A report on "The impact of innovation on employment in Europe" has recently been published by the European Innovation Monitoring System (EIMS). The report, based on an analysis of the 1993 Community Innovation Survey (CIS), attempts to shed light on the empirical relationship between technology, technological innovation and employment. The aim of the report is to assist governments in optimizing their employment policies through appropriately targeted policy action. Four strategies to fight high unemployment in Europe are suggested: - The promotion of innovation, in the form of improved processes, improved or totally new products as a key to more employment in both the short and long term; - Improved competition in the product and labour market; - Promotion of growth through the promotion of investment and enhanced macroeconomic demand; - Strengthening the labour supply through education and training and improving the flexibility of working conditions (work, time and pay). The study concentrates on the economic impact of innovation on employment. It presents an overview of what economists have thought about the relationship between technological change and employment and what they have empirically found out about this relationship. In a second step, the impact on innovation on employment is investigated for eight Member States, based on the results of the CIS. The study also uses firm-level, panel data for the manufacturing sector of Germany for the period 1993 to 1995, and for the manufacturing and service sector of The Netherlands for the period 1988 to 1992.