The Relationship between the Education of the Workforce and the Innovative Capacity of the Firms in Seven European Countries

In this paper, we explore the relationship between the educational level of the workforce and the innovative capacity of the firm, adopting an international perspective and comparing different countries. The data are obtained from the survey European Firms in a Global Society (efige) that was conducted in seven European countries (Austria, France, Germany, Hungary, Italy, Spain, and United Kingdom) during the 2007-2009 period and are analysed with several models of multivariate analysis. Our results show a positive relationship between the ratio of graduated employees and the measures of the innovative capabilities of the firm, even controlling for the share of personnel employed in r&d and for a large set of firm characteristics that may affect innovation and that may be differently distributed across countries. This relationship is not linear; in terms of firm innovativeness, we find decreasing marginal returns for the ratio of educated employees and for people involved in r&d. We also find some significant differences across countries regarding the intensity of the link between the qualification of the workforce and the innovative capacity of the firm