Human resource management and innovation in the Canary Islands: an ultra-peripheral region of the European Union

Abstract

This study attempts to answer the question about how firms in an ultra-peripheral region innovate to compete in a global market when they often seem not to have the basic conditions to innovate identified in the literature. On that line, and based on the notion that firms in ultra-peripheral regions must recognise the value of their human capital in order to overcome the limitations typical of their social and geographical context, this research aimed to analyse the relationship between the human resource (HR) policy and innovation in an ultra-peripheral region of the European Union, namely the Canary Islands. The objective of this study is to identify the HR-related internal factors that can affect the innovation capability of firms. In particular, this paper considers the HR management policy, the formalisation of that policy in an HR plan, and job stability. To achieve this goal, an empirical study of 157 Canarian firms was carried out and arrived at the conclusion that high commitment human resource management (HRM) has a positive influence on organisational innovation in processes. The results also show that the formalisation of the HR policy in a plan, and job stability also increases innovation in processes.