Broadening the analysis of innovation systems: competition, organizational change and employment dynamics in the Danish system

Traditionally, innovation systems have been analysed as rooted either in the R&D system or in the production system. This chapter suggests a broader approach, seeing them as rooted in the national production and human resource development systems. The argument is linked to the literature on innovation systems and illustrated by empirical data from a study of the Danish innovation systems (the DISKO project). A simple 'macro-micro-macro model' is used to structure the analysis. It is shown how the transformation pressure affects the behaviour of firms in terms of hiring and firing. The effects on aggregate employment of firm behaviour are then considered.It is shown that the intensity of competition has a major impact on employment at the level of the single firm. But it is also shown that firms that engage in product innovation and in the introduction of new forms of organisation can compensate for the job losses imposed by increased competition. It is shown that increased competition does not seem to affect the relative position of workers without vocational training at the level of the firm. But it is also shown that massive job losses for workers without vocational training tend to take place in those frims that do not respond to increased competition by introducing new products or new forms of organisation