Impact of innovation on employment - Italian study
A European Innovation Monitoring System (EIMS) study entitled "The impact of innovation on employment - Alternative interpretations and results of the Italian Community Innovation Survey" has recently been published by the European Commission, DG XIII. The report assesses the impact of technological change on employment in Italy, based on data from the Community Innovation Survey. Firstly, it compares alternative views concerning the impact of innovation on employment, and analyses different economic approaches to technological unemployment. In particular, it looks at the neo-classical approach, in which the market is expected to lead to full employment, as opposed to the non-orthodox approach, which emphasizes the importance of demand management policies. The report discusses the effects of compensation effects on both the supply side and the demand side. The focus of governments on low-inflation policies rather than full employment is seen by the report's authors as the main cause of Europe's poor employment record. The service sector will be the main job creator in the future, with a relatively low proportion of new jobs created in the manufacturing sector. The report is cautious about the use of data from the Community Innovation Survey (CIS), however, since the positive effects on innovating firms may be offset by negative effects on non-innovating firms. The data has an important bearing at micro-economic level, but is of less value at macro-economic level. A number of observations on the Italian data are made, before conclusions are drawn and observations made regarding innovation policy. Undoubtedly, technical change can create unemployment. The report suggests that the direct effects of innovation on Italian firms have not been beneficial to employment, although the positive performance of small innovative firms has been encouraging. However, these small innovative firms represent a minority of small firms overall. The report concludes that greater job creation will require a change in economic policies on the part of governments. The examples of successful small innovative firms in Italy can be of interest in other areas of the EU, it suggests.
Countries
Italy