This document analyzes the relationships between innovation, working conditions, and industrial relations using survey data from manufacturing firms in Reggio Emilia, Italy. The results show that technological innovation and cooperative industrial relations are positively associated with improved working conditions, supporting the "empowerment view" that changes can empower both management and workers. Organizational changes related to labor organization and reward systems were also found to impact working conditions. The study aims to provide a comprehensive perspective on how innovation and industrial relations influence working conditions in local production systems.

1. INNOVATION, WORKING CONDITIONS AND INDUSTRIAL RELATIONS. EVIDENCE FOR A LOCAL PRODUCTION SYSTEM Davide Antonioli, Massimiliano Mazzanti, Paolo Pini. University of Ferrara Department of Economics, Institutions and Territory (DEIT) Contact: ntndvd@unife.it

2. 1. Objectives 2. Literature 3. Dataset 4. Methodology and Results 5. Conclusions Outline

9. 3. Dataset (continue) Firms with RSU (percentage distribution ) Size (n. employees) Sectors 20-49 50-99 100-249 250-499 >499 Total Total (numb.) Food 1.86 1.33 1.59 0.27 0.54 5.59 21 Other Industries 1.33 0.53 0.00 0.00 0.27 2.13 8 Chemical 4.53 1.85 2.13 0.27 0.27 9.04 34 Wood 1.33 1.33 1.06 0.79 0.00 4.52 17 Machineries 23.94 16.50 11.43 3.73 2.12 57.71 217 Non-metallic mineral 3.45 5.32 4.25 2.12 1.85 17.02 64 Textile 1.33 1.33 0.26 1.07 0.00 3.99 15 Total 37.77 28.19 20.74 8.24 5.05 100.00 376 Total (numb.) 142 106 78 31 19 376

10. 3. Dataset (continue) Firms interviewed (percentage distribution) Size (n. employees) Sectors 20-49 50-99 100-249 250-499 >499 Total Total (numb.) Food 2.08 2.08 2.60 0.52 0.52 7.81 15 Other Industries 1.56 0.52 0.00 0.00 0.52 2.60 5 Chemical 4.69 1.56 2.60 0.52 0.52 9.90 19 Wood 1.56 1.04 1.56 1.04 0.00 5.21 10 Machineries 16.67 13.54 12.50 4.17 3.13 50.00 96 Non-metallic mineral 4.17 5.21 4.69 3.13 2.08 19.27 37 Textile 1.56 1.56 0.52 1.56 0.00 5.21 10 Total 32.29 25.52 24.48 10.94 6.77 100.00 192 Total (numb.) 62 49 47 21 13 192

11. 3. Dataset (continue) Dependent variables constructed on the basis of the following question: “ In 2004, also subsequently to the introduction of changes by the management, how did the working conditions change? ” Working Conditions Indexes Contents WC_1 (empowerment related items) Index capturing the average trend of 8 job items on a scale from 1 to 3 (decreased, stable, increased) Items: effort, security and job stability, employees competences, information disposable to the employees, autonomy in accomplish the job tasks, influence over the managerial decisions, monetary incentives, non-monetary incentives WC_2 (intensification related items) Index capturing the average trend of two job items on a scale from 1 to 3 (decreased, stable, increased) Items: safety/security and stress

13. Technological innovation INNO_TECH Indexes: innovation input (R&D, R&D expenditure, firm collaborations), innovation output (product, process, incremental, radical, quality control innovations) 60% of firms invested its own resources in R&D; radical innovations 27%; incremental innovations 62% Training INNO_TRAIN Indexes: training coverage, training modalities, specific competences to which training is addressed (informatics, economics and law, etc…), advantages from training Weakness of small firms (20-49 employees): 72% no training ICT INNO_ICT Indexes: ICT adoption in communication, in production and in the management of activities and external relations E.g. Material Requirements Planning 64% of firms; 82% web site; 75% intranet

14. Industrial relations Dummies: presence of bilateral technical commissions (BTC), presence of second level bargaining Indexes: Management/Union interaction on changes, firm issues, flexibilities; trend in firm level industrial relations ( I NDREL_TREND ) , evaluation of the firm level industrial relations ( INDREL_EVAL ) , union density, BTC activity, intensity of firm level bargaining Most diffused relation between management and union delegates: information Less diffused : negotiation Flexibility Indexes: coverage of contractual flexibility ( LCF ), conversion of flexible contracts in long-lasting ones; variation in flexibility types (temporal, functional, wage and organizational flexibilities) ( FLEX_VAR ) Flexible contracts: 83% of firms; 11.5% workers involved Conversion rate of flexible in long-lasting contracts in 2004: 50%

16. 4. ……..and Results (continue) Dependent variable WC_1 1 2 3 4 Structural variables Yes Yes Yes Yes Synthetic Innovation Indexes INNO_ICT * ** * Organizational changes ORG_LAB / *** / * Industrial Relations INTERAC_ISSUES ** ** INDREL_TREND ** *** ** ** Flexibility LCF * (-) FLEX_VAR *** *** ** ** Economic Performance PROD_QUEST * / / Adj R 2 0.26 0.29 0.27 0.26 F test prob. 0 0 0 0 N 191 191 156 156 Note: * 10%; ** 5%; *** 1% levels of significance

17. Dependent variable WC_2 1 2 3 4 Structural variables Yes Yes Yes Yes Synthetic Innovation Indexes INNO_TRAIN ** ** INNO_TECH * * INNO_ORG ** (-) / ** (-) / Organizational changes REW / ** (-) / ** (-) Industrial Relations INDREL_EVAL *** *** *** ** INDREL_TREND ** ** * * Flexibility FLEX_VAR *** *** * * Economic Performance VA/EMP 2004 / / * * M_VA/EMP98-03 / / * (-) Adj R 2 0.26 0.26 0.25 0.25 F test prob. 0 0 0 0 N 191 191 156 156

18. 4. …….and Results (continue) Summing up Dependent WC_1 WC_2 Influencing factors Technological innovation Not significant Positive but weakly significant Organizational innovation…. Not significant Negative and significant … .Changes in Labour Organization Positive and significant Not significant … .Reward System Not significant Negative and significant Training Not significant Positive and significant ICT Positive and significant Not significant Cooperative Industrial relations Positive and significant Positive and significant