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Corporate management tends to impede technological innovations in various ways. These impediments include a preference for using capital to speculate, limited upward mobility prospects for the engineering professionals who are the most knowledgeable about technology and emphasis on cutting costs rather than improving competitiveness through innovation. The threat posed by lesser-developed countries with low labor costs also dissuades managers from investing in innovation. A managerial change-of-heart would bring not only innovation but fairer corporate norms.

Microeconomic reform is equivalent to technological change aimed at increasing productivity and services for a given amount of limited resources. Simulations using an applied general equilibrium model showed that microeconomic reform can lead to a reduction in usage of productive resources such as labor, in the short term. However, this reduction can be offset if workers agree to the introduction of microeconomic reforms without demanding higher wages.

Workers in a business firm are hostile to technical changes because such changes pose a threat to their continued employment. In such an environment, a singly-skilled worker will not reveal any labor-saving ideas. If workers are trained to be multiskilled, however, support of technical innovations is more likely to occur. Such a scenario is investigated via a model of a static labor market that features several Japanese employment practices.

PAUL L. ROBERTSON and LEE J. ALSTON. Technological choice and the organization of work in capitalist firms. This article develops a framework to explore the relationship between the choice o technology and the organization of work. The framework illustrates how labour and management might react to new technologies. Whether management adopts a new technology depends on total costs, including transaction costs of implementing the new technology. Transaction costs of implementation depend on the range of labour tasks for which a new technology could substitute and the power of labour to block a new technology. Whether new technology lessens or enhances the skills of labour is result of technological choice rather than a motivation for technological choice.

Empirical evidence shows that the advent of computers undermines the demand for skilled labor. This can be gleaned from an analysis of panel data in the UK, where most aggregate skill-upgrading results from within-establishment increases in skill composition. The relationship between computerization and demand for skilled labor is significant for different worker and computer types, human capital upgrading, endogeneity and other technology variables.