|
Employment - Is Innovation the Key?
 n the longer term - outside the fluctuations of the economic cycle - the answer is undoubtedly yes. By bringing entirely new markets and new industries into existence, innovation has been responsible for the steady growth in employment experienced by Europe and other regions over the past 100 years.
At smaller scales, however - within individual firms, or over periods of less than ten years in specific countries or sectors - the answer is not so clear. New technologies may lead to the loss or displacement of jobs, before they create new ones. And an increase in the knowledge content of jobs reduces demand for unskilled labour as it boosts demand for better-qualified workers. The effectiveness of enterprise policy depends in large part on the accuracy with which these interactions between employment and innovation are measured and predicted.
A new Innovation Policy Study on job creation in innovative small and medium-sized enterprises concludes (Innovation - Just the Job?) that both product and process innovation boost employment, while their impact on skill levels is smaller than it is in larger firms. In the field of industrial research, meanwhile, skill shortages in Europe appear to be caused by under-investment, which is driving many qualified researchers to cross the Atlantic in search of work. The European Commission's European Technology Assessment Network recommends (Tax Less, Put Innovation to Work) fiscal measures to lower the cost to firms of employing such staff.
These measures are not primarily a means of increasing employment, of course. But by raising skill levels in Europe they will facilitate innovation - and this, in the long term, will create new jobs.
|
March 2001
