Importance of Diffusion.- Globalization, Telecommunications and Diffusion.- Unemploy¤ment and Innovation in Europe: EU Labor ….- Labor Costs, Unemployment and Innovation: Labor Cost Pressure and¤ Unemployment.- Factors Underlying High Labor Costs … Incentives.- Firm Size, Productivity and Labor Cos¤ts.- Wage Pressure, Innovation, FDI and Unemployment.- Conclusions and Policy …