Cambridge Journal of Economics 28:379-395 (2004)
Cambridge Journal of Economics, Vol. 28, No. 3, © Cambridge Political Economy Society 2004; all rights reserved
The organisation of innovation: collaboration, cooperation and multifunctional groups in UK and German manufacturing
Address for correspondence: Aston Business School, Aston University, Birmingham B4 7ET, UK; email: j.h.love{at}aston.ac.uk
Marked differences exist between the institutional and social context for innovation in the UK and Germany. The question addressed here is how these different contexts affect the objectives and organisation of innovation in UK and German manufacturing. In particular, the paper examines the extent to which UK and German plants engage in inter-plant collaboration and cooperation and multifunctional working as part of their innovative activity, and explores the reasons for differences in these patterns of involvement. The investigation is based on a large-scale, comparative survey of manufacturing plants in the two countries. In Germany, institutional and social norms are found to encourage collaborative inter-plant innovation, but aspects of the German skills training and industrial relations systems make the adoption of more flexible internal systems more difficult. In the UK, by contrast, the more adversarial nature of inter-firm relations makes it more difficult to establish external collaborations based on mutual trust, but less restrictive labour market structures make it easier for UK plants to adopt multifunctional working. This is linked to differences in attitudes to the property rights and transaction cost problems inherent in innovation.
Key Words: Organisation Innovation Institutions Property rights
JEL classifications: D23, O31
Manuscript received September 3, 2001; final version received April 15, 2002.