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Global hr forum2007-luc_soete-21st century challenges to national hr strategies
 

Global hr forum2007-luc_soete-21st century challenges to national hr strategies

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    Global hr forum2007-luc_soete-21st century challenges to national hr strategies Global hr forum2007-luc_soete-21st century challenges to national hr strategies Presentation Transcript

    • 21st Century challenges to national HR strategies Luc Soete UNU-MERIT, University of Maastricht The Netherlands lobal HR Forum 2007 “HR Solutions for the Next Generation”, October 23rd-25th, 2007
    • Outline Alternative HR models between firms and countries: underlying reasons Convergence between the two models of learning because of globalisation, lessons from Europe Future challenges
    • 1. Human Resources and the KE Back to Schumpeter Useful to start from the old Schumpeterian distinction between Schumpeter model I en Schumpeter model II innovation. Schumpeter I model: “Entrepreneurial model”: innovation as the basis of new firm foundation (ICT, biotechnology); individual inventor-entrepreneur, science based firms, blue angel/venture capital, exit framework (functioning stock market, failure tolerance). Schumpeter II model: “Incremental innovation model”: stepwise innovations based on continuous accumulation of (tacit) knowledge; role of learning; internal human resource investments; professionalized R&D labs in large firms. These two models represent two different models of learning and HR management within firms and societies.
    • Dominance of two models in way firms operate visible at country aggregate level Schumpeter I model: Schumpeter II model: USA Germany Canada France Australia Benelux Ireland Scandinavian countries Great Britain Austria China Japan Korea?
    • With major underlying labor market and HR differences Anglo-Saxon model: Rhineland (Japan) model: Easy hiring and firing Protection against firing Shorter contracts Longer stay with same firm Modest unemployment More generous benefits unemployment benefits Weak trade unions Strong trade unions Labor relations are more Labor relations are more ‘co- ‘conflictuous’ operative’ Wage bargaining de- Wage bargaining co- centralized ordinated and centralized
    • Reflected in real wages differences (1960 = 100) Figure I-1: Development of real wages: Anglo-Saxon versus Continental-European countries (1960-2004) 400 Real wage (1960=100) 300 200 100 1960 1965 1970 1975 1980 1985 1990 1995 2000 2004 Cont.-European Anglo-Saxon Anglo-Saxon countries: Australia, Canada, New Zealand, UK and USA; Cont.-European countries: Austria, Belgium, Denmark, Finland, France, Germany, Italy, Netherlands, Portugal, Spain, Sweden; Source: Database of the Groningen Growth and Development Centre (http://www.ggdc.net/).
    • Not in terms of real GDP growth (1960 = 100) Figure I-3: Development of real GDP: Anglo-Saxon versus Continental-European countries (1960-2004) 400 Real GDP (1960=100) 300 200 100 1960 1965 1970 1975 1980 1985 1990 1995 2000 2004 Cont.-European Anglo-Saxon Anglo-Saxon countries: Australia, Canada, New Zealand, UK and USA; Cont.-European countries: Austria, Belgium, Denmark, Finland, France, Germany, Italy, Netherlands, Portugal, Spain, Sweden; Source: Database of the Groningen Growth and Development Centre (http://www.ggdc.net/).
    • Strongly in labour productivity (value added per hour worked) (1960 = 100) Figure I-4: Development of labour productivity: Anglo-Saxon versus Continental-European countries (1960-2004) 400 Labour productivity (1960=100) 300 200 100 1960 1965 1970 1975 1980 1985 1990 1995 2000 2004 Cont.-European Anglo-Saxon Anglo-Saxon countries: Australia, Canada, New Zealand, UK and USA; Cont.-European countries: Austria, Belgium, Denmark, Finland, France, Germany, Italy, Netherlands, Portugal, Spain, Sweden; Source: Database of the Groningen Growth and Development Centre (http://www.ggdc.net/).
    • In labour input (working hours) (1960 = 100) Figure I-2: Development of total hours worked: Anglo-Saxon versus Continental-European countries (1960-2004) 200 Total hours worked (1960=100) 180 160 140 120 100 1960 1965 1970 1975 1980 1985 1990 1995 2000 2004 Cont.-European Anglo-Saxon Anglo-Saxon countries: Australia, Canada, New Zealand, UK and USA; Cont.-European countries: Austria, Belgium, Denmark, Finland, France, Germany, Italy, Netherlands, Portugal, Spain, Sweden; Source: Database of the Groningen Growth and Development Centre (http://www.ggdc.net/).
    • And in capital intensity of production (capital/output) (1960 = 100)
    • GDP growth, labour productivity growth and labour intensity of GDP growth. Anglo-Saxon versus Continental European countries Average annual GDP Average annual GDP Growth of labour growth growth per hour hours per 1% GDP worked growth Cont. Anglo- Cont. Anglo- Cont. Anglo- European Saxon European Saxon European Saxon 1950-60 5.5 3.3 4.2 3.6 0.23 - 0.09 1960-73 5.1 4.1 5.2 2.7 - 0.03 0.34 1973-80 2.7 2.4 3.0 1.1 - 0.14 0.55 1981-90 2.6 3.2 2.4 1.4 0.07 0.55 1990-00 2.4 3.1 1.9 1.9 0.21 0.40 2000-04 1.3 2.5 1.1 1.6 0.15 0.35 Anglo-Saxon countries: Australia, Canada, New Zealand, US and UK. Cont.-European countries: Austria, Belgium, Denmark, Finland, France, Germany, Italy, Netherlands, Portugal, Spain, Sweden Source: Groningen Growth and Development Centre (http://www.ggdc.net/); non-weighted averages across countries.
    • Underlying reasons for lower labour productivity growth Negative effects of flexibilization of the labour market (shorter job duration): Less loyalty and commitment (firm secrets and technological knowledge can more easily leak to competitors) Historical memory of the ‘learning organization’ suffers from frequent changes in personnel Manpower training is less attractive (short pay-back period) Strong growth of management functions for control and monitoring due to loss of trust and loyalty (frustrating for creative people) De-centralized wage formation: workers may appropriate part of the monopoly profits from innovation Continuous accumulation of incremental knowledge in a Schumpeter II innovation model is suffering from frequent changes of personnel
    • Share of managers in working population (19 OECD countries, 1984-1997) Norway Spain Greece Sweden Italy Switzerland Belgium Ireland Germany Portugal Japan Denmark Finland Austria Netherlands U.K. Australia USA Canada 0 5 10 15 Managers as a percentage of the non-agrarian working population
    • 2. Two forms of HR learning: lessons from Europe The Schumpeter I model is characterized by the so-called Science-Technology- Innovation mode of learning (Bengt-Ake Lundvall), characterised by the dominance of the science-approach i.e. formalisation, explicitation and codification The Schumpeter II model is characterized by Learning by Doing, Using and Interacting. It refers to more experience-based, implicitly embedded and embodied knowledge. The European ”Paradox” ’Systems with a lot of good domestic science but less successful in innovation’ reflects by and large focus on STI, neglect of DUI. Reasons for bias: STI-learning can be measured and manipulated more easily than DUI-learning Policies involved are also less controversial
    • The 21st Century globalisation challenge: a double change in context Access to elements from the science base becomes increasingly important for firms in all sectors – calls for a strengthening of STI- mode of learning The firm has positive expenditure on R&D. The firm has personnel with academic degree in natural science or engineering. The firm interacts with researchers attached to universities or other science institutes. But these changes and globalisation contribute to accelerating change and calls for a strengthening of DUI-mode of learning Interdisciplinary workgroups Quality circles/groups Systems for collecting employee proposals from employees Autonomous groups Integration of functions
    • Need to combine science- with experience-based learning Firms combining science-based (STI-mode) with experience- based (DUI-mode) learning appear more innovative than firms biased toward one mode. Calls for analytical efforts that establish the connection between knowledge creation through research and knowledge creation through organisational learning and interaction with users. Implies broad definitions of innovation systems, innovation policy and knowledge management Vertical outsourcing of innovation: value chain ideally driven by both cost and quality
    • Management becomes now key to exploit productivity benefits from intangibles TANGIBLE INPUTS INTANGIBLE INPUTS OUTPUT * Machinery and * Human capital equipment * Knowledge capital * Productivity * ICT and software * Organisational * Profit * Materials and capital * Sales growth natural resources * Marketing capital * Value creation
    • Cluster analysis of how people learn in different parts of Europe Based on household survey in 15 European countries restricted to 8000 people who work in the private sector in firms with more than 20 employees. Emphasis on the degree of independent problem-solving and learning at the workplace. Links DUI-learning to innovation. Four categories: Discretionary learning A lot of learning, complex tasks and delegation of responsibility for quality Lean production Job rotation, team work and quality control but little discretion Taylorism No problem solving, no autonomy Simple production Little learning but some discretion and problem-solving
    • Results: International diffusion – after correcting for sector and job function Importance of discretionary learning and lean production in the Scandinavian countries and The Netherlands Little discretionary learning and a lot of lean production in UK, Ireland and Spain Taylorism and simple production in Portugal, Greece and Italy. Germany and France posItion themselves in between 1 and 2 above.
    • 3. Future challenges: Towards a more segmented social model? Increasing need to recognize the duality in work as in: “labour”, I.e. a physical or mental wearing out activity as labour economists justify wages (a disutility) “pleasure” I.e. providing self-satisfaction in recognition, self-realisation, creativity, etc. (in many cases of knowledge workers) Employment security, shorter working time are social quality achievements applicable to the first case, not in second where lifelong learning is. The legal extension of social rights from the first to second group appears: Inappropriate, work involves positive externalities in second case Possibly behind the lack of dynamism of knowledge workers in Europe and Japan (Korea?) Undermines in the long run the sustainability of the social model Need for a segmented social model recognizing fundamental differences in work
    • Challenges of sustainable development and HR learning At the technological level dominance of Schumpeter II model of innovation and DUI form of learning with respect to efficiency gains (Clinton), engineering based incremental innovations, But need for feedback towards what could be called behavioural sustainability learning: With links towards new demand for Schumpeter I model STI breakthroughs and “creative destruction” Need for indicators: ecological footprint at level of household, firms, cities, societies Basis for various new forms of sustainable HR learning within firms with spill-overs to households and civil society