La dynamique des marchés internes et externes du travail dans une économie fondée sur le savoir – DYNAMIT

In recent years, the importance of knowledge has tremendously increased in a wide array of economic activities. In parallel, employment relationships seem to have become more instable than they used to do be. The question we want to tackle in this project is: are these two changes related in any way? What is the impact of faster knowledge accumulation on the length of careers? More specifically, to what extent have long careers within firms (characteristic of internal labour markets) decreased in favour of short-term contracts implying frequent hiring and firing of workers on the external labour market? In order to investigate the dynamics of internal and external labour markets in a context in which innovation and knowledge are becoming key production factors, we will proceed through three steps. First, we will investigate the impact of technological and organisational innovations upon the relative importance of internal versus external labour market adjustments. Following the adoption of new technologies and innovative work practices, firms face higher skill requirements. They may either hire the new skills on the external labour market or promote and train their own workers, thus relying on the working of the internal labour market. Our research will permit to assess the relative importance of each of these strategies. Moreover, one may wonder how exemplary the French situation may be. France is well-known for having rather rigid labour market institutions: employment protection legislation (EPL) is more stringent than in many OECD countries and wage compression is strong, at least compared to Anglo-Saxon countries. This raises the question of whether the relative scope of internal versus external labour markets may be in some way related to labour market institutions. In order to investigate this issue, we will try to apply the same methodology as mentioned above to a country with much weaker EPL than France in order to see whether the same trends are at work, in countries characterised by different labour market institutions. A second part of the analysis will consider the potential impact of human resources upon firms' innovative capacity. This question has two dimensions, one related to the external labour market, while the second one has to do with the role of the internal labour market as a skill provider. A first line of analysis will consider the influence of the supply of education at the local level upon the adoption of new technologies and new forms of work organisation by firms. The second way for firms to get the skills they need to innovate is to rely on the internal labour market. This dimension of the relationship between human capital and technological adoption has not been investigated so far in the literature. However, it is likely to be an important determinant of firms' ability to innovate. In this second part of the research, we will try to disentangle the respective role of the external and internal supply of skills in forging firms' capacity to innovate. In the third part of the research, we will consider not only the flows of new knowledge, but also the role of the stock of knowledge itself. It is presumably an important production factor and the forms of knowledge management chosen by firms are likely to affect both their productive efficiency and their choice in terms of human resource strategies. A first line of research will investigate the determinants of knowledge management. To what extent do firms codify their knowledge in rules and procedures rather than keeping it tacit? How does this relate to the adoption of new technologies and to the increasing competitive pressure? What is the impact of this choice in terms of employment relations? These are the questions we will try to answer as a first step. As a second step, we will consider a more indirect mechanism through which knowledge management could affect the balance between internal versus external labour markets. If tacit knowledge is particularly important in the production process, the assets of the firms are likely to be intangible. In this case, access to external finance may be a problem which is likely to affect, in turn, the forms of human resource management chosen by firms. Overall, with this research, we expect to improve our understanding of the dynamics of employment relations and of the working of labour markets in a context of deep economic changes and increasing market competition.