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The Aging Workforce and SocialInnovation
Pre-Master S&I research paper
(words: 3924)G. Tijms
Pre-MSc Business administration. Strategy and Innovation
June 2009For information
Abstract
Purpose
– The purpose of this paper is to investigate the role of an aging workforceand its effect on social innovation. The paper identifies intellectual capital as human,structural and social capital which are the main elements of social innovation. Therole of each important building block is analyzed and the author discusses their relationship with respect to social innovation.
Design/methodology/approach
– The paper is based on in-depth literature review of aging workforce management and (social) innovation literature. The fundamentalunderlying research questions that have driven the research are: ‘‘What are theeffects of an aging workforce on intellectual capital?” and “What is the influence of an aging workforce on social innovation?” The paper is conceptual and aims tooutline a theoretical framework for further empirical research.
Findings
–
The paper first clarifies the effects of an aging workforce on intellectualcapital and workforce shortage. Intellectual capital can be divided into human,structural and social capital. Three hypotheses are stated to be investigated for further research. Than the paper explores how these concepts relate with social innovation.Social innovation aims at the social side of innovation, new business concepts,working smarter, development of skills and competences, networking etc. Thishighly interrelates with the social aspects of an aging workforce and there might besome threats as well as opportunities within the interrelation of these two topics. The New Economy we are living in today creates great opportunities for socialinnovation. This is among other things caused by web based technologicalinnovation which create the opportunity to work together with decreasing transactionand communication costs.
Originality/value
– The paper provides some insights in the relation between agingworkforce literature and social innovation. Till now most studies have analyzed thedifferent topics separately, this study tries to make the connection.
Keywords:
Aging workforce, Intellectual capital, Social innovation.
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Introduction and research gap
Competition nowadays is shifting from financial capital to innovation, creativity andknowledge (human competencies), information and the strengths of a company’snetwork also called social capital (Allee and Taug, 2006). In literature this is calledthe New Economy, the shift from the industrial or post-Fordist economy (Geromettaand Häussermann and Longo, 2005) to the service oriented economy. Maybe it iseven a step further to a new ‘networking/ social’ economy.Human competencies and firm’s social capital however are not organizationalcommodities, and they cannot be managed as commodities. The knowledge held byindividuals must be passed on to others in order for that knowledge to be leveraged(Calo, 2008). Recruiting, motivating, and retaining a talented workforce are notshort-term strategic concerns. They are systemic, protracted, and chronic problemsthat organizations will face for the foreseeable future. Demographic and workforcemanagement will be as critical a strategic issue for organizations as financial andtechnological management.Especially nowadays when the impact of the global aging workforce is alreadyremarkable and this will strongly develop into the future. Leibold and Voelpel (2006)describe in their book that the developed world’s workforce – the key source for innovation and effective companies – is shrinking at a frightening rate. The factsshown in the book describe the worse of the situation: in the United States, labor shortfalls of 5 to 10 million workers are expected in the next ten years. In Europe, populations are already decreasing in major countries, including, Germany, France,Italy and Austria (Leibold and Voelpel, 2006). McQuade and Sjoer and Fabian and Nascimento and Schroeder (2007) describe that before 2013, 20% of the Europeanworking population will go into retirement.In literature, various aspects of an aging workforce are illustrated. McMahan andSturz (2006) describe the resistance of elder people to harmful exposures. Injury datasuggest that although elderly workers are less likely to be hurt seriously enough tolose work time, they often take twice the time needed to return to work. They also donot give any data that proves that older workers are less productive. These findingsare confirmed by Streb and Voelpel and Leibold (2008) who show that there is no
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