Innovation, Working Conditions and Industrial Relations. Evidence for a Local Production System

The present work finds its collocation within a recent and lively literature on the relations between organizational changes and working conditions. Given the increasing concern about the effects of ‘new work practices’ or ‘high performance work practices’ on workers’ well being, we aim at investigating these effects for a Northern Italy local production system. During the 1990s several economists and managerial scholars pointed to the positive effects on workers from the introduction of new forms of work and production organization; however, some more recent studies highlight its potential negative effects. It is also important not to overlook other aspects of firms’ innovation activity and industrial relations on working conditions. Cooperative relationships at firm level between union delegates and management are likely to be linked with good quality working conditions. Our empirical aim is twofold. First, we disentangle the role of innovation intensity in four different innovation areas (technology, organization, training and ICT), on working conditions. Second, we confirm the relationship between cooperative industrial relations at firm level, and working conditions. The evidence is mixed. On the one hand, innovations have an overall positive effect on working conditions. However, this effect is weak and for specific organizational aspects, is negative. On the other hand, cooperative industrial relations are always positively and robustly linked to workers well being