4.3 Innovation and technology

Innovation — as a reaction to competition — is the dynamic element of production and growth. Without innovation, further development by enterprises, the economy overall and society is stymied; without innovation there are also no really sustainable productivity developments.

Innovation is driven by competition and is strengthened by creativity. Successful innovation is mostly market-driven, but successful technology-push innovation also depends on the market. Technology is one of the main contributing factors to productivity development; but on its own it does not make the enterprise or organisation competitive. Indeed, without carefully considering the ‘human factor’ as well as the organisational structure and culture, the adoption of new technology in innovation is doomed to failure. Good communication and cooperation are key prerequisites of this concertation with the human factor. Workers play a key role in product and process innovation and technology upgrading (human capital), provided that workers’ participation and organisation of the work (social capital) are optimally applied (see case studies). Yet many organisations underestimate the need for participative preparation and for training to ensure that technological change within the organisation is smooth from both the economic and safety and health viewpoints.

The potential of technology to stimulate innovative products, services and processes has remained high, as is shown by the continuing rush of developments in such domains as information technology, bio-technology, communications and pharmaceuticals. What is less often realised is that much of the potential of innovation is lost when too much focus is put on technical ideas and research and the rest of the innovation process is neglected and badly managed. This brings out the importance of such factors as: carefully planning the dissemination process; designing the overall organisation as well as the individual workplaces to foster continuous improvement; developing cultures which are supportive of continuous change; and ensuring the availability of adequate capital to enable management to concentrate on the innovation and continuous change processes, rather than spending excessive time worrying about how to pay the next invoice. Thus, any major technological or organisational change should be well prepared and followed by a period of continuous improvement, allowing the organisation to adjust step-wise to the new situation.

The speed of innovation is important for developing productivity and growth. However, there are no benchmarks in this field — ‘more haste’ can indeed mean ‘less speed’ if there is insufficient human factor involvement in innovation. The overall trend, both at the enterprise and macro-economic level, for the speed of innovation to be accelerating has given rise in part to the problems of structural change of the western industrialised countries over the past 20 years. ‘Time’ remains a relatively neglected factor for productivity development.

Innovation must lead to new products and services, to enhanced performance processes and to renewal of the economy overall. This means that innovation must not be confined to matters of new production technology but must also lead to new products and services and contribute to improving work organisation and working conditions.