The Impact of Training on Innovation

What is it about?

The positive impact of firm-sponsored training on workers’ wages and productivity is well documented. At the same time, many studies are highlighting innovation as an important component of firms’ performance. My paper links these two ideas and investigates whether firms who invest more in training their workers reap reward through better innovation performance.

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Photo by Riccardo Annandale on Unsplash

Photo by Riccardo Annandale on Unsplash

Why is it important?

Our results show that more firm-sponsored training leads to more product and process innovation, with on-the-job training playing a role that is as important as classroom training. These results are important because many policies used by governments throughout the world to encourage firms to invest more in training put more weight toward more formal or structured forms of training like classroom training.