Title: Innovation, open labour markets and brokerage opportunities for knowledge workers in China
1Innovation, open labour markets and brokerage
opportunities for knowledge workers in Chinas
ICT sector
- Matias Ramirez
- matias.ramirez_at_brunel.ac.uk
- Peter Dickenson
- DIME workshop Distributed networks and the
knowledge-based economy, Juan-le Pins, 10th-11th
May 2007
2Conceptualising firm level competence building
through knowledge worker networks in Chinese RD
labour markets
- 1. Intra-firm knowledge transfer strategic
resource-based view - Building unique intangible resource and
employment practices to promote
intra-organisational knowledge sharing,
complementarity of HR practices. - (Ichniowski et al 1997, Osterman 1994,
Huselid 1995, Becker and Gerhart 1996 Kleinknecht
et at 1997, Michie and Sheehan 2000, Michie and
Sheenhan 2003)
3- 2. Inter-firm knowledge transfer in the
knowledge (networked) economy - A. Inter-firm knowledge transfer and
collaboration through firm level networks
(Marshall etc) and/or networks of knowledge
workers. -
- Development of a division of labour
associated with working on the boundary of the
firm Gatekeeping, boundary spanning, specialised
services (Coleman 1988, Lesser 2000, Grabher
2004, Casper 2005). - Networks of knowledge workers can be closely
linked to concepts of social capital and
particularly socio-centric networks linked to
knowledge brokers activities (Burt 2005). -
4- Dense ties run the risk of redundancy, increases
coordination costs for little benefit. - Socio-centric emphasizes, not the network, but
the position of the individual in the network to
fill structural holes. - Brokering essential to create variation
- How to operationalise? By intertwining brokering
activities of knowledge workers with labour
market features associated with career and
rewards.
5- B. Emphasis on inter-firm mobility (in
Anglo-Saxon clusters at least) and flexible
careers. Intermediary institutions at cluster
level facilitate flexible contracts, matching
skills and entrepreneurial opportunities. (OECD
2001, Saxenian 1994, 1996, Arthur and Rousseau
1996).
63.Epistemic communities (swift innovation?
exploitation? scanning?)
- Entrepreneurial star scientists (Zucker and
Darby 1995) emphasises start-ups and epistemic
communities (Hakanson 2005) rather than
collaboration on specific projects. - Presence of high skilled labour within a
geographical area, a milieu where knowledge
workers and firms are able to scan on
managerial and technological developments. - In conclusion
- New efficiencies, a feature of network
activity, associated with open labour markets
7Features of the Chinese Innovation system
- Size and history of the Chinese science and
technology infrastructure, especially the
universities and C.A.S. - Regional technology parks in chinas innovation
system (employ 4 million knowledge workers and
account for three-quarters of all exports of high
tech products). - Labour markets of knowledge workers. 1 million
employed in RD, 20m engineering graduates by
2015.
8Beijings Zhongguancun Park
- 1988 Beijing experimental zone became Chinas
first high technology development zone. Included
Founder (Beijing University), Tongfang
(Tsinghua), Lenovo (C.A.S). - 14,000 high tech companies, 500,000 employees
- Prime catalysts are NTEs (spin-offs from CAS and
others). - Financial incentives Taxes waived first 3 years,
15 thereafter (but only 50 paid for next 3
years). - In all science parks, 15 of firms are foreign
owned, but make up 42 of valued added. - Surge of economic growth in 1990s appears to have
by-passed Beijing, focussing mainly in Guandong,
Jiangsu and Tianjin.
9Beijing Zhongguancun Science Park
10(No Transcript)
11Hypotheses
- Knowledge workers will derive a wage premium for
their tenure with high technology companies. - ZGC Park has a highly fluid labour market, that
rewards knowledge workers for mobility and
experience in the labour market - Firms in the ZGN will pay wage premiums for
employees to collaborate and network (broker)
outside of the firm in innovation projects? - Networking activities of knowledge workers will
have a positive impact on innovation performance
12Data analysis
- Survey 1 Senior RD managers in 71 Chinese ICT
firms undertaking innovation. - Survey 2 381 knowledge workers (RD employees)
from these 71 firms working on specific projects. - Sample Indigenous Chinese, ICT, located in ZGC
park, presence of RD activity, must have
introduced a new product in past 3 years.
13Network constructs
14- Inter-organisational problem solving
- Benefits from collaboration with suppliers,
customers, research institutes, academic
institutes and joint ventures. Division of labour
includes boundary spanners bridging cognitive
gaps (Leonard Barton 1995).
15- Relational networks
- Networking that relies on personal relations
of knowledge workers and ties of individuals
knowledge workers. Also lowers cost of mobility.
Embeddedness of labour markets (Macdonald and
Piekkari, 2005, Casper 2005, Granovetter (1988,
1995). Lowers the cost of labour mobility and may
help innovation, but knowledge belongs to
employee.
16- Scanning Activity
- Search and scan activity (Allen 1979,
Leonard-Barton 1995, Macdonald 1994, Bucher 2003)
associated with learning and understanding latest
technologies, managerial techniques, potential
for alliances and benchmarking and gate keeping
activity.
17Do knowledge workers network?
IOPS and REL Some/very influential in innovation
project SCAN Moderately/very important source
of learning
Source RD employees
18Regression 1 Are knowledge workers paid a
premium for their networking activities?
- Earnings FunctionW constanta1EXPi a2
EXP2ib1TENUREi b2TENURE2i c1Number of
PREVIOUS JOBS d1 SEN d2 IOPS d3 REL d4
SCAN f1 IOPSSEN f2RELSEN f3SCANSEN
where - W gross monthly wage including bonuses.
EXP years prior experience to joining present
firm, - TENURE years in current firm,
- SEN level of seniority (we distinguish
between manager/senior engineer and
non-management technical/commercial). - IOPS inter-organisational networking,
- REL relational networking,
- SCAN general networking.
- IOPSEN,
- RELSEN
- SCANSEN
interactive terms between seniority and different
types of networking
19Regression results for entire sample of knowledge
workers
- Explanatory Variable Standardised Beta
t Sig - Constant 7.692 .000
- EXP .278 2.119 .035
- EXPSQ -.120 -.937 .350
- TENURE . 698 5.165 .000
- TENURESQ -.412
-3.073 .002 - SEN -.214
-1.302 .194 - Number PREVIOUS JOBS .174
3.174 .002 - IOPS .028 .506 .613
- REL -.028
-.504 .615 - SCAN -.049
-.762 .447 - SCANSEN .371 2.207
.028 - IOPSSEN .052
.445 .180 - RELSEN -.013
-.129 .234 - Dependent Variable gross monthly wage plus
bonuses. - Model summary
- R2.253, adjusted R2.229, F4.872, Sig.028
n381
20Do networking activities impact innovation
performance? Innovation Performance Construct
(DV)
Construct Items Source ?
Project success in meeting deadlines Senior RD manager
Project success in technical capability Senior RD manager
Project success in market share Senior RD manager
Project success 0.62
21Innovation Success function constanta1
Size b1 Ownership c1 SCAN c2IOPS c3REL
whereSize Number of employees Ownership
Dichotomous variables between cooperative
enterprise and privately ownedScanningInter-orga
nisational problem solvingRelational networking
Dependent Variable sourced from Senior RD
managers, independent variables sourced from
knowledge workers.
22Regression results for innovation success
- Explanatory Variable Standardised Beta
t Sig - Constant 39.77 .00
- Size -0.15 -1.32
0.18 - Ownership -0.33 -3.31 0.00
- Scan 0.24 2.14 0.03
- IOPS -.165 -1.54 0.13
- REL -.12
-1.11 0.27 - Dependent Variable Success on innovation project
as measured by degree of success in meeting
deadlines, market - share and technical capability.
- Model summary
- R2.20, adjusted R2.17, F4.587, Sig.036 n71
23Discussion of results
- Firms that engage with their environment will
perform better than those that do not do so. - Scanning carries the least cost associated with
collaboration. - Little evidence of innovation driven by formal
collaboration (brokering) with other firms or
academic institutions or relational networks.
Why? - innovation is not complex amongst Chinese firms,
therefore does not require collaboration? - High transaction costs to formal collaboration
(poor social capital, low transparency of
institutions?) - There may be high costs associated with
relational networks (Guanxi reciprocity?). - Institutions too regimented, inflexible,
resistance to reward individuals working on the
margins of the organisation?