The article investigates the employment effects of technology. A set of models is developed where changes in industry-level employment are explained by changes in demand, wages, by the diffusion of innovation and its market impact. The empirical test uses data from two EU innovation
surveys - CIS (Community Innovation Survey) 2 (1994-1996) and CIS 3 (1998-2000) - on 10 industrial sectors and 10 European countries. The results of the models show the importance to discriminate between different strategies for innovation, between high- and low-innovation industries, and
between short-term labour market effects and the long-term impact of structural change.