About EPKE
 
 
 
 

People
 
 
 
 

Working Papers
 
 
 
 

Database
 
 
 

Links
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Home
 
 
 

About EPKE
 
 
 
 

People
 
 
 
 

Working Papers
 
 
 
 

Database
 
 
 

Links
 
 
 
 
 
 
 
 
 
 
 

What is EPKE?
The objectives of EPKE
Methodology
 
 

What is EPKE?

The Employment Prospects in the Knowledge Economy (EPKE) research project is a co-operation between a group of six economic institutes and universities in six European countries. The group carries out research on comparative analysis of levels of economic performance and differences in growth rates in the European Union. The primary objective (see here for a more detailed description of the objectives) of the research is to improve the understanding of employment generation in Europe in the context of advances in new information technology.

The EPKE research project is funded through the Fifth Framework Programme of the European Union.
 

The objectives of EPKE

The primary objective of the Employment Prospects in the Knowledge Economy  research project (EPKE) is to improve understanding of employment generation in Europe in the context of advances in new information technology. The latter encompasses innovations in information and communication technology (ICT), bio-technology, the internet, increased use of highly skilled labour and rising expenditure on knowledge generating activities such as research and development. Inherent in this primary objective is the question of whether the evidence is consistent with the hypothesis that these innovations represent a fundamental change in the way the economy operates.

The first detailed objective of EPKE is to consider knowledge generating activities in a systematic quantitative way by combining data on relevant indicators from a wide range of sources and countries. This will integrate available data for European countries at macroeconomic, industry and firm levels so as to yield a coherent, unified analysis of the impact of these innovations on economic activity.

In evaluating employment prospects EPKE asks whether or not the wide variation in employment rates in countries and industries across Europe can be explained by different rates of use of the new technology. This means EPKE looks at the question of the extent to which employment in European economies is concentrated in high technology sectors and contrast this with the position in the United States. EPKE also considers the link between total factor productivity (TFP) growth and employment generation, specifically considering the relationship between the use of R&D and ICT capital, substitution of these with other inputs, and TFP growth.

An important objective is to consider the position in the much less researched service sector activities and contrast this with the impact of knowledge innovations in manufacturing. It is important to emphasise that the objectives of the project are not to examine only those sectors or firms which produce or intensively use the new technology, but rather to see how these changes affect European economies as a whole.

EPKE is fundamentally concerned with the type of employment created, looking at the skill mix of new jobs and the question of the extent to which the use of new technologies are complementary with skilled labour. Additionally we will consider whether the institutional environment in Europe, in particular product and labour market regulations, hampers the move towards fully embracing the knowledge economy and dampens the employment generating prospects.

In summary, through careful research on these objectives EPKE will provide information on the critical linkages and interdependencies between changes in technology, employment and society. Thus it will add to social debate concerning the future development of European society and will form a framework for discussion on current policy. It will provide a comprehensive study of how the knowledge economy impacts on European employment prospects and will point to areas where Europe is deficient in reaping the full benefits from the new technology. It will yield a better understanding of the skill needs of our changing society and will identify the organisational and institutional barriers that inhibit the full exploitation of new technologies to raise employment and increase skill levels. By looking at the environment in which firms operate it will have potential implications for policy making processes at all levels (European, national, regional and local levels).
 
 

Methodology

Considerable attention has been devoted in recent years in both the media and academic research to the rising importance of the ‘new’ or ‘knowledge’ economy. Although this can be defined in many ways it generally encompasses the rapid progress in information and communication technology (ICT), the rising importance of knowledge generating activities such as research and development and the increasing use of highly skilled labour (scientists and engineers and in particular information technology (IT) specialists). In many discussions the knowledge economy has been interpreted as a possible third industrial revolution, of similar magnitude and significance as the first (steam) and the second (electricity) revolutions. The emphasis on the knowledge economy has been strengthened recently by the unusually strong performance of the US economy where high growth in productivity has gone hand in hand with strong growth in employment. This has at least temporarily brought an end to the process of productivity convergence between Europe and the US.

Disentangling the influence of new technology on production and employment first requires the measurement of the use of new technology, and at a disaggregated industry level. Hard evidence on the importance of the ‘new economy’ is in short supply, with most research carried out either for the US or at a very aggregated level. Part of the problem in answering the above questions is the lack of readily available information on ‘new economy’ variables. It is with these problems in mind that the current project will attempt to consider the influence of new technology on employment generation in Europe. In doing so particular attention will be given to generating indicators and results for service sector activities where most employment generation is likely to be concentrated.