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Technology and the Future of European Employment

Edited by Pascal Petit and Luc Soete

What is the potential of the new information and communication technologies? This book assesses the relationship between technological change and employment in all its dimensions, focusing on contemporary economies in Europe. The authors discuss patterns of growth, and the type of employment that countries might expect to be created following the introduction of these new technologies.
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Chapter 8: New technologies, organizational change and the skill bias: what do we know?

Eve Caroli


Eve Caroli1 INTRODUCTION Until recently, economists have known very little about the relations between technology, organization and skills. The current state of knowledge could be as shown in Figure 8.1 and could be summarized by: ‘Better live on your feet than die on your knees’. Stated in a more academic way, a firm’s performance (in terms of productivity and competitiveness) was to be improved by a high skill level of its workforce, a frontier technology and a flexible organization – with the concept of flexibility to be defined. The question of the relations between technology, organization and skills was not tackled and therefore set up a black triangle carefully avoided by scholars. One reason for our poor understanding of this topic is that organizational issues have long been disregarded by economic theory. As underlined by Mowery (1990), standard neoclassical theory is a theory of markets. Its main focus has traditionally been on price formation rather than on the organization of production units. The firm is seen as a black box in which inputs are transformed into outputs according to a production function. Moreover, competition is assumed to ensure that all surviving enterprises use the same technology and face similar cost curves. Hence the internal structure is the same for all firms and the black box approach is thereby justified. The study of organizations has thus been neglected by economists and left to other disciplines. Major advances have been made in sociology (Burns and Stalker, 1961; Woodward, 1965) as well...

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