It is widely recognised that while expenditures on research and development are important inputs to successful innovation, these are not the only inputs. Further, rather than viewing innovation as a linear process, recent work on innovation in business and economics literatures characterises it as a complex and interactive process involving multiple feedbacks. These considerations imply that relevant indicators for innovation need to do more than capture material inputs such as R&D expenditures and human capital inputs.
The main contribution of this paper is to develop EU-wide aggregate measures that are used to explore at the level of national innovation systems the relation between innovation and the organisation of work. In order to construct these aggregate measures we make use of micro data from two European surveys: the third European survey of Working Conditions and the third Community Innovation Survey (CIS-3). Although our data can only show correlations rather than causality they support the view that how firms innovate is linked to the way work is organised to promote learning and problem-solving.