Is it all the same? Types of innovation and their relationship with direct control, technical control and algorithmic management

Abstract

Using firm-level data from 28 European countries, this paper explores the relationship between two types of innovation (process and digital) and different forms of control (direct and indirect) at the workplace. We find that (1) digital innovation is more common than process innovation; (2) more innovative firms record higher levels of indirect control (especially related to algorithmic management) and lower levels of direct control; (3) the relationship between innovation and control is not uniform across European regions. These findings nurture the debate on the future of work as the process of digitalisation may promote a shift towards indirect forms of control and contribute to reducing the degree of direct control. Moreover, these changes may also affect the bargaining process and lead to a redefinition of managerial roles, though it should be acknowledged that social and institutional factors play an important role in shaping this process.