New Patterns of Employment Relations in Globalizing Digital Economy: Theory and Evidence

This paper explores new patterns of employment relations in globalizing digital economy based on the PDR systems theory. The theory predicts emergence of new patterns and the possibilities of both high road and low road strategies to attain flexibility in the new environment. The generic principles for the high road strategies are to develop a creative humanware system and balanced PDR systems . These theoretical predictions are supported by macroeconomic/labor data and case studies of Korean firms. New patterns have emerged and undergone a rapid diffusion since the 1997 financial crisis while the traditional paternalistic employment relations are still prevalent. At the macro-level, the new patterns focus on only numerical flexibility and reduction in labor cost rather than on developing a creative humanware system, which may subsequently result in low skill equilibrium. However, high road strategies supporting the generic principles are found in the case studies of Yuhan-Kimberly and Samsung Electronics Co., leading companies in Korea.