ABSTRACT
This chapter describes the sources of underemployment of middle-skilled workers. It considers the description of the empirical model to test the relationship between underemployed middle-skilled workers and the innovative outcome in European countries. Middle-skilled workers may have a direct effect on innovation because they may generate ideas that flow up to upper management, and also because they are a key element in absorbing and adapting external knowledge to internal routines and knowledge. In some industries such as low-technology industries, the contribution to innovation of middle-skilled workers is larger than the contribution of high-skilled workers. Underemployment may affect the contribution of middle-skilled workers to innovation. Innovation involves the construction of a conceptual framework which shapes the interaction between firms’ internal resources and the environment in terms of knowledge acquisition, transformation and dissemination. Typically innovation requires effort from the workers to engage with these knowledge-related activities beyond their routine tasks.
