Labor flexibility and innovation in new ventures

The study investigates how labor flexibility affects innovation in new ventures. More specifically, drawing upon a sample of 143 Greek ventures less than 8 years old, it examines empirically the individual and interactive effects of functional and numerical flexibility on product innovation. It also considers how these effects are moderated by the entrepreneur’s political skill. Results suggest that functional flexibility has a positive direct effect on incremental innovation, whereas numerical flexibility has a positive direct effect on radical innovation. The interactions between numerical and functional flexibility affect both types of innovation. The results also suggest that the labor flexibility–innovation relationship is positively moderated by the entrepreneur’s political skill. These findings point toward aspects of knowledge related with flexible labor engagement and entrepreneurial relational capital that affect innovation.