Recent Changes in Europe’s Competitive Landscape. How the Sources of Demand and Supply Are Shaping Up

Bart van Ark (), Vivian Chen, Bert Colijn1, Kirsten Jaeger and Wim Overmeer

No 485, European Economy - Economic Papers 2008 - 2015 from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: This paper revisits the issue of Europe’s growth slowdown in the light of the developments of the first decade of the 21st century, including the devastating effects from the 2008/09 recession and the subsequent economic and financial crisis on Europe’s growth performance. From a supply side perspective, using a growth accounting approach, there are virtually no signs of even the beginnings of a reversal in the slowing growth trend, which is primarily driven by a weak productivity performance in most European countries. From a demand perspective, using a global value chain-type analysis, it turns out that activities contributing directly or indirectly to production for the global market, account for roughly a quarter of employment as well as a quarter of labour productivity growth in Europe. Projecting growth out to 2025, using growth accounting projections, productivity remains the critical factor for a recovery of Europe’s future growth performance. Large differences between individual European countries have emerged. The paper sketches four possible growth scenarios which describe the possible “states” Europe may find itself in 10-12 years’ time, using a strengthening of supply-side capabilities, including productivity and innovation, and global demand for goods and services at the key dimensions defining the future states of the union. These scenarios provide the setting for a discussion of policy choices for Europe’s growth and competitiveness agenda.

JEL-codes: J24 O11 O47 O52 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2013-04
New Economics Papers: this item is included in nep-eec and nep-eff
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:euf:ecopap:0485

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