EN Official Journal of the European Union C 132/22

Opinion of the European Economic and Social Committee on ‘Innovative workplaces as a source of productivity and quality jobs’ (own-initiative opinion)

2011/C 132/05

Rapporteur: Leila KURKI

Co-rapporteur: Mihai MANOLIU

On 16 September 2010, the European Economic and Social Committee, acting under Article 29(2) of its Rules of Procedure, decided to draw up an own-initiative opinion on:

Innovative workplaces as a source of productivity and quality jobs

On 20 October 2010 the EESC decided to change the study group into a subcommittee.

The Subcommittee on Innovative Workplaces, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 23 February 2011. The rapporteur was Leila Kurki and the co-rapporteur was Mihai Manoliu.

At its 470th plenary session, held on 15 and 16 March 2011 (meeting of 15 March 2011), the European Economic and Social Committee adopted the following opinion by 94 votes to 1 with 2 abstentions.

1. Recommendations

1.1 The Committee believes that it is the European Union's task to support all Member States and companies in their efforts to increase workplace innovation. Innovation at the workplace is used to try and remodel organisational activities in a sustainable way while at the same time improving both productivity and the quality of work. Areas for improvement are work processes, work organisation, working methods and tools, the physical working environment, professional skills and working practices, and management and leadership.

1.2 The EESC recommends that the basic concept of the ‘innovative workplace’ be clearly defined. The lack of a commonly recognised concept could be one of the reasons why innovation at the workplace has had a limited place in most EU policy documents in the past. The EU institutions, Member States, social partners and civil society organisations need to understand the significance of innovations and the means used to effect them, especially at the company/organisational level.

1.3 The EESC believes that although the concept of the ‘innovative workplace’ is not mentioned in the Commission document, it is at the heart of the Europe 2020 strategy, as it is one of the key prerequisites for the success of this strategy, and therefore recommends that the ‘innovative workplace’ concept should be incorporated into the strategy.

1.4 The EESC recommends that, in order to improve the balance of the Europe 2020 strategy, the Commission should launch a pilot project on innovative workplaces as part of the ‘Innovation Union’ flagship initiative. The main thrust of the project should be improving the quality of working life. The EESC believes that further studies should be initiated without delay on the relationship between the quality of working life, innovativeness and productivity, and that a European index should be introduced describing the quality of working life and its effects on innovativeness and productivity. We have to measure progress with reliable indicators that focus not only on input, but also and especially on output.

1.5 The EESC is concerned that EU funding is focused on high-technology product innovations, and that workplace innovations do not feature prominently enough. In its view, innovation policy should concentrate more on how the different partners can work together more effectively to promote innovative workplaces and in that way improve the EU's competitiveness and well-being. The EESC points out that EU funding can be used to boost innovation at the workplace and proposes that the Commission should examine all its funding instruments and make the necessary adjustments to them as soon as possible (e.g. the Structural Funds, in particular social funding, the research and development framework programmes, and education initiatives).

1.6 The EESC considers that when evaluating innovation policy it is important to focus on how skills are utilised and developed at the workplace, not just on the supply of skilled workers. The situation with regard to working and employment conditions and the working environment is equally important. A new, multisectoral approach is needed in companies and organisations to enhance activities. The EESC recommends that the Commission and the Member States should reflect seriously on what kinds of policies and work organisation have been effective in enhancing innovativeness through investment in skills. To find out what is working at company and organisation level, the Commission should support research and the dissemination of research findings. The EESC also believes that is critical for the Commission to evaluate existing innovation strategies to make sure that a definition of workplace innovation is included in all of them.

1.7 The EESC believes it is important for the EU single market to function in a way that supports an environment in which companies and organisations are motivated to develop innovativeness. Competition between companies must be based on the quality of products and services and environment-friendliness, not just on prices. Public procurement plays an important illustrative and guiding role here.

1.8 The EESC notes that Member State governments have a strategic role to play in this sphere: investment in innovation projects and different economic incentives are the key. Efficient use of funding to promote innovation calls for a long-term perspective, a methodical approach and support in the form of advice and guidance with launching and carrying through improvement projects. The social partners bear a major responsibility in this regard for preparing, implementing and evaluating projects. The role of civil society organisations in organising training and presenting best practices must be strengthened.

1.9 It is important to bear in mind that innovation policy is at different stages of development in the various Member States. The EESC believes that the Commission should provide opportunities and facilities for new capacity-building (e.g. through best practice and mutual learning projects) for those countries that do not yet have much experience with innovation generation in companies and organisations. It would be useful, in EU innovation and training initiatives, to emphasise workplace innovation and new kinds of professional skills (in addition to technical and professional knowledge, these might include communication skills, creativity and innovative ability) and management practices. The Commission can also draw on the work of development centres in a number of Member States that promote innovation, quality of working conditions and productivity.

1.10 The EESC notes the importance of continuing the debate about innovative workplaces in Europe's various forums, the Member States, companies and organisations. The EESC has a key role to play in making the social partners, civil society organisations and policy-makers in general more aware of the need to develop policies that enhance innovation in the workplace. The EESC's task is to promote, in its texts and in EU policy documents more generally, the mainstreaming of innovation, in particular by presenting its views on innovation policy in its opinions on economic, employment and innovation policy issues, and by using its close contacts with the economic and social councils of the Member States.

2. Innovative workplaces - their importance for economic growth, sustainable productivity and quality jobs

2.1 The EU Member States and institutions have committed themselves to pursuing a strategy that will help Europe to come out stronger from the crisis and turn the EU into a smart, sustainable and inclusive economy delivering high levels of employment, productivity and social cohesion. The Europe 2020 strategy sets out a vision of Europe's social market economy for the 21st century (1).

2.2 This opinion is part of the EESC's input into the Europe 2020 strategy and relates in particular to the ‘Innovation Union’ and ‘An agenda for new skills and jobs’ (2) flagship initiatives, and to promoting the quality of work and lifelong learning (3).

2.3 In this opinion innovation is defined in accordance with a broad understanding of innovation: ‘Innovation: applied competence-based competitive advantage, which can emerge from scientific research, technology, business models, service solutions, design, brands or methods of organising work and production, and improving the working environment. Typically, an innovation is generated through a combination of different competencies, and it promotes the advancement of businesses, society and well-being.’

2.4 The concept of innovation includes product, service, technical, social and functional innovations in all sectors and in all kinds of organisations. This approach sees companies, voluntary organisations and public sector organisations as innovators.

2.5 Workplace innovation is used to try and sustainably improve the productivity of organisations, while improving the quality of working life. Innovative workplaces support social and organisational change which incorporate integrated and sustainable approaches, improve companies' performance and reduce long-term operating costs. Areas for improvement are work processes, work organisation, working methods, the physical working environment and tools, professional skills and working practices, and management and leadership.

2.6 Based on the above definition of innovation, investments made in the context of innovation policy should be targeted at organisational and employee-driven innovations in the workplace in order to improve the performance of companies and public and other organisations, enhance competitiveness, create more and better jobs (new types of jobs in existing sectors and new jobs in new sectors), and increase sustainable productivity growth and quality of employment. Such investments promote the effectiveness of employers, workers and society as a whole.

3. New elements of growth and changes in work culture

3.1 Europe needs new elements of growth for its economy and well-being. We need productivity growth in all sectors. Achieving this in a sustainable way can promote innovativeness and create more quality jobs. Improving productivity and the quality of working life is based chiefly on combining technology and employee skills, engagement and motivation of staff, as well as leadership, to yield new products, services and working practices. The organisation's improved innovation capacity creates a virtuous circle where innovativeness generates productivity, making it possible to plough investment back into the organisation to support innovativeness (4).

3.2 Working life will go through a major cultural transformation in the coming years. This is due to factors such as changes in the size of the workforce resulting from demographic developments, the higher education level of workers, the impact of advances in research (especially medicine) on life expectation and the duration of working life, penetration of digitalisation in production and services, global competition and the demands of sustainable development.

3.3 A key issue for future national and European competitiveness is how work will be organised and how people will be managed in the workplace. People increasingly want their work to be meaningful and value the meaning that work gives their own life, and there are growing demands for reconciliation of work, family and leisure time. There are also calls for working hours and remuneration systems to respect people's individual needs. Workplaces are becoming more diverse environments, where workers of different ages, and of different nationalities and minority groups, have to be managed. Technological progress has a critical impact on working environments and tools. The workplace of 2020 will be best described as: cooperative, authentic, personal, innovative, and centring on social contacts (5).

3.4 Changes in the culture of work create pressure for changes in working practices and management. Increased sensitivity to sustainability considerations is a trend that will increasingly shape the nature of work, as companies begin to measure success and make operational decisions with reference to economic, social and environmental parameters. A guiding principle for sustainable workplace design is to create workplaces that are not only healthy and productive, but which are also inspiring and improve well-being.

4. Innovative workplaces

4.1 An organisation's innovation capacity depends on the motivation and commitment of its management and staff to regenerating their own work and the organisation. The result is updated product and service models or organisational processes that create added value for customers. The more advanced the practices an organisation applies in its innovation activity, the better its ability to implement innovations (6).

4.2 Studies show that a greater number of an organisation's successful innovations are explained by workplace innovation than by technological innovation (7). It is also important to understand the different aspects of the regeneration process: in most cases, product and service innovation can succeed only if there is innovation in relation to the organisational and working environment (8).

4.3 It is also important to invest in research and technological development. Success is not always determined by having the newest technology, but by having the most productive technology, which can be used in a large number of applications. It is also important to exploit opportunities provided by technology developed elsewhere (e.g. ICT, digitalisation) and the regulatory environment (e.g. standardisation). However, research findings and technology do not automatically translate into new business activities or productivity. Applying technology often requires a high level of in-house skills. Intellectual capital (9) and the investment that promotes it must be harnessed more effectively. These are generally the weakest links in the application of new technology.

4.4 When evaluating innovation policy it is particularly important to focus on how existing skills are utilised and developed in an organisation, not just on the supply of skilled workers. There is evidence that the share in the economy of organisations which promote individual and organisation-wide learning in their management practices is also a very strong indicator of innovation capacity in the economy as a whole (10) (11).

4.5 It has not yet dawned on companies what benefits will accrue from innovation based on improving the professional skills of their staff. Unfortunately, according to a Eurofound working conditions survey (12) and a Cedefop (European Centre for the Development of Vocational Training) study (13), European companies still invest far too little in intellectual capital. Only 26 % of the companies that do train their staff foresee the professional skills that will be needed in the future.

4.6 In practice all innovations are the fruit of previous innovations, accumulated experience, learning and professional competences. Considering how important a role the employees in the company play as sources of knowledge and ideas, it is amazing how little this has been used or taken into account in innovation creation policies and discussions (14).

4.7 Workplace-based innovation represents the potential to integrate the ideas, competencies and experience-based knowledge of all employee groups. There is empirical evidence that the likelihood of workplace innovation is increased by good working relations, working environment and conditions of work (15) (16). According to case studies (17), such activity has a number of advantages and a positive impact on companies' overall profitability. Positive side-effects are improved job satisfaction and reduced sickness absence. Workplace-based innovation activity can also yield efficient ways of saving energy and resources, as well as improving the functioning of the physical working environment. Thus investments made are paid back to the company or organisation many times over.

4.8 Of crucial importance to companies' and organisations' success and position are workers' interest in work, creative skills and initiative (80 %). We are only in the early stages of understanding these attributes and drawing on them as a competitive asset, since management is not well enough informed about their significance. The importance of traditional worker attributes such as obedience, diligence and intelligence is understood, but in a globalised world and a context of technological progress their role as competitive assets has decreased substantially (18).

4.9 Studies show that absence of motivation on the part of management, where no need for improvement measures is perceived, is the most common obstacle to workplace innovation. Other obstacles are lack of correct information, poor ability to promote change and the potential business risks associated with change (19). Workers' fear of change is also becoming an obstacle, in particular where the workplace lacks a culture of participation.

4.10 Managing change and creating innovative processes therefore remain a considerable challenge for most companies and organisations, and training in these skills is inadequate (20). Human resource management should be seen as a strategic aspect of management. Such skills could act as a new kind of stimulus to economic growth. Novel incentives are needed to get management and employees engaged with improvement activities and decision-making, together with a business culture that motivates people to cooperate and involves them in enhancing their organisation.

Brussels, 15 March 2011. The President of the European Economic and Social Committee Staffan NILSSON

(1) Europe 2020 includes three mutually reinforcing priorities:

— Smart growth: developing an economy based on knowledge and innovation.

— Sustainable growth: promoting a more resource-efficient, greener and more competitive economy.

— Inclusive growth: fostering a high-employment economy delivering social and territorial cohesion.

(2) EESC opinion on ‘New skills for new jobs’ (OJ C 128, 18.5.2010, p. 74).

(3) EESC opinion on the ‘Employment policy guidelines’ (OJ C 107, 6.4.2011, p.77).

(4) EESC opinion on ‘Promoting sustainable productivity in the European workplace’ (OJ C 10, 15.1.2008, p. 72–79).

(5) Max Mickelsson, workshop presentation, Helsinki, 25.1.2011.

(6) Bessant, John (2003): High-involvement Innovation (Innovative capability's eight dimensions).

(7) Frank Pot, Radboud University and European Association of National Productivity Centres, Workplace innovation for better jobs and performance, November 2010, Antalya.

(8) For example: Terhi Arvonen / Lumene, workshop presentation, Helsinki, 25.1.2011; and Laura Seppänen and Annarita Koli / Social services in the city of Helsinki, workshop presentation, Helsinki, 25.1.2011.

(9) Most investment in intellectual capital is investment in innovation, chiefly R&D spending. Trademarks, human resources, organisational structure, software investment and digital knowledge, branding, business methods and design are also important. Intellectual capital emphasises employee skills and the importance to the economy and productivity of creating, applying and utilising new knowledge.

(10) Dirk van Damme, OECD Centre for Educational Research and Innovation, at a hearing of the EESC Labour Market Observatory held on 15 December 2010.

(11) OECD, Innovative Workplaces, 2020: ‘… a work organisation supporting innovation through the use of employee autonomy and discretion, supported by learning and training opportunities’.

(12) Eurofound, European Working Conditions Survey - 2010.

(13) Cedefop, Encouraging continuing training by enterprises – time for a rethink? Briefing note, March 2010.

(14) Tarmo Lemola, Innovaation uudet haasteet ja haastajat (‘The new challenges of innovation’), WSOYpro Oy 2009.

(15) For example, Andreas Crimmann, Institute for Employment Research (IAB), Germany, LMO hearing held on 15 December 2010.

(16) Tuula Eloranta, workshop presentation, Helsinki, 25.1.2011.

(17) LO (Danish Confederation of Trade Unions), Employee-driven innovation, 2008.

(18) Tuomo Alasoini (based on an idea by Hamel, 2007), workshop, 25.1.2011, Helsinki.

(19) Tuomo Alasoini, workshop presentation, Helsinki, 25.1.2011.

(20) Dirk Ameel, Ameel D&C bvba, LMO hearing on 15.12.2010.