Innovation Policy
As for innovation policies, we believe that it is time to set them up in order to foster both technological and organizational innovation, centered on labor organization changes and based also on models of direct and indirect worker participation in manufacturing and services.
To this end various tools can be designed. First, reactivating the tax credit for the research and development (R&D) expenditure invested by the firms. Secondly, specific policies could be designed in order to sustain organizational innovations aimed at increasing employee participation in firms’ decision-making, improving their responsibility and autonomy and reducing the hierarchical levels. Italy shows less organizational innovation than other European countries (Eurofound, 2011). So, to increase organizational innovation, Italian firms should consider adopting a shared protocol stating the minimum organizational standard to be met, with the help of economic incentives, and cut the tax wedge linked to labor organizational innovations. This intervention aims to increase productivity, setting precise targets for productivity growth (see Antonioli and Pini, (2013) and Pini, (2013e) for a detailed discussion).In fact, it has long been recognized that organizational innovation has a positive impact on firms’ economic performance, particularly when measured as labor produc- tivity.16 Despite vast empirical evidence showing a positive relation between organizational innovations and economic performance, especially when organizational changes are adopted in bundles exploiting their complementarities, Italian firms lag behind many European countries. To tackle this problem of insufficient innovation, we must think of implementing innovation policies that not only spur R&D or technological development but also subsidize firms introducing complementary organizational innovations. This intervention aims to increase productivity, whose growth targets are fixed at national bargaining level (see Antonioli and Pini, (2013) for a detailed discussion).
3.3