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Technology and the Future of European Employment

Edited by Pascal Petit and Luc Soete

What is the potential of the new information and communication technologies? This book assesses the relationship between technological change and employment in all its dimensions, focusing on contemporary economies in Europe. The authors discuss patterns of growth, and the type of employment that countries might expect to be created following the introduction of these new technologies.
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Chapter 6: Technical change and employment growth in services: analytical and policy challenges

Pascal Petit and Luc Soete


Pascal Petit and Luc Soete1 INTRODUCTION It is generally acknowledged that employment in our economies is increasingly dependent on services. As in other highly developed economies, the European countries are continuing their gradual move towards a servicebased economy with today nearly 70 per cent of the total labour force being employed in service activities. It is also generally acknowledged that services provide the key to future employment growth. Neither agriculture nor manufacturing has been able to generate sufficient output growth to offset, in the last two decades, the productivity growth following the diffusion of laboursaving machinery and the reorganization of work and trades, impelled by increasing international competition. And while some high-tech manufacturing sectors have succeeded through the introduction of new and improved high-income-elastic consumer goods to generate new employment opportunities, their number has been falling steadily over time. Particularly in Europe, high-tech manufacturing sectors no longer witnessed any employment growth over the 1990s. Still, given the generally acknowledged importance of services for future output and employment growth, relatively little attention has been paid to technical change in services. But technical change in services is a key issue to understand to what extent it will help to develop new markets and welfare or will be furthering the trends of automation. The future of work is at stake in these processes and the answers are not straightforward. Technical change in services has its specificities. In the first place the development of goods and service markets is not submitted to...

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