Innovation

• Establishments that introduce innovations to the market tend, on average, to be large (250 or more employees) and young (10 years or less in operation), according to the ECS 2019. This suggests that there is much potential in the economy for boosting innovation among small and medium-sized enterprises (SMEs) and in establishments more than 10 years old. 
• Innovative establishments are highly digitalised compared to the EU average. In particular, they are likely to use data analytics to improve their production processes or service delivery. 
• Innovation is not just a technical process of developing or acquiring technology; it also requires companies to adopt work organisation, direct employee participation and HRM practices that support innovation activities. 
• Establishments where management facilitates employees to work autonomously and where self-directed teams are prevalent are more likely to innovate in their market than workplaces where the predominant model is one of managerial command and control. The case studies of innovative companies suggest that, where workers have autonomy in their jobs, they are more likely to propose suggestions for new products and services and process improvements. 
• The management in innovative establishments has high expectations of employees – in terms of helping colleagues, staying longer at work when needed and making suggestions for improvements to the business – and also uses a range of practices to motivate them. The case studies show that managers in innovative companies encourage employees to be creative and to think outside the box. 
• Establishments that offer comprehensive training and learning opportunities are more likely to innovate than those where the scope for skills development is limited. The case studies suggest that innovation is supported not only by training from external providers, both formal and non-formal, but also by internal non-formal and informal learning facilitated through work organisation practices and job design (‘non-formal’ meaning intentional, structured training that does not necessarily lead to formal qualifications). 
• A crucial element for fostering innovation is employee participation in organisational decision-making. Establishments that regularly engage with staff and use several means to do so, and where workers have an influence on management decisions, have a higher likelihood of introducing innovations to the market, compared to those establishments characterised by the absence of these practices. 
• Collaboration with other establishments is positively associated with innovation in companies. Evidence from case studies shows that companies tap into their large networks of collaborators, experts and customers to develop new ideas and to stay up-to-date with new technologies, services, products and processes.

Eurofound research has explored the paths European companies take towards workplace innovation and their outcomes, based on EU-wide survey data. It has also examined factors, and specifically workplace practices, associated with innovation in European establishments. Research on win-win arrangements helped to better understand whether certain company practices are linked with mutual gains (or win-win outcomes) that help companies to grow and innovate while at the same time benefiting workers.

Eurofound surveys and innovation

Eurofound’s Europe-wide surveys offer comparative analysis on the scale of company innovation and the role played by employee involvement, training and social dialogue in fostering workplace innovation and better working conditions. Other studies at national, sectoral and workplace levels have highlighted cases that have achieved win–win benefits and analysed the elements that underlie them.

Company practices

The European Company Survey (ECS) 2019, the fourth since 2004, and carried out in partnership with sister Agency Cedefop, analyses workplace practices related to work organisation, workplace innovation, human resources policies, employee participation and social dialogue.  

• Survey: European Company Survey 2019

The two Agencies have looked at innovation in EU companies, based on ECS 2019 data and case study research in 2020. The research investigates the characteristics of innovative companies and, in particular, the innovation-enhancing workplace practices that they employ. It offers insight into how these practices link to business innovation and enhance subjective well-being at work, as well as how they contribute to increasing the innovation potential of companies. 

• Publication: Innovation in EU companies: Do workplace practices matter?
• Blog: What can companies do to spark innovation in the workplace?

A 2017 ECS study on innovative changes in European companies explores which workplace practices have the strongest links to innovative company behaviour. It looks at innovation in the form of new or significantly changed products or processes, new or improved marketing methods, and organisational change.

Eurofound’s 2015 ECS-based research on workplace innovation in European companies has shown that the competitiveness of companies does not depend solely on their capabilities for technological innovation: it is also shaped by the design and organisation of workplaces and the extent to which organisations are innovative in this regard. 

Working conditions

The European Working Conditions Survey (EWCS) 2015, the sixth since 1990, provides a wide-ranging picture of Europe at work, looking at work organisation, work–life balance, health and well-being at work, employee participation and employee involvement. The EWCS 2015 overview report showed that 67% of employees are at least ‘sometimes’ involved in improving the work organisation or work processes of their department or organisation. A smaller proportion (31%) work in a 'high-involvement organisation’, characterised by a high level of task discretion and a high level of organisational participation. 

• Survey: Sixth European Working Conditions Survey: 2015

Industrial relations

Research on innovative measures through social dialogue at company level identifies how management, employees and their representatives find common solutions to work organisation problems.

Further research on changes in remuneration and reward systems examines the different types of supplementary pay schemes, their prevalence in different countries and sectors across the EU and Norway, and their relevance to different groups of employees. As part of the human resource management practices, remuneration and rewards play a role in encouraging creative thinking, motivating innovative behaviour and rewarding employees. This research shows the extent to which such practices are used in European establishments.

Born global enterprises

‘Born globals’ are young, small and medium-sized companies engaged in international activities immediately after start-up. While showing diversity in some of their other characteristics, one aspect they have in common is that they are highly innovative. Eurofound research on these enterprises explores their employment and economic potential. The study also examines the public support instruments available to these start-up enterprises, such as entrepreneurship and internationalisation support.

Eurofound will explore the impact of crucial innovations in computing and telecommunications technologies in its digitalisation topic.