This research proposal takes as its starting points: (a) the long standstill in poverty reduction, especially for people of working age, (b) the complementarity between employment, economic growth and social inclusion that is focal in the EU 2020 strategy, and, (c) the emergence of socially innovative policies and actions in the margins of the European welfare states. It aims at the evaluation of the Lisbon decade in terms of policies and actions against poverty at European, national and sub-national level and at improving the understanding of the interrelationships between employment, social protection and social inclusion and between institutionalised macro level social policies and innovative local action. The proposal views sustainable growth strategies, effective employment policies and adequate social designs as the drivers of every strategy to reduce and eliminate poverty and social exclusion. It considers local socially innovative practices as laboratories to complement and modify these macro-level policies. The quantitative analysis of poverty trends in the past, the adequacy of existing policies and the implications of alternative scenarios for employment and tax-benefit-services schemes to meet the 2020 poverty targets will therefore be complemented with in-depth studies of selected cases of local social policies. The research will develop new tools for monitoring poverty, social policy and social innovative practices. For the first time reference budgets will be computed for several member states. The research consortium together with the support from well-known associates and two outstanding Advisory Boards, involving academics, policy makers and civil society organisations and the broad dissemination plan, will allow the highly experienced multidisciplinary research team to deliver important new answers to questions of great importance to European societies.