Innovation and employment: an introduction

The eight papers of this ICC Special Section address the relationships between innovation of different kinds—related to products, processes, or organizational arrangements—in their effects on job creation and job destruction at the level of both firm and whole sectors, in a wide range of countries from all continents except North America and Oceania. The evidence suggests that product innovation as such does not lead to job destruction but possibly to a polarization of jobs. The effects of process innovation are more controversial. At a purely firm level, a significant negative effect on employment is often absent. However, this does not rule out the possibility of industry-wide labor shedding outcomes. Finally, the evidence so far suggests that a driver of employment dynamics in Western advanced economies much more powerful than the patterns of innovation has been exerted by globalization and offshoring to competition from emerging economies like China.