KEY TO EUROPE’S FUTURE COMPETITIVENESS
- Written by Kurt Bock, Chairman of the ERT Competitiveness Working Group & Chairman of the Board of Executive Directors, BASF SE
Current times are challenging both globally and in Europe. Anti-globalisation and protectionism are on the rise in many countries and in various ways; people are increasingly concerned about whether Europe offers prosperity and a fair participation for its citizens. The vote in the United Kingdom to leave the EU as well as the negative outcome of the referendum in Italy are symptoms of these developments.
However, we must not forget the benefits of a strong Europe. The European Union is a unique achievement to bring Europe together and has overall increased the prosperity of its citizens. One of the world’s largest and most integrated markets with around 500 million inhabitants generates a GDP of more than EUR 14 trillion.
But past achievements are no guarantee for future successes. Europe needs to adapt quickly to new developments. New competition is on the rise, global growth expectations are decreasing and growth is taking place mainly outside Europe. Economic competitiveness, i.e. a thriving industrial sector, is a major foundation of success and Europe must offer an attractive environment for investment, growth and innovation. This year’s report shows once again that Europe has work to do as summarised in the Key Messages.
Innovation has been a strong pillar of Europe’s economic success in the past. With emerging markets increasing their efforts on innovation, Europe needs to ensure that it speeds up. Fostering innovation requires support from different angles.
Digitisation is another growth driver. It increases productivity and economic performance, promotes education in new skills and creates new jobs. However, regulatory intervention has shifted market dynamics, resulting in an underinvestment in digital infrastructure in Europe. Some initial movements have been started, but further improvement of the framework is essential in realising a Digital Single Market strategy.
Europe is still the largest exporter of goods and services. A significant proportion of European jobs depends on our success on global markets. It is with great concern that we note a steady increase of potentially trade restrictive measures and a backwards trend in the integration of the European Single Market.
The 2016 edition of the ERT Benchmarking Report presents a comprehensive grading of Europe in the global context in terms of competitiveness, trade and investment, innovation, digital economy, energy and climate, employment and skills. It also provides some encouraging examples of ‘best practices’ for innovation.