Technology Use, Organisational Flexibility and Innovation: Evidence for Germany

40 Pages Posted: 15 Sep 2005

See all articles by Thomas Hempell

Thomas Hempell

Center for European Economic Research (ZEW)

Thomas Zwick

University of Würzburg - Business Administration & Economics; Centre for European Economic Research (ZEW); Maastricht University - Research Centre for Education and the Labour Market (ROA)

Date Written: 2005

Abstract

This paper investigates to what extent the usage of information and communication technology (ICT) fosters innovation activities by facilitating more flexible organisational structures in firms. We distinguish between functional flexibility (the ability of workers to co-operate and take decentralised decisions) and numerical flexibility (the reduction of fixed costs, mainly due to outsourcing business processes). Our results from a large and representative data set of firms in Germany show that ICT use is associated with an increase in both types of flexibility but the implications for innovation activities differ. Functional flexibility is strongly positively associated with product innovations. In contrast, numerical flexibility allows firms to 'buy' innovations in the short run, but reduces innovative capacity in the longer run.

Keywords: ICT usage, flexibility, innovations

JEL Classification: L22, L23, O31

Suggested Citation

Hempell, Thomas and Zwick, Thomas, Technology Use, Organisational Flexibility and Innovation: Evidence for Germany (2005). ZEW Discussion Paper No. 05-57. Available at SSRN: https://ssrn.com/abstract=798904 or http://dx.doi.org/10.2139/ssrn.798904

Thomas Hempell (Contact Author)

Center for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany

Thomas Zwick

University of Würzburg - Business Administration & Economics ( email )

Sanderring 2
Wuerzburg, D-97070
Germany

Centre for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany

Maastricht University - Research Centre for Education and the Labour Market (ROA) ( email )

P.O. Box 616
Maastricht, MD6200
Netherlands

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