Complements or Substitutes?

The Relative Impact of Employees with VPET on the Innovation Performance of Swiss Firms Compared to Other Input Factors such as Digitalization, Physical and Organizational Capital

ETH Zürich, KOF

Lead researcher: Prof. Dr. Ursula Renold

Duration: 01.01.2016 – 30.06.2020

This project analyses the relevance of vocational and professional education and training (VPET) for the innovative capacity of the economy by estimating complementarities between VPET and other inputs for determining innovativeness, productivity, and employee growth in Swiss firms.

Using firm-level panel data from the triannual KOF innovation and ICT surveys between 1996 and 2017, the project starts by estimating translog production functions to assess complementarities among employees with different education degrees. We differentiate five types of employees, namely, lower educated employees, dual VET students, employees with VET degree, employees with professional education and training (PET) or a degree from a university of applied sciences and employees with conventional university degree. In order to understand the relationship between VPET and other inputs in the production process, the project further analyses the complementarity between employees with VPET and digitalization, physical capital, and organizational capital. The second part of the project investigates the impact of digitalization on the share of employees with VPET. A positive impact would indicate complementarity, while a negative one suggests substitution. Therefore, this second part is an alternative method of indirectly validating the results from the first part of the project.

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