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EU Competitiveness (2). Where does the EU stand now? Analysis of outcomes of Lisbon objectives : the Sapir ReportSapir Report Mid-Term Review of Lisbon.

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Presentation on theme: "EU Competitiveness (2). Where does the EU stand now? Analysis of outcomes of Lisbon objectives : the Sapir ReportSapir Report Mid-Term Review of Lisbon."— Presentation transcript:

1 EU Competitiveness (2)

2 Where does the EU stand now? Analysis of outcomes of Lisbon objectives : the Sapir ReportSapir Report Mid-Term Review of Lisbon Agenda: Facing the Challenge Facing the Challenge (Report from the High Level Group chaired by Wim Kok)

3 The Sapir report: findings

4 GDP and Productivity in EU (US=100)



7 Source: European Commission, New Cronos database.



10 Copyright © Sapir, 2003

11 2005

12 The Lisbon Agenda Revived Focus on two main areas: –Productivity –Employment Make objectives of social cohesion and environmental protection achievable - The latter reinforce growth and employment

13 The Renewed Lisbon Action Plan Aims: –EU as a more attractive place to invest and work –Promoting knowledge and innovation for growth –Creating more and better jobs

14 EU as a more attractive place to invest and work Extend and deepen the internal market Improve European and national regulation Ensuring open and competitive markets inside and outside Europe Expand and improve European Infrastructure

15 Knowledge and innovation for growth Increase and improve investment in Research and Development Facilitate innovation, the uptake of ICT and the sustainable use of resources Contribute to a strong European industrial base

16 Creating more and better jobs Attract more people into employment and modernise social protection systems Improve the adaptability of workers and enterprises and the flexibility of labour markets Investing more in human capital through better education and skills

17 The Competitiveness and Innovation Framework Programme (CIFP) Brings together support programmes towards: –Higher EU productivity –Innovation capacity –Sustainable growth –Environmental concerns

18 The crucial areas ICT Policy support programme (eEurope) Entrepreneurship and Innovation (especially SME geared) The Intelligent Energy – Europe Programme (energy/environment and sustainable development)

19 eBusiness Watch (c) Geographic Differences in e-Business (for selected countries, based on 10 sectors) Based on data in % of firms (thus emphasizing small companies). The index aggregates 16 component indicators

20 eBusiness Watch (c) Perceived ICT impact on the business

21 eBusiness Watch (c) Read: "Firms representing …% of employment in the sectors surveyed expect that ICT will have a high / medium impact on management / accounting / … in the future." Base: EU-10, 10 sectors. N = Where ICT will have an impact in the future?

22 EU R&TD Policy (supporting the Lisbon Agenda)

23 Contents Industrial Policy and Components Science and Technology Policy Rationale Research and Technological Development Policy in the EU Innovation Policy Enterprise Policy

24 EU Industrial Policy

25 Industrial Policy M. Bangemann (1994): –Industrial Policy should promote adaptation to industrial change in an open and competitive market Instruments: –Subsidies –Tax breaks –Protection from foreign competition Specific versus general industrial policy towards the competitive function of the market Industrial agglomeration and support for R&D

26 Industrial Policy The analysis of world trends and of Europes position highlights the need to: –adapt its industrial policy –spread the enterprise culture –encourage risk-taking –promote the emergence of innovative companies able and willing to conquer the world market.

27 New forms of competition require: the mastery of technologies, access to global markets, speed of action, innovation, and intangible investment.

28 EU firms implications The ambition of European firms should be: to improve their competitiveness on all the World's markets, and to be present in the leading industrial and service sectors.

29 Resulting priorities rapid adaptation, active cooperation, and a sharing of responsibility between the EU's different economic, social and political players.


31 Economic rationale for R&D Policy Arrow (1962): –Problems inducing market failure for invention processes Uncertainty Indivisibility Inappropriability

32 Science and Technology Policy The USA, Japan and the EU have realised that an effective research and technological development (R&TD) policy is crucial in order to build up firms competitive potential. Compared with its leading rivals Europe is at a disadvantage on three fronts: –Lower resources and resource growth –A fragmented, uncoordinated policy –Less efficient take-up of research results

33 An EU R&TD Policy 1974 –EU Council decides on a common policy in the field of science and technology Policy scope: –Coordinate the relevant policies of member states –Implement research programmes and projects of common interest

34 Policy Objectives 1977: –Securing long term supply of resources –Promoting internationally competitive economic development –Improving living and working conditions –Promotion of environment and nature

35 Focus and instruments EC support criteria: –Cost too high for single nation –EC program good chance to compete internationally –Cases with real potential (e.g. new energy sources) –Need for standardization of information systems Since 1984 –Main policy instrument: The Framework Programme (since January 2007: FP7)

36 The European Research Area 2000 – priorities: –Networks and centres of excellence –Strengthening SME technologies –Improving research infrastructure (electronic networking) –Human resource development –Science and citizens

37 Research and Innovation Research policy focus: –Developing new knowledge –Application of new knowledge –Framework conditions for research Innovation policy focus: –Transforming knowledge into economic value and commercial success

38 European Innovation Policy Lisbon and knowledge and innovation for growth 2002 Barcelona European Council goal: – to increase EU research investment from 1.9% of GDP to 3% of GDP by 2010 –Increased share of private funding for R&D, from 55% to 2/3

39 Requirements for Member States Reform and strengthen public research and innovation systems Help develop supportive financial markets Create attractive education, training and career conditions

40 Commission Action focus 2005 –Step up dialogue with stakeholders to identify regulatory barriers to research and innovation –Adopt a more research and innovation-friendly State aid regime –Support actions on improving the IPR system, and its effective use

41 Commission Action focus... –Support, monitor and further develop actions under the research human resources strategy –Promote the use of public procurement to stimulate research and innovation –Provide guidance to promote an optimal use of R&D tax incentives

42 EU Patent System

43 Patents in Europe For an enterprise operating on an open market, intellectual property like: patents, European Patent OfficeEuropean Patent Office trade marks and licences

44 Patents in Europe are tools for: protecting and capitalising on the results of its research and creativity negotiating favourable terms for technological cooperation and, possibly, even dominating the market.

45 Inefficiencies The imbalance between the US and Europe in terms of the number of patents and volume of royalties is growing particularly in research-intensive sectors, notably –information technology, –pharmaceuticals, –biotechnology.

46 Inefficiencies American SMEs and universities benefit from cheap and swift patent facilities. In Europe, the high cost and complexity of the procedures for obtaining effective protection throughout the single market scare many SMEs and universities away from taking this course.


48 View of EUs progress Science, Technology and Innovation shows that R&D intensity (R&D expenditure as % of GDP) in Europe has stagnated since the mid-nineties, while major competitors such as Japan, China or South Korea have been able to increase substantially their R&D effort, shaping a world where knowledge is more evenly distributed than ever before. Moreover, the R&D investment deficit against the US has remained constant over recent years. In particular, the low level of business R&D in the EU remains worrying. Source: The European Commission (Key Figures), 2007

49 Reasons of EU lower business intensity of R&TD EU manufacturing and most services more research-intensive Business R&D intensity (business R&D expenditure as % of GDP): 1.13 % in 1995 vs % in Issues: –Evolution towards service economy growing weight for low R&D intensity services sectors. –R&D intensity predominantly determined by high- tech and medium-high-tech industries; –US benchmark about 20 % higher (in EU it would imply a business research intensity of 1.27 % of GDP instead of current 1.17 %)

50 R&D intensity in comparative terms

51 Bibliography Sapir et al, An Agenda for a Growing EuropeAn Agenda for a Growing Europe Guellec, D. and B. van Pottelsberghe de la Potterie, The Economics of the European Patent System. Oxford: OUP. Competitiveness and Innovation Framework ProgrammeCompetitiveness and Innovation Framework Programme Key figures on Science, Technology and InnovationKey figures on Science, Technology and Innovation

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