Accelerating workforce aging raises concern about whether our economies’ future capacity to innovate is endangered. A recent review of the literature and of previous studies by Katharina Frosch on the interplay between workforce age and innovation sheds light on some “do’s and don’ts” for scientists and practitioners when assessing age effects in innovation. The great majority of previous studies on age and innovative performance suggest that the capacity to produce economically relevant, novel achievements follows a curvilinear, inversely u-shaped functional form with age, with most inventions being produced by individuals between the ages of 35 and 50.
Capacity for different kinds of innovations at younger and older ages
The literature suggests that creative capacities are likely to level off at older ages in knowledge-intensive fields. Young inventors in these sectors profit from their up-to-date specialist knowledge recently acquired at university, whereas older inventors’ knowledge may be prone to obsolescence caused by technological change. In contrast, some industries are characterized by long innovation cycles. In the chemical and pharmaceutical industries or in mechanical engineering, for example, younger inventors may still rely as before on up-to-date knowledge, but inventors at older ages may be able to produce similar successes based on their experience.
However, according to the author of the review, it remains an open question to what extent the innovative performance of workers causally depends on age. In this context, the following four aspects are worth to be considered when assessing workers’ age-specific innovative performance.
Pitfalls to avoid when assessing age-specific innovative performance
A first issue to consider is whether all contributions to innovation, direct and more tacit ones, are taken into account. For example, at older ages, workers may rather enhance the innovation processes of other, younger workers by overtaking managerial tasks or sharing their knowledge and experience. So even if they are not named on patent applications, their contribution in the invention process may have been considerable. This pitfall can be circumvented by looking at the overall contribution of younger and older workforce age groups to the overall innovative performance of regions or firms instead of focusing the individual age-specific innovative performance.
However, there is still the risk that age and age-related drivers of innovative performance are confounded, in most case at the detriment of older workers. For example, older firms tend to have an older workforce, and at the same time may have outdated production facilities and be less innovative than more recently founded companies. As we cannot find out whether the older workforce would be similarly innovative as their younger counterparts if working in the “younger” company, it would be misleading to attribute the lower innovative performance of the firm to workforce age, only.
Moreover, if we want to assess the age-dependency of innovative performance at the firm level, we always face a typical “chicken-and-egg-problem”. For example, in times of economic downturn, younger and prime-aged workers with still fairly up-to-date formal knowledge and sound professional experience acquired on the job may be the first to grasp attractive alternative options outside the company, whereas older workers stay. If, at the same time, innovative performance decreases, it remains unclear if older workers are less innovative, or whether this decrease is caused because the company is facing an overall economic downturn.
Finally, it is difficult to disentangle the effect of workers’ age on innovation from so-called cohort effects, resulting from the different experiences in education, work attitudes and employment histories that different generations (“cohorts”) of workers have made. As many of these cohort-specific experience have undergone massive changes in the past years, tomorrow’s senior workforce may be substantially more competent relative to their age counterparts today.
Reliable evidence on workforce age and innovation still scarce
As a conclusion, reliable evidence on workforce age and innovation is still scarce. In particular, older workers may fare much better in innovation than a first glance suggests, as the conceptual and methodological caveats described above lead to a systematical underestimation of their innovative capacity. Thus keeping the wheel of innovation spinning on the shoulders of an aging workforce should not be impossible, and putting older workers “on the scrapheap” would mean wasting valuable resources.
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This volume has been published with financial support of the European Union in the framework of Population Europe.