European Growth and Jobs Monitor: Indicators for Success in the Knowledge Economy

Allianz SE and the Lisbon Council, a Brussels-based think tank, have released the “European Growth and Jobs Monitor”, a new, leading-edge ranking on indicators for success in the knowledge economy. The report shows that the nine largest EU economies are reaping the benefits of reforms. Productivity in some European countries meanwhile is rising faster than in the U.S. Sweden ranks No. 1; Belgium most improved, but Germany also scores well; France and Italy lag behind.

The study looks at how the EU-15 as a whole and the nine largest economies individually are performing in reaching the goals originally set out in the so-called Lisbon Agenda. In addition, the study introduces new, highly pertinent measures to track economic success in the knowledge age, such as the percentage of highly skilled labour, sustainability of public finances and future-oriented investment.

Europe has finally turned the corner after years of disappointing performance. The “European Growth and Jobs Monitor” clearly indicates that the reform efforts of past years are starting to pay off. But this is not a time for complacency. Operating in a competitive global environment – and facing the demographic challenge of an ageing and declining population – Europe must stick with the Lisbon process as a synonym for keeping up the reform momentum. Reform policies of the past years are clearly yielding an economic and social dividend.

Key findings

1)The EU-15 is now 90% on track to meet the Lisbon Agenda goals by 2010 – up from 73% at the end of 2005. All countries have improved their performance since last year.

2) In the country breakdown Sweden comes out best, topping the rankings for economic growth, labour productivity, employment rate and public finances.

3) Three countries – Sweden, Belgium and the Netherlands – are well on their way to achieving high growth and employment, while three others – United Kingdom, Spain and Germany – are almost on track to achieve the ambitious Lisbon targets.

4) Italy too is moving in the right direction but still has a low ranking despite some improvement in growth and an impressive record on job creation. Italy scores particularly poorly in skilled labour, labour productivity and sustainability of public finances.

5) France comes in second to last, a drop of two rankings in the course of one year, due to sluggish growth and weak productivity improvement.

6) Productivity is rising faster in a number of European countries than in the United States. Sweden, Belgium, Germany and the United Kingdom recorded faster rising productivity rates than the U.S. in 2006.

7) With nearly 40% of its workforce boasting a tertiary education, Belgium is uniquely positioned to meet the challenges of the knowledge age.

8 )After years of decline, investment in machinery and equipment in relation to GDP – a key indicator of technical progress and innovation potential – is up across Europe, with Spain leading the way.


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