Abstract
The long-term welfare gains associated with the emerging information society should not be taken for granted. When aggregate output grows substantially faster than productivity, unemployment has proved to decline significantly -- a virtuous circle in which efficiency-enhancing technologies clearly play a part. Yet the employment effects of new ICTs remain difficult to predict. Analysing the processes whereby new technologies create opportunities for new markets and constantly renew the content of high-value-adding knowledge work, Soete argues that Europe's ability to sustain the virtuous circle will depend largely on macroeconomic and distributional policies, and regulatory and institutional reform in labour and product markets.