13. The Effect of Product Innovations in 2002/03 on…
Source: IAB-Establishment Panel 2001-2009
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14. The Effect of Radical Innovations in 2002/03 on…
Source: IAB-Establishment Panel 2001-2009
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15. Agenda
1. The MINO-Project
2. Determinants of Innovations
3. Impacts of Innovations
4. Conclusion
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16. Conclusions
 Empirical Evidence
1. Attractive working and employment conditions go along with
a higher probability of innovations
2. Subsequently, such innovations significantly increase firm‘s
performance
 Lessons learned
1. Equal opportunities for all groups of employees enhance
innovation capability
2. Investments in proper working and employment conditions are
sustainable and efficient for firms
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17. Discussion
Andreas Crimmann
Institute for Employment Research
Regensburgerstrasse 104
90748 Nuremberg
Germany
andreas.crimmann@iab.de

18. Back-Up
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19. The IAB Establishment Panel: Responding Establishments
15857 15689 15821
15537 15408 15449 15644 15456 15523
16000
13931
14000
5303 5767 5585 5718
Ostdeutschland 5688 5593 6014 5998
6095
12000 Westdeutschland
9762 5515
9194
10000 8850
8342
8000
5335
4905
4748
4313
6000
9849 10105 10090 10104 10103 9856 9630 9361 9525
8416
4000
4265 4138 4096 4029 4102 4289 4427
2000
0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: IAB-Establishment Panel 1993-2009
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20. Innovations in the IAB Establishment Panel
 Radical innovations: Have you started to offer a completely new
product or service within the last two years for which a new
market had to be created?
 Incremental innovations: Has your enterprise improved or
further developed a product that has been part of its line for
longer than two years in total?
 Product imitations: Has your company, in the last two years,
started to offer a product/service that had been on the market
before?
 Process innovations: Did you develop or implement procedures
which have noticeably improved production processes or
services during the last two years?
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21. Impacts of Innovations
 How do innovations affect the firm performance?
 Crimmann, Evers, Günther, Guhr, Sunder (2010): Betriebliche Entwicklung von Innovatoren im
Vergleich zu Nicht-Innovatoren im Verarbeitenden Gewerbe, in: Wirtschaft im Wandel (10/2010)
 Impact of market innovations in manufacturing sector
 Positive effects on employment- and turnovertrend
 No significant effects on productivity development and
subjective profit situation
 3 to 5 years after innovation the performance difference
(employment, revenues) in East-Germany between innovators
and Non-Innovators is higher compared to West-Germany
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