Innovation investment and its impact on permanent employment
Abstract
Through investment in scientific, technological, and innovation activities and investment in computer equipment and communication, organizations try to create a strategy that helps them establish a better innovation performance. Mainly when these organizations are from the manufacturing industry, but the real challenge is how to connect these investments with a political of permanent employment that allows creating a good environment to create and innovate with employees willing to give their experience and knowledge to develop the best products and services. In this analysis, the relationship between investment in scientific, technological, and innovation activities, computer equipment and communications, and hiring permanent human resources are tested, with a sample of 6284 companies in 33 subsectors, a multivariate analysis using regression method and SPSS software was carried out. This paper contributes to the resources and dynamic capability view, describing how investment in innovation can help create permanent human resources that improve the innovation cycle and develop capabilities in human resources to improve innovation performance. Implications for industries and management policy are described, and possible future studies on this subject.
Keyword : innovation, permanent employment, industry
How to Cite
Velez Osorio, I. M. (2023). Innovation investment and its impact on permanent employment. Business: Theory and Practice, 24(2), 371–378. https://doi.org/10.3846/btp.2023.17263
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
Addessi, W. (2014). The productivity effect of permanent and temporary labor contracts in the Italian manufacturing sector. Economic Modelling, 36, 666–672. https://doi.org/10.1016/j.econmod.2013.09.054
Amarakoon, U., Weerawardena, J., & Verreynne, M. L. (2018). Learning capabilities, human resource management innovation and competitive advantage. The International Journal of Human Resource Management, 29(10), 1736–1766. https://doi.org/10.1080/09585192.2016.1209228
Aubert, B. A., Kishore, R., & Iriyama, A. (2015). Exploring and managing the “innovation through outsourcing” paradox. The Journal of Strategic Information Systems, 24(4), 255–269. https://doi.org/10.1016/j.jsis.2015.10.003
Belenzon, S., & Schankerman, M. (2015). Motivation and sorting of human capital in open innovation. Strategic Management Journal, 36(6), 795–820. https://doi.org/10.1002/smj.2284
Berson, C. (2018). Fixed-term contracts and labor market duality in france. De Economist, 166(4), 455–476. https://doi.org/10.1007/s10645-018-9318-y
Betts, T. K., Wiengarten, F., & Tadisina, S. K. (2015). Exploring the impact of stakeholder pressure on environmental management strategies at the plant level: What does industry have to do with it? Journal of Cleaner Production, 92, 282–294. https://doi.org/10.1016/j.jclepro.2015.01.002
Bianchi, A., Barnett, J., Dempsey, W., Giachinta, M., Hugenberg, M., & Talley, A. (2016). Applying value-focused thinking to a make versus buy decision. Industrial and Systems Engineering Review, 4(2), 171–177. https://doi.org/10.37266/ISER.2016v4i2.pp171-177
Biswas, R. K., Kabir, E., & Rafi, R. B. R. (2018). Investment in research and development compared to military expenditure: Is research worthwhile? Defence and Peace Economics, 30(7), 846–857. https://doi.org/10.1080/10242694.2018.1477235
Bustinza, O. F., Lafuente, E., Rabetino, R., Vaillant, Y., & Vendrell-Herrero, F. (2019). Make-or-buy configurational approaches in product-service ecosystems and performance. Journal of Business Research, 104, 393–401. https://doi.org/10.1016/j.jbusres.2019.01.035
Callea, A., Urbini, F., Ingusci, E., & Chirumbolo, A. (2016). The relationship between contract type and job satisfaction in a mediated moderation model: The role of job insecurity and psychological contract violation. Economic and Industrial Democracy, 37(2), 399–420. https://doi.org/10.1177/0143831X14546238
Caviggioli, F., De Marco, A., Scellato, G., & Ughetto, E. (2017). Corporate strategies for technology acquisition: Evidence from patent transactions. Management Decision, 55(6), 1163–1181. https://doi.org/10.1108/MD-04-2016-0220
Clancy, M. S. (2015). Combinatorial innovation: Evidence from patent data, and mandated innovation. ISU General Staff Papers.
Crowley, F., & Bourke, J. (2017). The influence of human resource management systems on innovation: Evidence from Irish manufacturing and service firms. International Journal of Innovation Management, 21(01), 1750003. https://doi.org/10.1142/S1363919617500037
Diaz-Fernandez, M., Bornay-Barrachina, M., & Lopez-Cabrales, A. (2017). HRM practices and innovation performance: A panel-data approach. International Journal of Manpower, 38(3), 354–372. https://doi.org/10.1108/IJM-02-2015-0028
Eichhorst, W. (2017). Labor market institutions and the future of work: Good jobs for all? (No. 122). IZA Policy Paper.
Gawer, A., & Cusumano, M. A. (2014). Industry platforms and ecosystem innovation. Journal of Product Innovation Management, 31(3), 417–433. https://doi.org/10.1111/jpim.12105
Ghezzi, A., Cortimiglia, M. N., & Frank, A. G. (2015). Strategy and business model design in dynamic telecommunications industries: A study on Italian mobile network operators. Technological Forecasting and Social Change, 90, 346–354. https://doi.org/10.1016/j.techfore.2014.09.006
Giuliano, R., Kampelmann, S., Mahy, B., & Rycx, F. (2017). Short notice, big difference? The effect of temporary employment on firm competitiveness across sectors. British Journal of Industrial Relations, 55(2), 421–449. https://doi.org/10.1111/bjir.12236
Grund, C., & Thommes, K. (2017). The role of contract types for employees’ public service motivation. Schmalenbach Business Review, 18(4), 377–398. https://doi.org/10.1007/s41464-017-0033-z
Jandhyala, S., & Phene, A. (2015). The role of intergovernmental organizations in cross-border knowledge transfer and innovation. Administrative Science Quarterly, 60(4), 712–743. https://doi.org/10.1177/0001839215590153
Khanal, D. R., & Pandey, P. R. (2019). Role of manufacturing in employment generation in Nepal: Experiences and lessons for the future. In Manufacturing and jobs in South Asia (pp. 51–84). Springer. https://doi.org/10.1007/978-981-10-8381-5_3
Lakdawalla, D. N. (2018). Economics of the pharmaceutical industry. Journal of Economic Literature, 56(2), 397–449. https://doi.org/10.1257/jel.20161327
Lützner, R., Friedli, T., & Budde, L., & Noflatscher, S. (2016, 22 July). Performance effects of factory-within-a-factory designs. In 23rd EurOMA Conference (pp. 1–10). Trondheim, Norway.
Mauno, S., & Ruokolainen, M. (2017). Does organizational work – family support benefit temporary and permanent employees equally in a work – family conflict situation in relation to job satisfaction and emotional energy at work and at home? Journal of Family Issues, 38(1), 124–148. https://doi.org/10.1177/0192513X15600729
Mitra, A. (2019). Technological progress, innovation and employment: Firm-level evidence from India’s manufacturing sector. Innovation and Development, 10(3), 451–465. https://doi.org/10.1080/2157930X.2019.1689614
Niesen, W., Van Hootegem, A., Vander Elst, T., Battistelli, A., & De Witte, H. (2018). Job insecurity and innovative work behaviour: A psychological contract perspective. Psychologica Belgica, 57(4). https://doi.org/10.5334/pb.381
Osseiran, A., Boccardi, F., Braun, V., Kusume, K., Marsch, P., Maternia, M., Queseth, O., Schellmann, M., Schotten, H., Taoka, H., Tullberg, H., Uusitalo, M., Timus, B., & Fallgren, M. (2014). Scenarios for 5G mobile and wireless communications: The vision of the METIS project. IEEE Communications Magazine, 52(5), 26–35. https://doi.org/10.1109/MCOM.2014.6815890
Portafolio. (2019, 16 April). Producción Industrial creció en febrero. https://www.portafolio.co/economia/dato-produccion-industrial-en-colombia-febrero-de-2019-528645
Saidani, W., Msolli, B., & Ajina, A. (2017). Research and development investment and financing constraints: The case of Japan. Research in International Business and Finance, 42, 1336–1342. https://doi.org/10.1016/j.ribaf.2017.07.070
Singh, J., Das, D. K., Abhishek, K., & Kukreja, P. (2019). Factors influencing the decision to hire contract labour by Indian manufacturing firms. Oxford Development Studies, 47(4), 1–14. https://doi.org/10.1080/13600818.2019.1624705
Wachsen, E., & Blind, K. (2016). More labour market flexibility for more innovation? Evidence from employer–employee linked micro data. Research Policy, 45(5), 941–950. https://doi.org/10.1016/j.respol.2016.01.020
Wang, C. H., Quan, X. I., Tsai, M. C., & Chang, C. H. (2018, March). Reciprocal complementarity in use between the knowledge linkages and organizational innovation. In 2018 IEEE International Symposium on Innovation and Entrepreneurship (TEMS-ISIE) (pp. 1–9). IEEE. https://doi.org/10.1109/TEMS-ISIE.2018.8478644
Wu, D., Rosen, D. W., Wang, L., & Schaefer, D. (2015). Cloud-based design and manufacturing: A new paradigm in digital manufacturing and design innovation. Computer-Aided Design, 59, 1–14. https://doi.org/10.1016/j.cad.2014.07.006
Wu, L., & Chiu, M. L. (2015). Organizational applications of IT innovation and firm’s competitive performance: A resource-based view and the innovation diffusion approach. Journal of Engineering and Technology Management, 35, 25–44. https://doi.org/10.1016/j.jengtecman.2014.09.002
Zahra, S. A., Larraneta, B., & Galán, J. L. (2015). Absorptive capacity and technological innovation. Wiley Encyclopedia of Management, 13, 1–5. https://doi.org/10.1002/9781118785317.weom130020
Zuzul, T., & Helfat, C. (2016). Capability lifecycle. In The Palgrave encyclopedia of strategic management. Springer. https://doi.org/10.1057/978-1-349-94848-2_597-1
Amarakoon, U., Weerawardena, J., & Verreynne, M. L. (2018). Learning capabilities, human resource management innovation and competitive advantage. The International Journal of Human Resource Management, 29(10), 1736–1766. https://doi.org/10.1080/09585192.2016.1209228
Aubert, B. A., Kishore, R., & Iriyama, A. (2015). Exploring and managing the “innovation through outsourcing” paradox. The Journal of Strategic Information Systems, 24(4), 255–269. https://doi.org/10.1016/j.jsis.2015.10.003
Belenzon, S., & Schankerman, M. (2015). Motivation and sorting of human capital in open innovation. Strategic Management Journal, 36(6), 795–820. https://doi.org/10.1002/smj.2284
Berson, C. (2018). Fixed-term contracts and labor market duality in france. De Economist, 166(4), 455–476. https://doi.org/10.1007/s10645-018-9318-y
Betts, T. K., Wiengarten, F., & Tadisina, S. K. (2015). Exploring the impact of stakeholder pressure on environmental management strategies at the plant level: What does industry have to do with it? Journal of Cleaner Production, 92, 282–294. https://doi.org/10.1016/j.jclepro.2015.01.002
Bianchi, A., Barnett, J., Dempsey, W., Giachinta, M., Hugenberg, M., & Talley, A. (2016). Applying value-focused thinking to a make versus buy decision. Industrial and Systems Engineering Review, 4(2), 171–177. https://doi.org/10.37266/ISER.2016v4i2.pp171-177
Biswas, R. K., Kabir, E., & Rafi, R. B. R. (2018). Investment in research and development compared to military expenditure: Is research worthwhile? Defence and Peace Economics, 30(7), 846–857. https://doi.org/10.1080/10242694.2018.1477235
Bustinza, O. F., Lafuente, E., Rabetino, R., Vaillant, Y., & Vendrell-Herrero, F. (2019). Make-or-buy configurational approaches in product-service ecosystems and performance. Journal of Business Research, 104, 393–401. https://doi.org/10.1016/j.jbusres.2019.01.035
Callea, A., Urbini, F., Ingusci, E., & Chirumbolo, A. (2016). The relationship between contract type and job satisfaction in a mediated moderation model: The role of job insecurity and psychological contract violation. Economic and Industrial Democracy, 37(2), 399–420. https://doi.org/10.1177/0143831X14546238
Caviggioli, F., De Marco, A., Scellato, G., & Ughetto, E. (2017). Corporate strategies for technology acquisition: Evidence from patent transactions. Management Decision, 55(6), 1163–1181. https://doi.org/10.1108/MD-04-2016-0220
Clancy, M. S. (2015). Combinatorial innovation: Evidence from patent data, and mandated innovation. ISU General Staff Papers.
Crowley, F., & Bourke, J. (2017). The influence of human resource management systems on innovation: Evidence from Irish manufacturing and service firms. International Journal of Innovation Management, 21(01), 1750003. https://doi.org/10.1142/S1363919617500037
Diaz-Fernandez, M., Bornay-Barrachina, M., & Lopez-Cabrales, A. (2017). HRM practices and innovation performance: A panel-data approach. International Journal of Manpower, 38(3), 354–372. https://doi.org/10.1108/IJM-02-2015-0028
Eichhorst, W. (2017). Labor market institutions and the future of work: Good jobs for all? (No. 122). IZA Policy Paper.
Gawer, A., & Cusumano, M. A. (2014). Industry platforms and ecosystem innovation. Journal of Product Innovation Management, 31(3), 417–433. https://doi.org/10.1111/jpim.12105
Ghezzi, A., Cortimiglia, M. N., & Frank, A. G. (2015). Strategy and business model design in dynamic telecommunications industries: A study on Italian mobile network operators. Technological Forecasting and Social Change, 90, 346–354. https://doi.org/10.1016/j.techfore.2014.09.006
Giuliano, R., Kampelmann, S., Mahy, B., & Rycx, F. (2017). Short notice, big difference? The effect of temporary employment on firm competitiveness across sectors. British Journal of Industrial Relations, 55(2), 421–449. https://doi.org/10.1111/bjir.12236
Grund, C., & Thommes, K. (2017). The role of contract types for employees’ public service motivation. Schmalenbach Business Review, 18(4), 377–398. https://doi.org/10.1007/s41464-017-0033-z
Jandhyala, S., & Phene, A. (2015). The role of intergovernmental organizations in cross-border knowledge transfer and innovation. Administrative Science Quarterly, 60(4), 712–743. https://doi.org/10.1177/0001839215590153
Khanal, D. R., & Pandey, P. R. (2019). Role of manufacturing in employment generation in Nepal: Experiences and lessons for the future. In Manufacturing and jobs in South Asia (pp. 51–84). Springer. https://doi.org/10.1007/978-981-10-8381-5_3
Lakdawalla, D. N. (2018). Economics of the pharmaceutical industry. Journal of Economic Literature, 56(2), 397–449. https://doi.org/10.1257/jel.20161327
Lützner, R., Friedli, T., & Budde, L., & Noflatscher, S. (2016, 22 July). Performance effects of factory-within-a-factory designs. In 23rd EurOMA Conference (pp. 1–10). Trondheim, Norway.
Mauno, S., & Ruokolainen, M. (2017). Does organizational work – family support benefit temporary and permanent employees equally in a work – family conflict situation in relation to job satisfaction and emotional energy at work and at home? Journal of Family Issues, 38(1), 124–148. https://doi.org/10.1177/0192513X15600729
Mitra, A. (2019). Technological progress, innovation and employment: Firm-level evidence from India’s manufacturing sector. Innovation and Development, 10(3), 451–465. https://doi.org/10.1080/2157930X.2019.1689614
Niesen, W., Van Hootegem, A., Vander Elst, T., Battistelli, A., & De Witte, H. (2018). Job insecurity and innovative work behaviour: A psychological contract perspective. Psychologica Belgica, 57(4). https://doi.org/10.5334/pb.381
Osseiran, A., Boccardi, F., Braun, V., Kusume, K., Marsch, P., Maternia, M., Queseth, O., Schellmann, M., Schotten, H., Taoka, H., Tullberg, H., Uusitalo, M., Timus, B., & Fallgren, M. (2014). Scenarios for 5G mobile and wireless communications: The vision of the METIS project. IEEE Communications Magazine, 52(5), 26–35. https://doi.org/10.1109/MCOM.2014.6815890
Portafolio. (2019, 16 April). Producción Industrial creció en febrero. https://www.portafolio.co/economia/dato-produccion-industrial-en-colombia-febrero-de-2019-528645
Saidani, W., Msolli, B., & Ajina, A. (2017). Research and development investment and financing constraints: The case of Japan. Research in International Business and Finance, 42, 1336–1342. https://doi.org/10.1016/j.ribaf.2017.07.070
Singh, J., Das, D. K., Abhishek, K., & Kukreja, P. (2019). Factors influencing the decision to hire contract labour by Indian manufacturing firms. Oxford Development Studies, 47(4), 1–14. https://doi.org/10.1080/13600818.2019.1624705
Wachsen, E., & Blind, K. (2016). More labour market flexibility for more innovation? Evidence from employer–employee linked micro data. Research Policy, 45(5), 941–950. https://doi.org/10.1016/j.respol.2016.01.020
Wang, C. H., Quan, X. I., Tsai, M. C., & Chang, C. H. (2018, March). Reciprocal complementarity in use between the knowledge linkages and organizational innovation. In 2018 IEEE International Symposium on Innovation and Entrepreneurship (TEMS-ISIE) (pp. 1–9). IEEE. https://doi.org/10.1109/TEMS-ISIE.2018.8478644
Wu, D., Rosen, D. W., Wang, L., & Schaefer, D. (2015). Cloud-based design and manufacturing: A new paradigm in digital manufacturing and design innovation. Computer-Aided Design, 59, 1–14. https://doi.org/10.1016/j.cad.2014.07.006
Wu, L., & Chiu, M. L. (2015). Organizational applications of IT innovation and firm’s competitive performance: A resource-based view and the innovation diffusion approach. Journal of Engineering and Technology Management, 35, 25–44. https://doi.org/10.1016/j.jengtecman.2014.09.002
Zahra, S. A., Larraneta, B., & Galán, J. L. (2015). Absorptive capacity and technological innovation. Wiley Encyclopedia of Management, 13, 1–5. https://doi.org/10.1002/9781118785317.weom130020
Zuzul, T., & Helfat, C. (2016). Capability lifecycle. In The Palgrave encyclopedia of strategic management. Springer. https://doi.org/10.1057/978-1-349-94848-2_597-1