Innovation and job creation in companies

07 December 2018

Creating and retaining more jobs in European companies involves a range of external factors, as well as growth and innovation within companies to improve competitiveness. Innovation – changes in products, processes and in other aspects of their businesses – can help companies adapt to changed circumstances, add value and become more competitive, increasing their job creation potential. Furthermore, human resources and work organisation practices create the right work environment to support innovation by enhancing skills, cooperation, quality, innovative behaviour, employee involvement in problem-solving and access to external ideas.

Policymakers need access to knowledge on which company innovations work in terms of productivity and company performance; which supports for innovation are effective; how best to foster job creation; and motives and barriers to job creation for certain types of organisations.

Faced with a slow economic recovery after the most severe restructuring of the European economy in decades, one of the key policy challenges of the European Commission is to achieve job-rich growth. The need to stimulate investment for the purpose of creating jobs is a top priority and is supported by the Europe 2020 ‘Agenda for new skills and jobs’ and the European Semester process. The Investment Plan for Europe was adopted in November 2014 and focuses on mobilising finance, supporting investment in the real economy and creating an investment-friendly environment. 

Eurofound's work

Eurofound research in this area provides valuable insights on key topics:

Key contributions

Building largely on previous Eurofound work and data from the third European Company Survey (ECS) carried out in 2013, Eurofound has explored the company-internal factors and practices as well as external factors that stimulate innovative behaviour, enhance competitiveness and boost the creation and retention of jobs.

The survey provides comprehensive information on workplace innovation practices in terms of work organisation, human resource management, direct participation and social dialogue. More in-depth studies analysed:

  • the motives behind the adoption of workplace innovation practices that enable employees to participate in organisational change and improve the quality of their working life and organisation’s performance;
  • practices in EU companies for direct and indirect employee participation in decision-making, and which of these practices are beneficial for both the establishment and the employees.

Ongoing work

Further survey analysis will examine:

  • innovation support measures in European companies and how innovation processes are set up and implemented
  • how workplace practices and company characteristics are associated with the development of employment levels in companies
  • the motivations and constraints of job creation for certain types of organisations and the role of public support measures.

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