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By Rodrigo Santos Andrade
Greater job security can make inventors less creative
visibility comment0 event September 28, 2026 timer 12:06
When worker protection laws were passed across the US, in-house R&D staff began to take fewer risks.
Apple’s senior vice president of Retail + People Deirdre O’Brien and CEO John Ternus welcome customers to the Apple store on Fifth Avenue, New York. AppleWhen Apple recently presented its (rather pricey) new folding phone, one of the questions hovering over the launch – and in particular its new CEO, John Ternus – was whether the technology giant can recover its famously innovative magic touch.
Apple remains extraordinarily profitable, but the company that revolutionised consumer electronics in the 2000s has been dogged by concerns over its dependency on a single, decades-old product – the iPhone – and its associated services. There is intense speculation around whether Ternus will reinvigorate the culture of radical innovation that drove Apple’s growth, as well as the development of the smartphone itself.
But concerns around innovation are not confined to one tech company. Over the last few months, figures like Gordon Brown and Ursula von der Leyen have underscored its vital economic importance, as well as its glaring absence from European industry in particular.
Our research looks at the origins of innovation, but pinpointing the forces that drive it can be tricky. We have studied innovation from many angles, from how competition from Chinese imports spurred innovation in the US electronics market, to how knowledgeable generalist inventors contribute to innovation teams.
Our most recent study looks at the ways job security factors into the innovation process. The core question we set out to answer was: are people who don’t worry about getting fired more innovative, or less?
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Conventional wisdom dictates that, yes, job security provides innovators with a safety net. It allows them to test the sorts of new ideas that innovation requires, without the fear that failure will get them fired.
This seems to hold true in many settings. Studies of managers and academic scientists, for example, suggest that greater job security or tolerance for failure can encourage experimentation, exploration and innovation.
But corporate Research and Development (R&D) introduces another dimension. When choosing new projects, these in-house inventors often have to decide what knowledge to build on: do they deepen expertise in technologies specific to their employer, or develop broader knowledge that will benefit the wider industry?
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Our study looked at 82,000 R&D professionals who secured patents at US-based publicly traded firms. We focused on established companies because this allowed us to clearly link inventors’ patents to their employers.
The study looks at data from the 1970s through to the 1990s. We chose this period because it was a time when employee-friendly “wrongful discharge laws” were being gradually passed in many states, allowing us to see the change one state at a time.
Wrongful discharge laws make it harder for firms to fire employees without a valid reason. Since different states adopted these protections at different times, we were able to compare inventors’ outputs before and after their job security increased, as well as with inventors in states where the law had not changed.
Job security turns innovators inward
We found that greater job security impacts the innovation chain, from what sorts of projects innovators take on, to how novel their innovations are, to how much firm-specific value an innovation creates for employers.
Almost immediately after each state passed wrongful discharge laws, the resulting increase in job security meant innovators turned more inward. They overwhelmingly pursued patents for projects linked to their company’s proprietary equipment, internal know-how or existing products.
In short, employees immersed themselves in mastering the specific technologies of the firm, rather than looking outward.
This, in turn, produced innovations that were less novel, but often more valuable to the employer because they were more closely aligned with the firm’s existing technologies and needs.
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In contrast, those who were less protected were more likely to rely on broad, general-use technologies and think more outside of their corporate box. Our analysis of patents showed that these less stable settings produced more novel or disruptive creations.
This might seem counterintuitive: why would less secure workers not want to prove themselves as relevant as possible to their employer? The dynamic seems to be that less secure employees were aware that they needed innovations that would stand out in the broader market – including the job market.
Neither outcome is necessarily better, as incremental and disruptive innovation each have their own benefits. But it is useful for managers to know that stable employment may encourage employees to play it safe, and use firm-specific information to innovate within the firm’s needs.
Those seeking breakthrough innovations in places with strong workplace protections may need to counter those effects. Importantly, this does not mean putting all R&D employees on notice.
Rather, leaders seeking more radical developments might consider complementary measures – such as job rotations, external collaboration, or incentives that explicitly reward novelty – to counterbalance the tendency toward more inward-looking innovation.
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David Wehrheim acknowledges financial support from grant PID2024-155952NB-I00, funded by MCIN/AEI/10.13039/501100011033 and by the ESF+ and ERDF under the European Union initiative “A Way of Making Europe.”Eduardo Melero acknowledges financial support from grant PID2021-126435NB-C21, funded by MCIN/AEI/10.13039/501100011033 and by the ESF+ and ERDF under the European Union initiative “A Way of Making Europe.”Neus Palomeras acknowledges financial support from grant PID2021-126153NB-I00, funded by MCIN/AEI/10.13039/501100011033 and by the ESF+ and ERDF under the European Union initiative “A Way of Making Europe.”
Tags: Academic Journalism, The Conversation, The Conversation Academic News
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