The impact of sustainability on innovations and firm‘s performance
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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 ...

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

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The impact of sustainability on innovations and firm‘s performance Presentation Transcript

  • 1. The impact of sustainability on innovationsand firm‘s performanceEuropean Economic and Social CommitteeLabour Market ObservatoryHearing on Andreas Crimmann"Innovative workplaces as a source ofproductivity and quality jobs"Brussels, December 15, 2010
  • 2. Agenda1. The MINO-Project2. Determinants of Innovations3. Impacts of Innovations4. Conclusion 2
  • 3. Agenda1. The MINO-Project2. Determinants of Innovations3. Impacts of Innovations4. Conclusion 3
  • 4. Organisational modelEnvironment: Innovation capability Innovation markets,technologies, institutions Flexibility/Stability Working and employment conditions Employees 4
  • 5. Agenda1. The MINO-Project2. Determinants of Innovations3. Impacts of Innovations4. 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) 6
  • 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 7
  • 8. Share of Innovatory Establishments in 2007 Establishments without... Establishments with... Equal opportunity measures 43 67 Measures for older workers 42 63 Training 35 52Wage above the collectively agreed scale 45 48 Works or staff council 44 59 Source: IAB-Establishment Panel 2008 Quelle: IAB-Betriebspanel 2008 8
  • 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. Agenda1. The MINO-Project2. Determinants of Innovations3. Impacts of Innovations4. Conclusion 10
  • 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) 12
  • 13. The Effect of Product Innovations in 2002/03 on…Source: IAB-Establishment Panel 2001-2009 13
  • 14. The Effect of Radical Innovations in 2002/03 on…Source: IAB-Establishment Panel 2001-2009 14
  • 15. Agenda1. The MINO-Project2. Determinants of Innovations3. Impacts of Innovations4. Conclusion 15
  • 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 16
  • 17. DiscussionAndreas CrimmannInstitute for Employment ResearchRegensburgerstrasse 10490748 NurembergGermanyandreas.crimmann@iab.de
  • 18. Back-Up 18
  • 19. The IAB Establishment Panel: Responding Establishments 15857 15689 15821 15537 15408 15449 15644 15456 1552316000 1393114000 5303 5767 5585 5718 Ostdeutschland 5688 5593 6014 5998 609512000 Westdeutschland 9762 5515 919410000 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 19
  • 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? 20
  • 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 21