Flexible work and innovation

Relevant reference:

Labour market deregulation, ‘flexibility’ and innovation, by Jonathan Michie and Maura Sheehan. Published in Cambridge Journal of Economics (2003) 27 (1): 123-143.


Labour ‘flexibility’ is often portrayed as important to competitive success. Using evidence from an original survey of UK firms, this paper investigates the relationships between firms' use of, on the one hand, various flexible work practices, human resource management techniques, and industrial relations systems and, on the other hand, the innovative activities of those firms. Our results suggest that the sort of ‘low road’ labour flexibility practices encouraged by labour market deregulation—short‐term and temporary contracts, a lack of employer commitment to job security, low levels of training, and so on—are negatively correlated with innovation.


Labour flexibility means so different things to different people that we are always in need of distinguishing which flexible practices we are referring to. The “low road” practices, based in work insecurity, are too often the most demanded by corporate representatives, especially in Spain. This paper is extremely useful to contra rest such discourse, as it uncovers the drawbacks of these practices for innovative activities.


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