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Local Labour Market Diversity and Business Innovation: Evidence from Irish Manufacturing Businesses

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  • Helen McGuirk
  • Declan Jordan

Abstract

This paper estimates the effect of diversity within local labour markets on business-level innovation. Using survey data and Irish census data, the paper explores whether the diversity of human capital at county level is associated with higher innovation output. Diversity in age, nationality and educational attainment is measured using an index of heterogeneity and its effect on business innovation is estimated using an innovation production function approach. It is found that diversity in nationality and educational attainment is positively associated with the probability of a business product innovating. The findings also suggest that greater external labour market diversity and greater levels of internal third-level education may be substitutes. Where a business is in a diverse location, it may not require higher levels of educational attainment among its workforce to source knowledge for product innovation.

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  • Helen McGuirk & Declan Jordan, 2011. "Local Labour Market Diversity and Business Innovation: Evidence from Irish Manufacturing Businesses," European Planning Studies, Taylor & Francis Journals, vol. 20(12), pages 1945-1960, June.
    • Handle: RePEc:taf:eurpls:v:20:y:2011:i:12:p:1945-1960
    DOI: 10.1080/09654313.2012.722918
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    Cited by:

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    2. Tavassoli, Sam & Karlsson, Charlie, 2021. "The role of location on complexity of firms’ innovation outcome," Technological Forecasting and Social Change, Elsevier, vol. 162(C).
    3. Grashof, Nils, 2020. "Putting the watering can away Towards a targeted (problem-oriented) cluster policy framework," Papers in Innovation Studies 2020/4, Lund University, CIRCLE - Centre for Innovation Research.
    4. TEKAM OUMBE, Honoré & PILAG KAKEU, Charles Bertin & Miamo Wendji, Clovis, 2019. "Impact de la qualité du capital humain sur la capacité d’innovation des PME : application sur un pays en développement [Impact of quality of human capital on the innovation capacity of SMEs: applic," MPRA Paper 92380, University Library of Munich, Germany.
    5. Fassio, Claudio & Kalantaryan, Sona & Venturini, Alessandra, 2015. "Human Resources and Innovation: Total Factor Productivity and Foreign Human Capital," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201536, University of Turin.
    6. McGuirk, Helen & Lenihan, Helena & Hart, Mark, 2015. "Measuring the impact of innovative human capital on small firms’ propensity to innovate," Research Policy, Elsevier, vol. 44(4), pages 965-976.
    7. Wojciech Grabowski & Anna Staszewska-Bystrova, 2020. "The Role of Public Support for Innovativeness in SMEs Across European Countries and Sectors of Economic Activity," Sustainability, MDPI, vol. 12(10), pages 1-19, May.
    8. Ceren Ozgen, 2021. "The economics of diversity: Innovation, productivity and the labour market," Journal of Economic Surveys, Wiley Blackwell, vol. 35(4), pages 1168-1216, September.
    9. Rachel Bocquet & Christian Le Bas & Caroline Danièle Mothe & Nicolas Poussing, 2019. "Strategic CSR for innovation in SMEs: Does diversity matter?," Post-Print hal-02380559, HAL.

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