Innovation Resistance of Vulnerable Workers: Focusing on Corporate Financial Performance

Abstract

Innovation, as represented by information technology (IT), is considered essential to the survival of a business. Companies use IT innovation to improve their financial performance and the effectiveness of their operations. While technological innovation in the past focused on the introduction of machines to replace physical labor, modern IT innovation, represented by artificial intelligence, has shown that it can also replace human creativity and intellectual labor, increasing job insecurity for human resources at all levels. Therefore, the interests of companies and workers in IT innovation based on the assurance of job security conflict, and workers are motivated to reject IT innovation just like their predecessors who rejected machines. Moreover, vulnerable groups of workers will experience greater job insecurity. During the economic crisis, companies try to reduce labor costs to survive, which also poses a threat to workers’ job security. This study examines the impact of IT innovation intensity on workers’ innovation resistance by dividing it into system and process aspects and identifying the moderating effects of workers’ vulnerability and firms’ financial performance. Using data from the Korean Labor & Income Panel Study in South Korea, this study reveals that workplaces with a high proportion of female workers are more likely to engage in innovation resistance in response to IT innovation; this tendency is stronger the worse the financial performance of the firm. Furthermore, this study presents the implications and limitations and directions for future research.