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Received wisdom that blames globalisation and innovation for a relatively poor performance by Europe’s economy is wrong, say researchers.

An international team including the OU’s Dr Roberto Simonetti found that company restructuring was directly responsible for more job losses than new technology replacing workers or work being contracted out to developing countries.

But it said corporate restructuring could not be divorced from either innovation or globalisation.

The project, Assessing The Impact of Technological Innovation and Globalization (AITEG) brought Dr Simonetti together with Birkbeck College, South Bank University, the University of Reading and academics from Norway, Sweden, Italy and Spain to examine a number of strands of data. The researchers examined macroeconomic and sectoral data to explore topics including slow growth, unemployment and the role of technology and globalisation, the impact of technological change and of globalisation of production, globalisation of technology and EU policy perspectives.

Dr Simonetti, a senior economics lecturer, and his colleagues found the results largely contradicted previous researchers and policy makers who blamed the twin processes of innovation and globalisation for Europe’s disappointing economic performance.

“There is no automatic mechanism ensuring a national economy is able to compensate fully for innovation-related job losses,” said the researchers, who also added that “the sources of job creation and destruction were specific for individual manufacturing and service industries”.

The researchers also distinguished that while product innovation had a positive employment impact, process innovation tended to prompt a negative one.

The researchers, who were funded by the European Union, said their findings made it apparent policy in Europe had given priority to the wrong issues. “Macroeconomic policy has been deflationary, industrial policies forsaken for competition ones and innovation policies have been mainly concerned with supply-driven innovation which is often labour-displacing,” they said. “In addition, learning policies have failed to connect with new technological developments and address skill mismatches.”

The results prompted AITEG to recommend what it called “a new macroeconomic policy” which should “provide a coherent context for industrial and innovation policy”. The researchers suggested governments should introduce it alongside other initiatives such as “a policy that focuses on the activities that have the highest growth”, providing “supply-side incentives and funds to prioritise new products”, a new learning policy and a new policy to distribute more evenly “the productivity gains resulting from technological change”.

And the researchers warned that the form of globalisation in the future would depend on public policy action now. They added: “To avoid a global free-for-all where governments compete against each other for investment and jobs to obtain temporary relative economic success, policies are required, which promote productive co-operation, high international standards, asset-augmenting FDI and dynamic and innovative regional and national economies.

“Europe needs to strengthen policies that can achieve such outcomes.”