Innovation and employment in Europe: A sectoral perspective

Abstract

Following the Neo-Schumpeterian and Evolutionary stream of analytical and empirical literature on the relationship between technological change and employment, the paper provides an econometric model through which the complex web of relationships among employment growth, heterogeneous innovation strategies and structural factors such as demand and labor cost dynamics, is tested. The results seem to confirm the relevance of the product and process dichotomy to disentangle the innovation-employment relationship, and the role of demand growth either in pushing employment directly or in sustaining the reabsorption of technological unemployment. © 2007 Springer-Verlag Berlin Heidelberg.