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

Author (Corporate)
Series Title
Series Details No.485, April 2013
Publication Date April 2013
ISBN 978-92-79-28567-7
ISSN 1725-3187
EC KC-AI-13-485-EN-N
Content Type ,

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.

Source Link Link to Main Source http://ec.europa.eu/economy_finance/publications/economic_paper/2013/ecp485_en.htm
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