Innovation and job creation: a sustainable relation?

Autore : Pietro Moncada-Paternò-Castello

Data: 29-10-2015

Tipo: Other

Tematica: Innovation


The dynamics behind the correlation between innovation and growth in firms are still subject to debate. One may assume that more innovative firms experience more sales than non-innovative firms during transitionary periods, but the effects of innovation on employment growth are less obvious. In a study analyzing a panel of Spanish firms between 2002 and 2009, Daria Ciriaci, Pietro Moncada Paterno’ Castello and Peter Voigt investigated whether or not the growth and persistence of employment differed among innovative and non-innovative firms. By looking at variables including company size, degree of innovation, and industry, the authors empirically tested the impact of research and development (R&D) investment on a firm’s respective growth. Their findings contribute to our understanding of the following questions:

How does innovation affect both job creation and ensure endurable levels of employment?
Does the size of a firm affect the impact of its investment in R&D? If so, do smaller firms necessarily experience more growth in transitionary periods compared to larger firms?
How does innovation affect a firm’s ability to react to positive shocks? What kinds of policy measures should be implemented to increase competition and innovation in Europe?


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