Standardized Tools and the Generalizability of Human Capital: The Impact of Standardized Technologies on Employee Mobility

Abstract

The mobility of highly skilled knowledge and creative workers is an important determinant of innovation. Existing studies have not considered how the growth and diffusion of standardized technologies and tools influence the mobility of individual knowledge workers. We theorize that the diffusion of standardized tools increases the generalizability of human capital and, in turn, increases the ability of individuals to move between companies. Using data on the use of middleware in the console games industry, we find that this diffusion of standardized middleware tools led to an increase in labor mobility on average, but was associated with higher mobility for individuals with skills that complemented those tools. Worker experience with standardized tools amplified these effects, as individuals who were experienced in using these tools saw the largest shift in the likelihood of mobility. We do not find that this diffusion led to individuals leaving the industry, but we do find evidence that the diffusion of a common set of tools within an industry was associated with workers being less likely to leave that industry. These results highlight the potential unintended effects of technological standardization and the broad diffusion of standardized tools, which may enable workers to more easily shift between competitors.