Labor Market Institutions, Skills, and Innovation Style: A Critique of the ‘Varieties of Capitalism’ Perspective

Recent work on innovation performance within the national systems of innovation (NSI) framework has sought to go beyond the focus in the seminal contributions on science-industry links and the R&D activities of industrial firms (Nelson, 1993) or on the nature of user-producer relations promoting interactive learning (Lundvall, 1992). The more recent work has sought to widen the NSI perspective by exploring the way labor market institutions and systems of social protection impact on employee learning and innovation outcomes (Lorenz and Lundvall, 2006; Holms et al., 2010). A focus on the institutional determinants of the innovative performance of firms is also a hallmark of research on the varieties of capitalism (VoC) by Hall and Soskice (2001), who were perhaps the first to emphasize the way labor markets and vocational training systems shape differences in innovation style across nations.