ABSTRACT
This chapter considers the new labour market relations within the high-tech sector through the prism of agency theory. Agency theory offers a valuable lens for examining work relationships as its unit of analysis is the contract between principal and agent. This chapter takes an up-close look at the nature of this contract in the conditions of the digital economy, the race for innovation and high demand for high-tech professionals. It discusses the implications of new forms of work for both employers and high-tech professionals. First, the assumptions and logics of agency theory are presented. Then, the landscape of new labour relations in high-tech industries is discussed in order to understand their contractual nature in the digital economy. New forms of work might limit workers’ agency potential by fragmenting employees from each other and depriving them of social security nets. On the other hand, the hyper-competitive high-tech industry, pressure on new technologies coupled with surging demand for high-tech professionals and labour market disequilibrium impact high-tech professionals’ agency potential. To understand the potential alignment and misalignment of agency contracts, two important variables of agency theory – risk and agency control – are examined. Finally, the usefulness of agency theory in explaining contemporary agency problems is assessed, its limitations are discussed and promising new research directions are proposed.
