Innovation is considered critical to sustained development both in Europe and in China. At the Lisbon summit in March 2000, the European Union decided to become by the year 2010 the most competitive knowledge-based economy in the world through innovation. The revised Lisbon strategy, re-launched in Spring 2005, was more clearly focused on economic growth and job creation (employment). Reminiscent of the objectives of the European Lisbon strategy, China established a set of ambitious goals for R&D, innovation and sustainable development in its recently announced “2006-2020 Chinese National Science and Technology Development Strategy”.  Given the prime importance of these two, possibly conflicting, goals in both economies, a comparative research between China and Europe on the importance of innovation for employment and welfare is of great interest, especially in the context of intensified global competition. The aim of this project is to compare employment and welfare effects of innovation in China and three European countries (Germany, France, the Netherlands) by using a common econometric framework. The analysis will make use of large firm-level panel data sets in all four countries. The results of the econometric analysis together with the examination and comparison of the diverse policy practices in Europe and China will facilitate policy recommendations with regard to innovation, employment and welfare.This project is part of the CO-REACH network. CO-REACH is a network of European science and technology policy and funding organisations (ERA-NET).  The aim of CO-REACH is to stimulate joint research between Europe and China by supporting collaborative research initiatives in thematic areas in the social sciences and humanities. More information can be found here.