Innovator Mobility in Finland and Denmark

Workers have different abilities in research, development and innovation (R&D&I) activities. Firms have different “prospects for innovation”. Innovation is facilitated by matching innovators, i.e. workers that are specialized in R&D&I to firms with good prospects for innovation. Aggregate productivity growth requires that firms with the best prospects for innovation are quickly matched to innovators. The mobility of innovators is also important for positive knowledge spillovers to materialize. We use Finnish and Danish linked employer-employee data to study labour mobility, focusing on innovators. For Finland, Denmark is an interesting benchmark country because its labour market is generally considered very flexible. We find that overall labour mobility is significantly lower in Finland than in Denmark. However, relative to other occupation groups, innovators are actually more mobile in Finland than in Denmark. In Finland, innovators tend to cluster in firms that are among the most productive in their industry.