This book brings in to focus the role of the individual worker as a potential source of creativity, innovation and driver of change. It ultimately seeks to redraw traditional business models in light of the impact that current phenomena, such as technology and the many facets of globalisation, will have on future competitive success as markets continue to expand and change. According to Habbel, the key to success in the future will be to embrace change, spur on constant innovation, take risks and “… this can only happen if individuals are perceived, respected and encouraged as people with their own identity, creativity and originality” (p. 185).
The overarching ideological assumptions which underpin the book are drawn from the German capitalist system which mobilises working principles from the long‐established “human capital theory” (HCT). This theory holds that an investment in to the education of workers will enhance business performance through the improved abilities of employees to act in a more productive, creative and efficient manner, thereby placing skill as first order determinant in performance (Brown et al., 2001). Support for this argument comes from two key developments: firstly the intensification of international competition from newly industrialised countries has placed a strain on upon market share and product costs especially for parties with a history of industrial supremacy (Keep, 1999, p. 325); secondly the constant advance of technology enables new flexible methods of providing goods and services. These movements have led certain economists and academics such as Streeck (1989), Reich (1992) and now Habbel to argue for competitive success through continuous improvement in product quality, design and innovation which in turn necessitates a workforce with a broad array of adaptable skills.
The text is conceptually ordered with firstly the identification of key areas of movement and change: this includes the projected impact of globalisation upon employment; the expansion of the internet as a primary resource for clients, workers, consumers and other stakeholders; and the untapped and undeveloped resource of knowledge and training as source of competitive edge and innovation. The second section describes how labour should be de‐structured to bring forth the “centre‐less corporation” that fosters closer social interaction with the cultivation of entrepreneurial attitudes. The third chapter discusses the changes that firms may have to accommodate in pursuing strategic goals: such as how to gain the positive social and financial outcomes of mergers and perhaps more radically, accepting the occurrence of mistakes and taking risks so as to be on the cutting edge of the competition. The last section draws these ideas together with rhetorical blueprints for the future that can be summarised in the “Seven Golden Rules” (pp 184‐185): firstly, the implementation of a simple, clear value system to guide corporate action; secondly, the entrepreneurial personality as a role model for the wider workforce; third, a constant customer‐orientated culture; fourth, continuous investment in individual education and training; fifth, competence networking as part of a project based, flatter hierarchy; sixth a high level of autonomy with open flows of communication; and lastly the provision of space for workers to be creative and take risks.
The merits and criticisms of human capital theory to which the author subscribes have been debated upon the basis of research that challenges the key assumption that greater education and training automatically leads to greater performance. The book depicts innovation as the only route to competitive success in our rapidly changing global economy. Research demonstrates that while education and training may indeed foster innovation and product quality, this route is not necessarily a guarantor of success, or the only path to that goal. For example, a study by Mason et al. (1994) in the European food processing sector had two indicators of performance: productivity and quality. When quality and quantity were included, Germany's productivity was 15 per cent higher than The Netherlands and France, and 40 per cent higher than the UK. Yet when quality differences were discounted, a measurement of tonnage per employee per hour revealed UK plants to exceed German plants by 25 per cent. The German system was ostensibly a leader in value‐added performance, but competitive measures of performance must be understood within a product market context. Not only do British plants compete upon cost and successfully outstrip competitors in standardised, low cost volume that performs well in a low‐end consumer market, they also save money on labour costs due to lower skilled workers and increased automation. Similarly, in the financial service sector customer loyalty has proved more profitable than the development of employee skills per se, where it has been estimated that in the US, a 5 per cent increase in customer loyalty can increase profits up to 85 per cent (Keltner et al., 1999). These factors work together to enable high competitive success and relegate education and innovation to be lower determinants of performance.
This leads to the greater challenge of trying to apply the book's socio‐economic principles to other contexts. The German economy which Habbel uses as a template has evolved to be funded by long term objectives; “patient” capital; a strong infrastructure that links employers associations and shareholders; all of which combine to enable high quality innovation and high wages than in turn create a domestic demand for the goods and services provided (Culpepper, 1999). While without doubt a successful model of capitalism, it has been pressured by international exports from Japan, cheaper labour from Eastern Europe and has had to accommodate the development of Eastern Germany. These changes demonstrate how the system's success to date has been supported by the global market, and how fragile and changeable that apparatus can be.
There are other models of capitalism that have evolved in different ways (Coates, 2000). For example, the UK economy is characterised by short‐term shareholder capitalism; a deregulated labour market; potential conflict between the interests of industrial and financial capital; few employer cooperative networks; adversarial industrial relations; and a domestic market that is orientated around cost over quality and craftmanship. This economic environment has encouraged firms to compete not through innovation, but through takeover; monopoly power; protected markets; shifting investment abroad; asset stripping; lastly the reduction of labour costs (Keep, 1999). This final avenue to success has led to greater use of automation and standardisation that could be described as neo‐Taylorist, which contradicts Habbel's assertion that the era of Taylorism carries no relevance in contemporary labour organisation.
However, the key movement that Habbel has identified is that the global economic climate will place ever‐increasing pressure on firms and states alike to survive, and to do this they must develop a capacity to react fast, adapt and embrace change. Ultimately, if one were to attempt to implement the innovation system it would be difficult to surmount the established infrastructure of any given economy in question. For example, while in the UK high‐skilled sectors do exist (such as pharmaceuticals, IT, finance, education, medicine and law) they do not constitute a vast proportion of the economy and even in the presence of increasing credentialism, the industrial infrastructure to accommodate large numbers of graduates is not yet in place. It would appear that the UK government is reshaping the labour force to focus on greater education and training, but this is only one part of the wider socio‐economic equation. Habbel's argument is certainly forward‐thinking but for innovation to be a viable route to success, it has to be mutually supported by the other parts of the system. What would greatly consolidate the book's thesis is a more comprehensive treatment of the issues associated with locating innovation as a route to success within economies that are founded on very different social, historical and cultural principles.
Habbel recognises the most important trends that are already serving to shape business and employment across the globe, and the main value of the text is his exploration of these changes and how we may best be prepared for their impact. The first key change is forced by the internet and its ability to redraw working locations, so that workers can contribute to projects from any location to the point that geographical boundaries are eroded. While this is evidently a positive move for flexibility, the social consequences must also be recognised: a dispersed workforce may result in a sensation of isolation for employees that could be remedied by closer networking and sources of affiliation (p. 13). Secondly, current and future generations of skilled workers will be increasingly international in their career development, crossing lingual and cultural boundaries. “Young people are growing up quite naturally in to this new, open world under the influence of globalisation … Their integration presents new challenges to management. Perfect knowledge of foreign languages, which goes beyond vocabulary to include familiarity with other different cultures is the key to productive collaboration” (p. 109). This point is particularly valuable when applied to how firms may embrace an international workforce, client and customer base. Moreover, it highlights how the career options of today's graduates are continually blessed with escalating opportunity and Habbel's evocative style may serve to inspire young people in to building on their international skills set: surely a good investment for future global economy.
