“Job losses in some sectors, along with new job opportunities in other sectors, are an inevitable accompaniment of the process of globalisation,” the OECD says. “The challenge is to ensure that the adjustment process involved in matching available workers with new job openings works as smoothly as possible.”

Specifically, the OECD urges governments to:

* [b]Ensure that working is more rewarding financially than living off welfare, if necessary through in-work benefits that supplement wages.[/b]
* Provide adequate income support in the event of job loss and help job-seekers find new jobs quickly by providing effective counselling, training and other re-employment assistance.
* Ensure that employment services are managed effectively in order to provide as much individualised support to job-seekers as possible.
* Ensure that firms facing lay-offs give their employees sufficient advance notice, and that effective re-employment services are provided during the period of advance notice, for instance by despatching employment agency staff on-site.

More details on: http://www.oecd.org/document/10/0,2340,en_2649_34487_35046633_1_1_1_1,00.html

In the mean time, also the EEC is waking up. See e.g. http://www.euractiv.com/Article?tcmuri=tcm:29-140843-16&type=LinksDossier
While becoming aware that the labour market is much too rigid, the EEC still has to admit that the high tax on labour effectively creates unemployment. The EEC as an economic entity should admit that its "overhead" costs are too high and taking away its economic potential. The keyword is macro-economic efficiency at all levels. Just like a budget deficit norm of 3 % was put forward, it didn't help much because no government spending limit was imposed. The EEC would do good to put forward e.g. a 33% limit on the size of the government sector of its members. This implies rules of corporate governance and transparency as well.
And while we believe that Innovation helps, it will only really help if it pays off for entrepreneurs and their employees to turn innovation into economic value through hard work.