![Page 1: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/1.jpg)
EU Competitiveness (1)
![Page 2: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/2.jpg)
The concept of competitiveness
• Controversies surrounding the concept of regional, national or supranational economies
• Microeconomic definition of competitiveness of enterprises– Reduction of costs– Higher quality– Higher market share– Capacity to improve profits– Efficiency– POSITION RELATIVE TO COMPETITORS
![Page 3: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/3.jpg)
The concept of competitiveness
• But: – Trade is NOT a zero sum game!!!
• At macroeconomic level we look at the presence of determinants to growth, and ability to increase welfare
![Page 4: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/4.jpg)
Definition
• D’Andrea Tyson (1984)
‘A nation’s competitiveness is the degree to which it can, under free and fair market conditions, produce goods and services that meet the test of international markets while simultaneously expanding the real income of its citizens’.
![Page 5: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/5.jpg)
Definition
• D’Andrea Tyson (1984)
– Competitiveness at national level based on superior productivity performance
– Competitiveness associated with higher standards of living, employment opportunities
– Competitiveness NOT about maintaining trade equilibrium!
![Page 6: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/6.jpg)
The 1990s
![Page 7: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/7.jpg)
White Paper 1993
• White Paper on growth, competitiveness, and employment
• Part A: The challenges and ways forward into the 21st century.
• Why this paper?• © European Communities, 1995-2000
![Page 8: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/8.jpg)
Why this White Paper ?
• “The one and only reason is unemployment.”
• “The difficult thing is knowing how to tackle it.”
![Page 9: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/9.jpg)
![Page 10: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/10.jpg)
Unemployment
• Unemployment in the EU averaged 10.6% of the labour force in 1997
• = twice the rate in the US (4.9%) and three times the rate in Japan (3.4%).
• the rate in the Union had shown an upward trend since the mid-1970s.
![Page 11: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/11.jpg)
Latest unemployment statistics
Source: Eurostat, 2009
![Page 12: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/12.jpg)
Source: Eurostat, 2009
![Page 13: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/13.jpg)
The employment rate
• The employment rate in the Union in 1997 was 60.5%• much the same as in the 15 years before • rate in the US was 74% and in Japan, 74.6%, both
higher than at any time in the past
![Page 14: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/14.jpg)
Latest employment rates
Source: Eurostat, 2009
![Page 15: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/15.jpg)
Source: Eurostat, 2009
![Page 16: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/16.jpg)
No miracle cure available!
Neither:
– protectionism– turning on the tap of government spending – a generalized reduction in working hours
and job-sharing– a drastic cut in wages and a pruning of
social protection
![Page 17: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/17.jpg)
Over decades
• rate of growth had shrunk from around 4% to around 2.5% a year
• unemployment had been steadily rising
• investment ratio had fallen by five percentage points
![Page 18: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/18.jpg)
Over decades
• EU competitive position in relation to the US and Japan had worsened as regards:– employment – shares of export markets – R&D and innovation and its
incorporation into new goods – the development of new products.
![Page 19: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/19.jpg)
Over recent periods
• While it is true that Europe has changed, the world has changed too.
![Page 20: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/20.jpg)
Europe’s problems
• the high level of unemployment• Europe's poor record for job creation,• investment, • trade growth,• product development, • labour costs, and• less tangible measures of
competitiveness.
![Page 21: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/21.jpg)
Causes
• product and labour market fragmentation,
• disruption caused by the necessary restructuring of mature industries,
• *low competitiveness (relative to low-wage regions) in many sectors,
• *the relatively low levels of innovation and entrepreneurial activity.
![Page 22: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/22.jpg)
Advantages
• Europe's educated population,• relative political and social stability,• cultural and creative resources and,• well-developed physical infra-structure,• should provide an effective platform for
competitiveness and growth.
![Page 23: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/23.jpg)
Ways forward
• A more competitive economy – Drawing maximum benefit from the
single market – The trans-European infrastructure – Stepping up the research effort and
cooperation
![Page 24: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/24.jpg)
2000
![Page 25: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/25.jpg)
Why the Lisbon Agenda initiative?
![Page 26: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/26.jpg)
Labour productivity GDP per capitaSource: European Commission
Average annual growth 1994-99
0,00
0,50
1,00
1,50
2,00
2,50
3,00
3,50
4,00
US
%
EU -15 EU -15 US
EU growth still lagging behind US
![Page 27: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/27.jpg)
The Lisbon Agenda
The Lisbon European Council set an ambitious goal -
to become
the world’s most competitive and dynamic knowledge-based economy by
2010
![Page 28: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/28.jpg)
Recent EU growth in comparative terms
Source: Eurostat, 2009
![Page 29: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/29.jpg)
Sapir, 2003 (c)
The single market vs. The Lisbon Agenda
![Page 30: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/30.jpg)
EU Benchmarking
![Page 31: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/31.jpg)
’Improving the competitiveness of European industry depends critically on identifying and promoting examples of best practice from around the globe. We believe that benchmarking offers a highly valuable and effective means of doing this.'
Commissioner in charge of industry
![Page 32: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/32.jpg)
What is Benchmarking?
Benchmarking has been defined as a continuous, systematic process for comparing performances of: – organisations, – functions,– processes or economies, – policies or sectors of business
![Page 33: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/33.jpg)
What is Benchmarking?
• against the "best in the world", • aiming not only to match those performance
levels, but to exceed them.
![Page 34: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/34.jpg)
What is Benchmarking?
Benchmarking allows us to:
• analyse and improve key business processes, • eliminate waste, • improve performance, profitability and
market share.
![Page 35: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/35.jpg)
What is Benchmarking?
The basic idea:
• Assess your own performance (using performance indicators);
• Identify related best performances world-wide;
• Compare with your own practice;
![Page 36: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/36.jpg)
What is Benchmarking?
• Make improvement plans to address the gap;
• Implement the plans; and • Monitor and evaluate the results.
![Page 37: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/37.jpg)
What is Benchmarking?
In other words:
• benchmarking is a learning process to identify and implement best practice.
![Page 38: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/38.jpg)
Benchmarking levels
• With the ultimate objective of increasing European competitiveness, the Commission has been drawing attention to benchmarking as a tool for addressing the underlying reasons, which impede the enhancement of Europe's performance levels.
![Page 39: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/39.jpg)
Benchmarking levels
• Three "levels" of application have been identified:– Company Benchmarking, – Benchmarking of industrial sectors, – Benchmarking of framework conditions or
systems.
![Page 40: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/40.jpg)
Benchmarking levels
• It is industry driven and competitiveness oriented, i.e. it serves to improve the competitive performance of enterprises, of industrial sectors, as well as the environment in which enterprises operate.
![Page 41: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/41.jpg)
Company benchmarking
• A quality tool directed at continuous improvement of management processes in companies.
• At this level of application, benchmarking is the prime responsibility of firms themselves.
![Page 42: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/42.jpg)
Benchmarking of industrial sectors
• A natural extension of company benchmarking in that many of the same principles can be applied to that set of enterprises that make up an industry and for which similar types of best management practices are fundamental for competitiveness.
![Page 43: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/43.jpg)
Benchmarking of framework conditions
• Applies to key elements of conditions which affect the attractiveness of the regions, the Member States and the EU as places to do business, and which affect the business environment in which companies have to operate.
![Page 44: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/44.jpg)
Framework conditions
• They relate to the environment in which people work and enterprises operate such as:– factor costs, – telecommunications and transport
structures,– labour market regulations and costs, – innovation and R&D, – i.e. the environment, which directly affects
industrial competitiveness.
![Page 45: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/45.jpg)
Framework conditions
• Benchmarking these framework conditions enables the efficiency of public policies to be evaluated and to identify the steps required to improve them.
![Page 46: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/46.jpg)
EU Initiatives
• In order to increase the contribution of research and innovation policies to sustainable growth and creation of employment, benchmarking should cover the areas of
•human capital,•education, •science, •technology, and •innovation.
![Page 47: EU Competitiveness (1). The concept of competitiveness Controversies surrounding the concept of regional, national or supranational economies Microeconomic](https://reader035.vdocuments.net/reader035/viewer/2022062619/5515c4d1550346a3758b4806/html5/thumbnails/47.jpg)
BBC, Panorama: The Battle for Europe