HC Deb 28 January 2000 vol 343 cc367-8W
Mr. Cohen

To ask the Secretary of State for Trade and Industry what assessment he has made of the impact of worker participation on innovation; and if he will make a statement. [106522]

Ms Hewitt

The impact of employment practices on all aspects of a firm's performance is of key interest to my Department. The Workplace Employee Relations Survey, published last September1, clearly shows that workplace outcomes and performance appear to be influenced by the way employees are managed. Workplaces with modern employment practices (which included problem-solving groups) were associated with improved performance, less resignations, less dismissals and better management-employee relations.

DTI analysis of data from the Community Innovation Survey and some results form survey work on SME innovation by the Centre for Business Research in Cambridge2 has provided evidence on the connections between labour market practices, business human resource management and innovation. Innovative companies use flexible labour market practices but are relatively more intensively engaged in staff development and active human resource management. Training linked to technological change goes with higher levels of innovativeness, reinforcing the message that developing staff capabilities tends to be conducive to innovation.

The positive impact of involving people throughout an organisation was also highlighted in Partnerships with People, a study conducted in 1997 and co-sponsored by the DTI. It concluded that an organisation's creative and innovative potential can be released when its employees are fully involved in all areas of the organisation.

My Department will be commissioning further research to examine the effects of partnership and workplace performance using WERS 98. We can only improve competitiveness if we work together to improve every aspect of our performance, including making the most of our innovative potential. I believe that partnership is at the heart of what constitutes a responsible and successful organisation.

1 "Britain at Work", by Mark Cully, Stephen Woodland, Andrew O'Reilly and Gill Dix, (1999) is the first of two volumes of findings which reports the findings from WERS 98.

2 "Enterprise Britain", edited by Andy Cosh and Alan Hughes, ESRC Centre for Business Research, 1998.