Workforce, Employment Practices, and Innovation: Implications for Local and Regional Policies

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    THE WORKER, FIRM, AND REGION NEXUS: HOW REAL PEOPLE AND REAL WORK SHPAE THE REGIONAL INNOVATIVE CAPACITY IN THE KNOWLEDGE-BASED INDUSTRY
    Jung, Namji (2011-03-04)
    This study proposes to rethink the current framework of the innovative region by placing an emphasis on a much under-studied dimension: the workforce and organizational capacity. In particular, this paper pays attention to commitment-based HR practices as critical factors in shaping organizational competency and innovation. Existing studies on innovation at the regional scale have identified a set of factors external to organizations as the main mechanisms of innovation, including knowledge spillover, local or global collaboration, and proximity to research universities and institutions. However, there is increasing evidence that the exclusive emphasis on external factors of innovation may capture only one side of a continuum in which creativity and innovation are strongly influenced by internal organizational factors – i.e. internal skill pools and workplace culture (Lampel, Lant, and Shamsie, 2000; Collins and Smith, 2006). I propose a new conceptual framework for the workforce-firm-region nexus and analyze the case of a high technology community in Seoul. Using the new conceptual framework and drawing from both survey data and in-depth interviews, the case study magnifies the relationship between workers and firm performance, as well as the importance of a firm’s human resource management practice in reinforcing the reciprocity between workers and a firm. I present that the roles carried out by workers in day-to-day routines are an important source of new ideas and product development. I also show evidence that commitment-based employment practices shape the firm-specific human resource that are critical in creating a distinctive competitive advantage for firms, whose aggregate success ultimately translates to local and regional economic strength Finally, I propose to extend the current theoretic framework of innovation studies in the knowledge-based industries into workforce and human resource practice dimensions and explore the directions of local and regional policies that potentially strengthen the worker-employer relationship in a way that increases the employment rate and continued growth of workforce.
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    Do Mobile Workforces Contribute to Innovation?
    Jung, Namji (Experience the Creative Economy Conference by Martin Prosperity Institute, 2010-06-21)
    Are mobile creative workers mainly responsible for innovation in the creative industry because they mediate knowledge transfer and spill-over that are critical in creating new ideas? This paper explores the labour requirements of digital content production. Drawing on 323 digital content (DC) firm samples located in Seoul, South Korea, this paper explores the causal relationship between human resource practices and innovation. A logistic regression of the data reveals that the additive index of a set of organizational practices that aim to foster internal labor pool including selective hiring, retention, and R&D investment is a statistically significant predictor of innovative capacity of the digital content firms in Seoul. However, the additive index of incentive-based HR practices including high compensation and job security did not show a significant relationship with the innovative capacity of firms. This study provides preliminary evidence on the significance of internal organization, and in particular of the role of internal labor pools, in innovation. This study suggests that the leaders of creative industry firms, particularly those in the digital content industry, should carefully choose between exploitation and exploration in managing their creative workers and creative capacity, since these practices may shape the firm’s competitive advantage.
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    Labor requirements and HR practice in Innovation: Implications for Local-Regional Workforces
    Jung, Namji (ACSP Conference proceeding, 2010-10-08)
    This paper proposes a way to measure the internal organizational capacity as an important element for innovation in the context of the creative industry at regional scale. In particular, this paper pays attention to the commitment-based HR practices as critical factors in shaping organizational competency and innovation. Existing studies on innovation at regional scale have identified a set of factors external to organizations, such as knowledge spillover, local or global collaboration, and proximity to research universities and institutions, as the main mechanisms of innovation. Presently, however, there is increasing evidence showing that the exclusive emphasis on external factors of innovation may in fact only capture one side of a continuum in which creativity and innovation are strongly influenced by internal organizational factors – i.e. internal skill pools and workplace culture (Lampel, Lant, and Shamsie, 2000; Collins and Smith, 2006). Building on this problem orientation, this paper investigates the labor requirement of the digital content industry, corresponding organizational strategies (human resource practices) and their contribution to innovation. The connection between the HR practice and its role on technological innovation has not been made clear in the existing economic geography or planning literature. Therefore, theories from human resource management (high performance human resource management) have been adapted to form the theoretic background and inform the measurement and quantitative modeling. The result of the logistic regression on 323 digital content industry firms cluster in Seoul, Korea indicates that the additive effect of various commitment-based HR practices including rigorous hiring of workers with high skills and educational attainments and worker retention is positively related to innovation, whereas the evidence for the contribution of local or international collaborations is vague at best. The public policy implication of this finding is that micro level organizational human resource strategies are, in fact, an integral part of regional workforce development and long term economic growth, which may seem trivially obvious but is something that too often we seem to overlook. These research findings lend support to policy programs targeting new employment and longer retention (such as wage subsidies), as these programs help firms exercise commitment-based HR practices.