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02 May-June 2011 Europe: Leading or Lagging? NEW EUROPE
Special Edition
DIRECTOR
NEWEUROPE
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any form by any means, electronic or otherwise, without the permission of New Europe’s publisher. ISSN number: 1106-8299
NEW EUROPE Europe: Leading or Lagging? May - June 2011 03
Special Edition
COMMENT
“ My mandate is clear: to
budget consolidation and
the stability of the financial pave the way for sustain- contribute to the modernisa-
markets should top the to tion and reinforcement of the
do list for Presidents Van able growth towards and
European industrial base
Rompuy and Barroso ” beyond 2020
” ”
“ The answer is that inno- “ We must urgently make “ The EU can achieve its
vation in Europe is not only the decision to deliver a Eu- dream of a low carbon fu-
a question of budget and of ropean digital single mar- ture without jeopardizing
spending, but of setting the ket based on the founding the economy and jobs in
principles of Jacques the process
right regulatory framework.
” Delor’s 1992 vision
” ”
European Business:
Fast Forward into Europe lagging Entrepreneurship and EU and GCC ahead
Europe’s Future 14 behind? 15 SMEs: from declara- 16 of common chal- 17
by Jan Mühlfeit Mark Spelman tion to implementation lenges and opportunities
Chairman of Microsoft
Europe Global Head of Strategy
by Zsolt Becsey by Rodi Kratsa
- Accenture Minister of State for Tsagaropoulou
Foreign Economic
Vice President of the
Relations, Ministry for
European Parliament
National Economy of
and member of the
Hungary
“ The long-term prosperity “ Asian countries have no
Economic and Monetary
“ Due to the economic crisis Affairs Committee
of Europe’s next generation financial drag, so Europe more than 3.5 million jobs in “ This could be the beginning
needs to become more SMEs have been lost, which fur- of a new chapter between the
is dependent on her ability pro-active, we need to look ther underlines the specific need
European Union and its
to remain competitive ” at the demand for exports, to streamline and consolidate
for innovation
”
SMEs policy at European level
”
Mediterranean partners
”
The leaders of Cooperation is more EU-Asia: solutions for Days of race: Tele-
tomorrow 17 important than ever 18 sustainable transport 19 porting business risk 21
by Dipak C. by Mikael by Matthias by Dr Greg
Jain Hagstrom Ruete Austin
Chairman, Executive
Dean of INSEAD Director General for Vice President of
Council, AmCham EU
Mobility and Transport, Program Development
President EMEA and
European Commission and Rapid Response,
Asia Pacific, SAS
EastWest Institute
Institute
“ It is clear the world is “ We need to continue invest- “ In a changing world, Eu- “ As the campaigns of the
ing in the transatlantic relation- Iranian Cyber Army and
rope and Asia face similar Anonymous show, this com-
moving away from Free ship, keeping the dialogue open challenges, not only to pre- bination of rage and em-
Market Capitalism to Sus- and harmonising our rules of the serve the status quo, but to powering digital
game as we leverage the inno- improve the situation of our connectivity is a major
tainable Capitalism
” vative use of technologies
”
citizens
”
source of risk for global
business
”
Index May-June 2011
05
“ Transatlantic markets are “ So, how can we get out “ The transatlantic market-
the laboratory of globaliza- of this stalemate? I think place is the largest and
tion.Together we face issues that support from industry is most significant bilateral
that neither of us faces with trading relationship in the
indispensable
others
” ” world
”
Leading or Lagging?
New Policy Paradigms Single Market Act will Europe needs more
for a New World 28 provide a welcome 29 business -education 30
by Dominique boost to employment partnerships
Strauss-Kahn by Annemarie by Caroline
Managing Director of the Muntz Jenner
International Monetary President of Eurociett,
Fund. CEO, Junior
representing the private Achievement-Young
employment sector in Enterprise Europe
Europe
“ One principal policy failure in
the run-up to the crisis was a
“ Countries across Europe “ Entrepreneurship and
need to raise their labour mar- financial literacy are two of
lack of imagination: we failed to ket participation rate if they are
appreciate just how intricate the the most important soft
to meet the EU’s 2020 75% skills needed in the Eu-
global economic and financial
web had become
”
employment target
” rope’s labour market
”
Rudi Thomaes
CEO, Federation of
Enterprises in Belgium
More than
35% of the
managers point at the
lack of labour mobility
in Europe and 28%
plead for fast progress
in mutual recognition of
professional
qualifications
A woman works on an iPad under a projected clouded sky at the CeBIT Fair in Hanover, Germany, 28 February 2011. |EPA/JOCHEN LUEBKE
listic rules in some member states that ment figures, we face today more and
By Rudi Thomaes
render early quitting the labour market more shortages in a large range of pro- VERBATIM
In a world where 85% of the economic more attractive than staying. Such rules, fessions. More than 35% of the mana-
growth will be realized outside the Eu- combined with the limited influx of new gers point at the lack of labour mobility - José Barroso
ropean Union, it’s obvious we should re- STEM-skills create unhealthy tensions in Europe and 28% plead for fast pro- President of the European
flect on our stakes and potential with in the labour market. gress in mutual recognition of profes- Commission
respect to the positioning of the EU in The business community should sional qualifications. Also a smart
tomorrow’s world economy. We know push harder on these points and repli- immigration policy to attract foreign ta-
that our political position remains han- cate, together with the governments, lent is back on the agenda. It is clear that
dicaped by the persistent inability of some best practices to boost the availa- this skill issue will be critical for both,
European political stars to speak with bility of STEM- and other skills and to growth and moderation of inflation in
one voice (this has often to do with local increase the employment level with the the Union.
electoral agendas, rather than with fun- 55+ age category. Finally, business executives consider
damental differences in opinion on fo- The extremely interesting study car- that we should look more intensively at The answer to our current
reign affairs). But the Union has ried out by Accenture revealed for me exporting services to emerging markets.
foremost economic and monetary foun- personally four additional striking They refer to healthcare, education and problems lies with the
dations. Therefore our Federation has points. First a cry for a European long finance. I am personally convinced that
requested Accenture to carry out a sur- term industrial policy. This is the point this is indeed key for our future for four consumer, but without
vey and focus on future growth perspec- of greatest disappointment with the C- reasons:
tives with over 400 C-level managers in level managers interviewed. I assume first, these domains are “mission cri-
confidence there will be no
the context of the European Business
Summit which takes place on 18th and
that this reaction is fuelled by the im-
pressive policy-declarations observed on
tical” for the emerging countries them-
selves and very large public spending
growth. Internally, that
19th May in Brussels. other continents, China in particular. will take place in this area; means deepening the
When we look at the results of the Second, and rather new, a call for second, these are domains in which
survey, we tend to focus our attention on well coordinated economic diplomacy, Europe has an offer which is second to internal market, externally
new signals from the corporate world. I for instance to attract foreign inve- none;
will highlight a few of them. However, stment and foreign talent. I'm really third, there exists of course a strong we need to promote trade
let’s first look at repeated claims with convinced this is the way ahead to do link between these services and Euro-
high scores. They should rank first in more with less in building bridges with pean advanced products and software
our conclusions for policy action. emerging markets. For example, why not and, last but not least, a breakthrough in
In my view the call for simplifica- concluding at European level agree- this area could pave the way for building
tion, the lack of STEM-skills (Science, ments with China on pilot projects in strong top-level human bridges between
Technology, Engineering and Mathe- European and Chinese cities and/or re- the EU and those emerging markets.
matics) and superfast broadband-infra- gions for smart grids or on standardisa- I am convinced that a focus on “ex-
structure seem to remain top priorities. tion of plugs and charging units for porting” these services throughout this
None of them are easy, but none of them electric cars. decennium will later prove to be a great
are mission impossible either. Take the A third area of great concern is the asset in our global positioning. I should
administrative burden and pitfalls. Look need to widen the labour pool. In an not conclude without emphasizing that
at the way projects are blocked by admi- earlier report, published by the Federa- for Europe’s managers the speeding up
nistrative procedures. tion of Enterprises in Belgium and In- of the budget consolidation and the sta-
They are simply a nightmare for in- sead, we flagged the advent of post-crisis bility of the financial markets should top
vestors, even when they are very careful. shortages on the labour market. In the the to do list for Presidents Van Rom-
Other employers are faced with surrea- midst of the current high unemploy- puy and Barroso.
NEW EUROPE Europe: Leading or Lagging? May - June 2011 07
Special Edition
Jürgen R. Thumann
President of BUSI-
NESSEUROPE, and
co-chair of TransAtlantic
Business Dialogue
INDUSTRY
Antonio Tajani
European
Commissioner for
Industry and
Entrepreneurship
Europe remains a
great industrial
power. We are the world's
leading exporter of goods
such as chemicals,
machine tools or
automobiles. European
industry is also very active
in some sectors with high
potential for development
that are related to "green"
economy. Europe's biggest wind energy park, Alto Minho I, in the northern region of Viana do Castelo, Portugal. The 120 turbines divided between five sub-stations produce 530 gigawatts annually or
one per cent of Portugal's energy. |EPA/ESTELA SILVA
By Antonio Tajani the significant growth of productivity and prove energy efficiency, promote better this way, we will ensure that European in-
the increasing advances made on an inter- uses of natural resources, to reduce carbon dustry remains at the forefront of innova-
It is a great pleasure and an honour to be national scale. Although jobs were lost, emissions – these are goals that must be tion. Innovation, ultimately, is the largest
given the opportunity to participate in the many others were created in sectors di- fully integrated into modern industrial industry that contributes to improving our
European Business Summit. It has be- rectly related to industry such as business policy. quality of life. We are moving towards a
come an important annual meeting for services. Indeed, we must take into considera- world where products are becoming more
the business community and policy ma- Europe remains a great industrial tion the specificities of particular sectors sophisticated and are better able to meet our
kers on a European level. The future of power. We are the world's leading expor- and the problems that Small and Medium needs.
European industry in the global economy ter of goods such as chemicals, machine Sized Enterprises (SMEs) are facing. The new European industrial policy
– is an issue that is particularly close to tools or automobiles. European industry With a smart and stable regulatory fra- is based on both greater integration and
my heart. As Commissioner for Enter- is also very active in some sectors with mework we can develop our industrial coherence at EU level and closer coope-
prise and Industry, my mandate is clear: high potential for development that are base so that it is both more sensitive to ration with Member States and between
to contribute to the modernisation and related to "green" economy. environmental and health and supports Member States themselves. We started
reinforcement of the European industrial the competitiveness of the industry, beca- monitoring performance and competiti-
base. The challenges for European industry use now it is of competitive advantage to veness policies at national level last year
There are major challenges ahead for conquer these new markets related to and exchanged good practices with
The strength of European industry European industry. While nobody unde- "green economy". Member States, for example in the field
I often hear negative discussions on restimates the significance of the emer- of access to credit SMEs. European in-
how European industry only plays a ging global powers of China, India or Innovation dustry still has much to offer and we will
minor role on the global scale, surpassed Brazil, we must have confidence in our Large emerging markets have establi- provide adequate support to enable it to
by emerging economies that are stronger. own enterprises, both large and small, and shed very ambitious strategies in these successfully face the challenges of globa-
I completely reject the myth of the de-in- their ability to innovate and adapt to the areas. We must not be left behind. For this lization.
dustrialisation of Europe. In fact, indu- advantages that internationalisation poses. reason, the communication on industrial
strial production showed strong growth in The policy makers at European level policy put in place the elements of a po- Trade
recent years, until the crisis of 2008/2009. intend to create the best environment licy for industrial innovation, which is The success of industry depends on its
I firmly believe that European indu- possible for industrial development in Eu- complementary to the strategy of research capacity to benefit from globalisation. Th-
stry must use the resources it has at its di- rope. This is the ultimate goal of our flag- and innovation purpose of the initiative: erefore, we should not oppose a policy of
sposal to continue to be a leader in the ship initiative for integrated industrial "A Union for innovation." In particular, free trade, and an industrial policy of pro-
many markets for products and services, policy in the era of globalization, adopted we identified some of the technologies tectionism. In fact, trade policy can be a
and to conquer new ones. Europe can and by the Commission last October as part that are critical to the future of our indu- great tool for promoting the competitive-
must remain a place for generating jobs of the "Europe 2020" strategy. I wish to stry: key enabling technologies such as ness of our industry, provided that the
and investment in industry. Continued highlight sustainable development, inno- nanotechnology, photonics, advanced ma- agreements that we enter into with third
growth will only be possible with the sup- vation and trade as examples of areas that terials and biotechnology. countries are based on principles of reci-
port of the EU institutions. we are currently working on. The potential of these technologies re- procity. We are currently introducing a
mains largely unexploited in Europe. On "competitiveness test" on free trade agre-
The role of European industry today Sustainable development this basis, my intention is to launch an ini- ements specifically to ensure that new
European industry has changed signi- One of my aims on assuming the role tiative to promote the deployment, adoption agreements can maximize profits and mi-
ficantly over the past fifteen years, with of Commissioner for Industry was to im- and commercialization on a large scale. In nimize costs for our industry.
10 May-June 2011 Europe: Leading or Lagging? NEW EUROPE
Special Edition
INDUSTRY
We must
recognize that
every citizen is a
possible innovator and
by boosting creativity
throughout Europe we
can increase this
potential The European Commissioner for Research, Innovation and Science, Maire Geoghegan-Quinn presents the European Innovation Scoreboard 2010 at the EU Commission headquarters
in Brussels , Belgium 01 February 2011. According to the European Commission, the EU is failing to close the innovation performance gap with its main international competitors, the US
and Japan. |EPA/OLIVIER HOSLET
face. Nearly every Member State has reduced lity, especially to stimulate start-ups. Innovative a mess
the budget for innovation and research and has SMEs are in many cases far ahead of policy ma-
stricken financial incentives. The question the- kers in terms of vision. It is about time for policy
refore is: how can innovation be boosted in makers to support these smart visions. places, about empowering employees to improve why don't we know their names? We need to
times of tight budgets? Therefore, EU programmes have to become processes and about facing our societal challenges. boost a culture of excellence, risk taking, creativity
The answer is that innovation in Europe is not much more accessible to start-ups and SMEs, or Challenges such as the ageing population and our and entrepreneurship. Europe has had technolo-
only a question of budget and of spending, but of anyone else with creative ideas for that matter.The ever scarcer resources. Targeted policy by the EU gical breakthroughs and claimed academic suc-
setting the right regulatory framework.The latter best way to start focusing, to cut red tape, to reach and the Member States could stimulate busines- cess. However, the Americans were much more
entails doing away with part of the old legacy of le- out and provide service is by creating an easily ac- ses to adapt their workplace and become more prosperous by carrying these breakthroughs to the
gislation, some rules have proven to impede in- cessible 'one-stop shop', a front desk for stakehol- employee-driven, as this contributes to 75% of the market and claiming business success.We have to
novation rather than to stimulate. It means bold ders to help and direct them through the maze of success of technological innovation. merge Einstein with Steve Jobs and keep him or
choices, impelling a change in economic climate. forms and other requirements to the right sup- her on European soil.
It demands a focus on innovation throughout all port progamme and to a network of potential Merge Einstein with Steve Jobs The time has come for Europe to put serious ef-
policies: lowering thresholds to finance, incentivi- partners. Why would other continents have more visionary fort into bringing about a mindset change towards
zing start-ups and venture capital, giving entre- Innovation is not a special policy, it is a goal, a leaders on innovation and on resource efficiency innovative and curiosity-driven thinking as well
preneurship a key role in higher education, mindset, reason for all EU programmes and po- than Europe? It is time that Europe kisses itself as risk-taking, and allow for a more permissive at-
defragment, de-bureaucratize, …. and all the licies to serve innovation. This mindset implies out of its hundred-years-sleep. For far too long our titude towards failure. We must recognize that
other de-‘s. that funds under the New Common Strategic large industries stuck to the old ways. They sh- every citizen is a possible innovator and by boo-
Framework for Research and Innovation, but also ould follow the example of innovative SMEs and sting creativity throughout Europe we can incre-
the Common Agricultural Policy, the Structural spark a strategy for a complete resource overhaul ase this potential. The European Parliament
Innovation fugitives Funds and the Cohesion Fund must be aimed at before 2020. Moreover, with our creative and in- supported the focus on citizen-centred innova-
The enemies of creativity are red tape and infle- stimulating innovation. novative capacity in Europe, as well as our import tion, during the vote on May 12, making a call for
xibility. Many creative minds over the years fled Besides providing for a more innovative friendly dependency on raw materials, resource efficiency more social innovation at the workplace and pro-
from Europe and became innovation refugees in environment we must also acknowledge the fact should be the key driver and main focus of our ef- posing measures to stimulate a more risk-taking
places such as Silicon Valley. These innovators that innovation is not just about technological or forts for more innovation. Not only the future of attitude for business.
simply saw no other option, as they had been mar- product development or recovering from the eco- our industry, but our future jobs depend upon it. Dreams do not only come true on other conti-
ked losers in their different home countries in Eu- nomic crisis. It is also about more dynamic work- The European Steve Jobs and Bill Gates exist, but nents, Europe can realise its dreams.
NEW EUROPE Europe: Leading or Lagging? May - June 2011 11
Special Edition
INDUSTRY
A Digital Future
Dr Erkki Ormala
President,
DIGITALEUROPE
Without a
functioning
single market the
‘Innovation Union’
will not live up to
its potential as
investment in ideas
will not be
commercialised
European Commissioner in Charge of Digital Agenda, Neelie Kroes watches a robot reaching for a toy car after the opening of fet11, The European Future Technologies Conference and
Exhibition held under the auspices of the Hungarian EU Presidency in Budapest, 4 May 2011. | EPA/LAJOS SOOS HUNGARY OUT
By Dr Erkki Ormala TALEUROPE shares the European It is a neat coincidence that the con- web sites in the world. And, even more
Commission’s view that there is a need to clusion of the European Union’s Lisbon alarming, is the trend we see in the gro-
Europe is at a cross road. In the cli- focus EU innovation on the Grand Ch- Strategy and discussions around its suc- wth of the leading internet service com-
mate of a continuing fiscal crisis most of allenges, but we are also conscious that cessor, ‘Europe 2020’, happened when the panies in the world. It is no longer the
our energy is focused on short-term fiscal the greatest challenge of all in Europe is economic and political shape of the US which is dominating this space: Chi-
consolidation. This issue must be resol- to restore economic growth. world was being rapidly remodeled. The nese internet services providers are chal-
ved in an appropriate way to restore ma- European Union must think very care- lenging American companies with
croeconomic stability which ultimately is The ICT industry sector is one of the fully about its ambitions, its challenges hundreds of millions of customers and
a precondition for growth and prosperity most rapidly growing industries globally. and how to achieve its goals urgently. If rapid expansion into foreign markets.
in Europe. ICTs enable us to address the Grand Ch- we are committed to becoming the Among the five most valuable Internet
allenges. Yet today, as we accelerate into world’s leading knowledge economy, Eu- companies in the world after Google and
At the same time a digital revolution the digital age, Europe still has no single rope’s political leaders must actively focus Amazon are two Chinese companies,
is sweeping societies and businesses market for digital services. This lack of a on overcoming the fragmentation in di- Baidu and Tencent, with over $30 billion
across the globe. Countries which have single market will limit Europe’s growth gital industries, markets and communi- market cap well before eBay. No Euro-
been quick to respond are enjoying the opportunity unnecessarily. Creation of a ties. Failure to do so means Europe risks pean company is visible on this list.
benefits and making their way to the top digital single market by 2015 would yield losing its economic, political and cultural
of world rankings. Emerging economies a 4% point growth in the European GDP lead. It is clear that digital technology cre-
are a case in point; their impressive posi- by 2020. This corresponds to a €500 bil- ates entirely new business models, which
tive growth figures can be attributed to lion increase – translating to over €1000 Commissioner Kroes’ Digital Agenda in turn generate new jobs. Europe must
their willingness to embrace this digitally for every European citizen. for Europe is an important roadmap for seize the opportunity to create more
driven revolution. Europe too has a win- the Barosso II Commission; it reflects high-value jobs for its citizens. We are
dow of opportunity to capitalise on the Without a functioning single market and addresses many of our current chal- faced with a choice of which route we
growth potential embedded in this digi- the ‘Innovation Union’ will not live up to lenges. To deliver a successful European take to deal with current social and eco-
tally driven revolution. its potential as investment in ideas will Digital Agenda each member state has a nomic challenges. To DIGITALEU-
not be commercialised, new jobs will not role to play in recognising the benefits for ROPE the choice is clear: we must
Investing in innovation is a prerequi- be created. Europe must act decisively to its citizens and businesses, but also for ci- urgently make the decision to deliver a
site for harnessing Europe’s growth po- remove the barriers that limit our ability tizens and businesses across the EU. The European digital single market based on
tential and ensuring macro-economic to leverage the benefits of a culture of in- Digital Agenda is rightly focussed on the the founding principles of Jacques De-
stability. DIGITALEUROPE applauds novation and the European digital single completion of the digital single market, lor’s 1992 vision of a single market. The
the European Commission for its foresi- market. European citizens and business and while many EU countries agree in Digital Agenda for Europe provides the
ght in responding to this need through alike know the frustration and problems principle that this is an important ambi- roadmap and the Innovation Union is a
flaship initiatives like the Innovation of cross-border eCommerce. Less than tion many continue to reserve the right vehicle that will deliver rewards. Public
Union, a highlight of the Barroso II Pre- 10% of the eCommerce in Europe is cur- to exclude their particular interests ou- policies must support the consolidation
sidency. The Innovation Union ackno- rently cross-border. Extending business tside the digital single market. The con- of our global position and be a bold force
wledges that the creation of a competitive from one member state to another can sequences are evident. Recent data shows for change. Investment in innovation is
innovative ICT industry sector is a cor- incur €2 million additional costs for a undisputedly that Europe is losing gro- one turn-key, the other is the political
ner stone of job creation and long term company due to diverging rules and re- und rapidly. European websites are vir- will to deliver of a digital single market
economic dividends in the EU. DIGI- gulations in different member states. tually absent from the list of most visited in Europe.
12 May-June 2011 Europe: Leading or Lagging? NEW EUROPE
Special Edition
INDUSTRY
Isabelle Muller
Secretary General,
EUROPIA
French car maker Renault presents an electric engine car at the Grimaldi Forum of Monaco during the sixth 'Ever Monaco' exhibition, in Monaco, on 31 March 2011. |EPA/BRUNO BEBERT CORBIS OUT
By Isabelle Muller
Transport is among the least cost-efficient sectors to reduce
As the EU seeks to set in place an energy
roadmap to transition Europe to a low emissions and placing greater policy focus on delivering fuel
carbon future, it must be sure to safeguard
growth and mobility in the process. efficiency gains could offer a substantial and cost-effective
While the Europe 2020 Strategy and
other initiatives set ambitious targets for
contribution to CO2 reductions in the transportation sector
energy savings and emissions reduction, in
practice, the transition to a competitive,
low carbon economy will be gradual and
take several decades. and economic value and without a robust The oil industry works in close coope- A clear policy framework could enable
Europe will require a secure, reliable domestic refining industry Europe will be ration with the transport industry in de- the EU to meet its new energy and emis-
and affordable energy source to underpin more dependent on third countries. veloping new fuels for use in the sions targets. Comparative cost analysis
economic growth during this transition It is essential to maintain the econo- advanced, fuel-efficient engines of the fu- for both society and the environment sh-
phase. mic and social value of cost-effective mo- ture. In the domestic vehicle sector a ould be carried out on all new forms of
Mobility is of course vital for the EU bility during the transition and the good great deal has been done already and we energy and transportation, and we must
economy and today 90% of EU transport news is that further efficiency improve- believe that with new vehicle design, new avoid mandating specific technologies
is fuelled by oil. Even the most optimi- ments and lower carbon fuel options engines and lower carbon fuels, we can that might prevent us from leveraging
stic scenarios from the International could achieve the EU’s policy objectives also achieve fuel efficiency in Heavy Duty new innovations in the future. With the
Energy Agency predict that oil will repre- for a low carbon society. Transport is Vehicles of up to 20% in the next decade. consistent application of energy taxation
sent at least 70% of fuels for transport in among the least cost-efficient sectors to The same is true for the Aviation sector levels to all energy products and a frame-
2035. reduce emissions and placing greater po- where a reduction of 25-50% in fuel con- work for consistent and predictable CO2
Oil and oil refined products will con- licy focus on delivering fuel efficiency sumption could be achieved through more abatement across the entire economy, the
tinue, to make an important contribution gains could offer a substantial and cost- efficient aircraft design and operation, and EU can achieve its dream of a low carbon
to EU growth. They offer a secure supply effective contribution to CO2 reductions 25-75% CO2 reductions are also possible future without jeopardizing the economy
of energy that delivers affordable mobility in the transportation sector. in the Marine sector. and jobs in the process.
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14 May-June 2011 Europe: Leading or Lagging? NEW EUROPE
Special Edition
Jan Mühlfeit
Chairman,
Microsoft Europe
A guest tries out the new Microsoft operating system Windows Phone 7 on a handset during the launch in Singapore 12 October 2010 |ANA/EPA/STEPHEN MORRISON
By Jan Mühlfeit
Prague - What will life be like for Eu-
The breakneck speed at which technology changes means no
ropeans in 2020? Faster, I hope. This
may come as unwelcome news to those
one can truly know how great its social impact will be in 2020
who blame technological progress for
the already frantic pace of their lives.
But look at what technology is achie- Months and years spent undergoing That’s why we are fully supportive of times in his or her life. Digital skills will
ving now and think about what all this research or radiotherapy could soon be the Commission’s Innovation Union be the reading and writing for 21st cen-
speed could mean for the way human compressed into a matter of weeks or and its aspiration to make Europe an tury: without them Europe’s workers
beings spend their time in future. days. Just think what both these advan- exciting and easy place to break research will be the illiterates of the global labor
Consider Europe’s research commu- ces could mean not only for medical frontiers and produce new products. market. That’s why it’s so important
nity. When Marie Curie began her pio- progress, but also for the quality of life There is much to be praised in the that Europe takes the vital steps to in-
neering work into radium-isolation she for cancer sufferers and their families. Commission blueprint, which builds on vest in its future even at a time of crisis.
did not know what she was looking for, The breakneck speed at which tech- the Europe 2020 economic strategy and Even when budgets are tight there is
or that it would take 4 backbreaking nology changes means no one can truly calls for a multi-pronged approach to a role for us all to play. Governments
years of stirring pitchblende to yield just know how great its social impact will be creating a single market for innovation and policymakers must maintain appro-
enough radium to cover the tip of a te- in 2020. by 2020. But progress in this area must priate levels of investment if Europe’s
aspoon. Marie’s vision and diligence But I do know that the pace at be built on the free and flowing exch- workforce is to get the education and
eventually earned her two Nobel prizes which it metamorphoses means that re- ange of ideas that can only come from ICT skills it so badly needs. The private
and paved the way for the radiotherapy gulation must leave room for the indu- an ongoing conversation between poli- sector can also help by sharing its ex-
used to treat cancer. Fast forward 100 stry to breathe if Europe is to recover cymakers, businesses, academia and pertise and knowledge, particularly with
years and compare the drudgery of Ma- and flourish. Online privacy and secu- other stakeholders. older workers, the disabled or those to
rie’s experience to that of the European rity are just two examples of thorny is- In the 21st century, Europe’s prospe- whom technology and its applications
scientists who are building on her le- sues regulators must get right – both in rity will be built on her ability to remain do not always come automatically.
gacy. Today, researchers working on bre- relation to personal data but also cloud competitive, flexible and an incubator of The European Commission and the
akthrough drug trials at the University computing and its impact on science exceptional talent. But she must also Member States need to design the in-
of Newcastle have used cloud compu- and business. The debate may seem have workers who are able to execute centives and instruments for up-skilling
ting to cut the amount of time it takes complex and the answers often elusive, the vision of her entrepreneurs and and training to prepare the youth and
to achieve research results by 99%. but the fact it even exists is a reflection scientists. At present the gap that per- the workforce for the jobs of tomorrow.
Similarly, an image segmentation te- of the freedom and power technology sists between employers’ needs and wor- The long-term prosperity of Europe’s
chnique developed by Antonio Crimini has brought to millions. kers’ skills is growing. next generation is dependent on her
from Microsoft Research is showing For technology to remain the life- In 5 years 90% of European jobs will ability to remain competitive.
huge potential for speeding up radiation blood of European business, science and require some form of computing skills. Without adequate investments into
treatment, with some estimates sugge- innovation, it needs a regulatory frame- They will no longer be the domain of research and mechanisms to support in-
sting that as much as 4 million hours work that is both visionary and instruc- experts but the non-exchangeable cur- novation that will help Europe’s talents
could be saved globally in particularly tive. And it must be genuinely rency for the European worker who will thrive, there will be no fast-forward into
complex cases. European. work longer and change jobs many the future.
This article originally appeared in New Europe’s “Our world in 2011” special edition
The complete contents of this edition can be found at http://www.neurope.eu/2011
NEW EUROPE Europe: Leading or Lagging? May - June 2011 15
Special Edition
INTERVIEW: INDUSTRY
Mark Spelman
Global Head of
Strategy - Accenture
Within the
global market
trajectory it is
critical for Europe’s
competitiveness
that it does not
stand still
International Monetary Fund (IMF) Deputy Director, Poul Thomsen (R), accompanied by European Central Bank (ECB) head of mission, Rasmus Ruffer (L), and Troika representative
from the European Commission, Juergen Kroeger, during a press conference to present the agreement between the Portuguese authorities and Troika on the economic aid program, in Li-
sbon, Portugal, 5 May 2011. |EPA/MARIO CRUZ
Interview by Alia Papageorgiou line. He also leads Accenture’s strategic decrease in consumption, all these must “In fact the EU GDP has increased
think tank— the Institute for High Per- be addressed. by 0.8 % in t Q1,” not failing to mention
Mark Spelman could be described as formance, has responsibility for Accen- Looking at emerging economies he that “0.8 is exactly double that of the US
a tall, high flying, globetrotting, grey sui- ture’s global relationship with the World does postulate that all is not rosy for number.”
ted big grinned executive who likes to Economic Forum and is the chairman of them with issues as inflation for example In slight accordance with Spelman’s
keep Europe on her toes, “Europe is lag- the American Chamber of Commerce’s and around commodity production and prediction Rehn did not fail to mention
ging behind” is one of the first things he European Union Executive Council. price volatility particularly, there are is- that activity in China continues to out-
tells me as we’ve been trying to have a The difference he notes between Eu- sues there as well. pace economic activity in the advanced
phone interview on the Thursday before rope and the rest of the world in their His concerns are no different from economies.
the European Business Summit and fi- growth is a continued concentration so- global economists looking on the global The overall sentiment indicators
nally manage to talk. lely on the fiscal stability issues, “one stage and rating global competitiveness. show activity gathering pace in the next
“I’ve been flying around the world week it’s Greece, one week its Spain, then The following morning on 13 May quarter whereas recovery remains varied
and just got back from Rio in Brasil Portugal, so one of my concerns is that the European Commissioner responsible within the member states themselves.
where the world stage is turning its many leaders are so preoccupied with fi- for economic and monetary affairs held a The GDP is projected to grow by
glance more and more often,” he says ha- scal stability that other areas are not get- press conference to share the results of a 1.25% in 2011 and by 2% next year in
ving just given me a sweeping tour of wh- ting attention.” Eurostat report released moments before 2012 surpassing the pre-crisis levels.
at’s happening globally, how the world’s The world is moving forward, and and give his Spring Forecast with First As far as Greece was concerned, “the
economy is growing at 4% and how apart quickly “Asian countries have no finan- Quarter (Q1) figures for Europe’s eco- fiscal effort of the past year is unprece-
from Europe everyone else is forging cial drag, so Europe needs to become nomy the underlying goal. dented as over 7% of the GDP has been
ahead not necessarily in the countries one more pro-active, we need to look at the The Forecast was more positive than reduced,” however he warned that inter-
would expect. demand for exports, for innovation, sup- even he had expected “it may be Friday nal political squabbles must be “put aside
Rio for example is hosting the RIO ply of services and others and answer the 13th but for once I have some good for recovery to take place,” a political
+20 in June next year “and they’re very that,” Spelman emphasizes form the Ac- news on the real economy in Europe,” he comment nto often spouted from the
excited” notes Spelman, a UN Confe- centure offices in London. lightly mentioned before going back to Berlaymont indicating its severity.
rence on Sustainable Development, a hot “Within the global market trajectory the risks and vulnerabilities still on the Lagging behind or growing? That is
topic for growth, jobs and demand on the it is critical for Europe’s competitiveness horizon, “not least in the sovereign debt the question.
global scene. that it does not stand still,” Spelman re- areas.” In slight increments growth is there,
“I was also in China just before that peats. Of course he understands the need “Job creation remains unsatisfactory” if comparing to the world stage we’re de-
meeting with those involved in the for fiscal stability first but calls for a seg- he began, “developments remain uneven finitely not kicking our heels to the tune
SmartGrid there and could feel the mented reality where one half is concer- across member states”, growth prospects of the Zorba any more, but even some
energy for this great move in innovation,” ned with this and the other with growth, have been slightly upgraded compared to economists would agree that the last
says Spelman Accenture’s managing di- “SMEs need to be better equipped, In- last autumn, more over demand is the thing Europe is doing, at this stage, is a
rector for the Accenture Strategy service novation needs to be better funded, the main engine of growth. slow dance.
16 May-June 2011 Europe: Leading or Lagging? NEW EUROPE
Special Edition
EU WORLD
Zsolt Becsey
Minister of State for
Foreign Economic
Relations, Ministry for
National Economy of
Hungary
European Commissioner for Employment, Social Affairs and Inclusion Laszlo Andor (C) chats with participants prior to the meeting of EU employment ministers, at Grassalkovich Ca-
stle in Gödöllő, 30 km northeast of Budapest, Hungary, 17 January 2011. |EPA/ZSOLT SZIGETVARY HUNGARY OUT
By Zsolt Becsey
SMEs are usually referred to as the “backbone of the European
The Hungarian EU Presidency is convinced that
the success of economic development strategy de- economy”. As a significant source of job-creation, SMEs
pends on how policy initiatives affect SMEs. account for a great potential to contribute to full employment
SME policy and the systematic implementation
of measures, according to the "Think Small First" and EU employment rate target of 75% by 2020. Several studies
principle, are the first presidential priorities ech- have established direct link between SMEs and overall economic
oing the last European Business Summit’s clo-
sing sentence: growth rate
“There are many economic priorities, but the
number one priority should be boosting the per- The Midterm-Review of the Small Business l Support of SMEs’ internationalization, out- l Support of the establishment of SME En-
formance of small and medium-sized companies.” Act (SBA) for Europe focuses on implementa- lining the SMEs’international activity both in and voys.
The question is what has been achieved during tion of agreed measures and achieving concrete outside Europe. Great emphasis is placed on the An SBA conference will be organized in
one year? solutions for outstanding problems. issue of internationalization and enhancing Gödöllő, near Budapest within the Hungarian
SMEs are usually referred to as the “backbone l The review highlights the progress made in SMEs’entry to export markets with particular re- EU Presidency timetable under the title “Mobi-
of the European economy”. As a significant source implementing the SBA, both at EU and national gard to the identification of the main obstacles to lising SMEs for Europe’s Future” on 24-25 May
of job-creation, SMEs account for a great poten- levels. At the same time it indicates progressing foreign market entry and the connection between 2011 with the future of cohesion policy and the
tial to contribute to full employment and EU em- directions and measures for the sake of SMEs’de- innovation and internationalization. In contrast to improvement of the regulation of new financing
ployment rate target of 75% by 2020. Several velopment. Reducing administrative burdens on their contribution to the intra-EU trade (25%), instruments in focus.The European Entreprene-
studies have established direct link between SMEs is of vital importance at the EU level as the internationalization of SMEs outside the EU urship Award will be awarded and best practices
SMEs and overall economic growth rate. Due to well as the national one. is fairly limited as only 14% of them purchase their will be presented reflecting the different ways in
the economic crisis more than 3.5 million jobs in The new Hungarian government’s programme supplies overseas, and as only 13% of them export which regions, centres, cities, towns and commu-
SMEs have been lost, which further underlines that has been introduced recently intends to cut beyond the EU’s borders. SMEs’ cross-border nities have creatively implemented entrepreneur-
the specific need to streamline and consolidate drastically the bureaucratic burden on businesses. trade activities provide extra job creation oppor- ship-friendly environments and practices. The
SMEs policy at European level in order to restore In Hungary it is currently HUF 3,000 billion, tunities for them. Hungarian Presidency is the last member of the
the job-creating capacity of SMEs at the centre of which is 10.5% of the gross domestic product. Bu- l Exchange of best practices on training and Spanish-Belgian-Hungarian trio. Its priorities
Europe's economic recovery. The SME sector sinesses should start to feel the effects of cuts HUF educational programmes organized to promote were built on the results delivered by the Spanish
contributes to innovation, is a source of competi- 2,000 billion in the bureaucracy by 2012 genera- starting enterprise activity and becoming succes- and Belgian Presidencies. As a continuation we
tion, provides flexibility in the labour market, and ting an additional GDP growth of 1.2%-1.3%. sful entrepreneurs. Promoting entrepreneurship determined to pass the relay baton to the forth-
most crucially, is a source of job creation. As Eu- l Facilitating access to finance for SMEs is the and job creation (Erasmus for Young Entrepre- coming Polish Presidency with clearly visible re-
ropean small and medium-sized enterprises play first European priority including modification of neurs programme to foster cross-border networ- sults in the field of SMEs. The adoption of the
a central role in the performance of European regulation relevant to the new type financial in- king, mentoring schemes for female Single Market Act will be high on the agenda.
economy making them more competitive will struments. It is necessary to support the SMEs’ entrepreneurs, transfer of business, ent- “The twelve levers to boost growth and streng-
contribute to the Europe 2020 Strategy from em- access to bank and other financial resources, and repreneurship education). Education and training then confidence”are accompanied by high expec-
ployment to social exclusion related targets, from improve the regulation of new financing instru- are essential factors for later employability, com- tations. A key action for each lever and priority
internal trade and cross-border business activities ments (availability of state credit guarantee in- petitiveness, innovation, cultural development and measures should be adopted to relaunch the sin-
to the renewal of the European industrial policy. struments, venture capital funds, simplifying are tools to promote social inclusion. Enterprise gle market by the end of 2012.The first lever and
There is a necessity to develop strong synergies procedures of EU funding programmes). Europe Network provides support to encourage of utmost importance is “Access to finance for
with the Small Business Act, the Single Market l SMEs’ability for innovation, development of SMEs to become innovative and strengthen their SMEs”. The success of the reformed economic
Act and Smart Regulation for Europe. SME po- a new approach to innovation focusing on the technological capacity. The European Commis- cooperation, the enhanced surveillance of the fi-
licy and the systematic implementation and promotion of non-technological innovation (rea- sion is committed to more extended use of the nancial markets and the efficient implementation
mainstreaming of simplification measures accor- ching 80% in case of SMEs) should be strength- network. of the EU 2020 Strategy requires the completion
ding to the "Think Small First" principle, are th- ened. Their contribution to a resource-efficient l Progress in monitoring and stronger coordi- of the internal market with SMEs as the key fac-
erefore the first priority issues. economy is essential. nation of SBA implementation. tors to Europe's competitiveness.
NEW EUROPE Europe: Leading or Lagging? May - June 2011 17
Special Edition
EU WORLD
EU WORLD
EU WORLD
Mikael Hagström
Chairman, Executive
Council, AmCham EU
President EMEA and Asia
Pacific, SAS Institute
In Europe we
need to find
systems that encourage
and nourish risk taking
and creativity
|EPA/Julian Stratenschulte
EU WORLD
Matthias Ruete
In Europe,
transport
directly employs 10
million people and
accounts for 5% of
GDP. Many European
companies are world
leaders in infrastructure,
logistics, traffic
management systems
and manufacturing of
transport equipment Chinese Prime Minister Wen Jiabao (L) speaks as France's President Nicolas Sarkozy (R) listens during the closing ceremony of the Asia Europe Meeting (ASEM) in the Great Hall of the Pe-
ople in Beijing, China, 25 October 2008. |EPA/MINORU IWASAKI - POOL
By Matthias Ruete to the internal market and to our trade day (mb/d) in 2009 to about 100 mb/d in a “Blue Belt” of free maritime movement
with the rest of the world. Efficient tran- 2035, with much of the demand coming in and around Europe. In road transport,
Europe and Asia have a close relationship sport connections have made this possi- from Asian countries like China. The we want to implement the eFreight con-
based on shared interests. In both cases, ble: the EU relies heavily on its dense number of cars worldwide is projected to cept of administrative simplification, pa-
international contacts and a commitment transport network and advanced logistics. grow from 750 million today to 2.2 bil- perless documentation and full tracking
to trade are part of our heritage. Tran- In parts of Europe where the network is lion in 2050. It is difficult to imagine that and tracing of cargo, also to facilitate
sport is essential for both. In a changing most developed, congestion and bottle- oil supply can easily keep pace with this transhipment to other transport modes.
world, Europe and Asia face similar ch- necks are present, and the projected gro- increase in demand without significant In terms of innovation, the challenge
allenges, not only to preserve the status wth in the volume of transport is a cause upward pressure on prices. is to complement technological research
quo, but to improve the situation of our of concern. In other parts of Europe, there Oil also contributes to greenhouse gas with a systems approach, combining in-
citizens. is a lack of infrastructure. We intend to emissions. To reduce emissions, both Asia frastructure and regulatory requirements,
According to the UN, world popula- fill this "infrastructure gap" between we- and Europe will need greater use of low- coordination of multiple actors and de-
tion, now 7 billion people, is likely to stern and eastern parts of Europe, to cre- carbon technologies and better energy ef- monstration projects. We plan to do this
grow to 9 billion by 2050. While Euro- ate a transport system capable of serving ficiency, using less and cleaner energy. Oil through a Strategic Transport Technology
pe's population is expected to stabilise, our continent and its 500 million people. will have to be substituted wherever and Plan, which we hope will accelerate de-
the population of Asia is expected to grow We are aware that Asian partner co- whenever possible. ployment of new vehicle technology in all
by 1 billion people, most of them in South untries are making similar plans, particu- This would be easier in cities, where modes of transport. Information and
and South-East Asia. Clearly, continued larly within ASEAN, and look forward to high population density encourages the communication technology will also play
world population growth, combined with sharing ideas from both sides. use of battery-powered vehicles and pu- an important role in the optimisation of
current consumption patterns poses chal- In Europe, transport directly employs blic transport. Over longer distances, do- traffic flows and in the integration of
lenges to our environment, including cli- 10 million people and accounts for 5% of minated by intercontinental maritime modes.
mate change, to economic well-being, and GDP. Many European companies are freight and air traffic, reducing emissions No major change in transport will be
to international peace and security. We world leaders in infrastructure, logistics, will be more challenging. In regional pas- possible without adequate infrastructure.
have to change a lot about the way we do traffic management systems and manu- senger and freight transport, progress on The EU needs a coherent multimodal
things, and that applies to transport as to facturing of transport equipment. We are technology and fuels will be the most im- pan-European network, bringing together
any other major economic sector. particularly proud of our high-speed portant factor. EU capitals and main economic centres.
This is the context in which the Eu- trains, and of the role of companies like Our White Paper identifies 40 initia- The last element in our strategy is the
ropean Commission published a White Airbus on the world scene. The integra- tives, grouped in four areas; what we call international dimension. Open market
Paper at the end of March this year, with tion of the world economy provides new the Four "I"s: Internal market, Innova- agreements with partner countries, infra-
the title "Roadmap to a Single European opportunities, and we welcome competi- tion, Infrastructure and International. structure connections with our neighbo-
Transport Area – Towards a competitive tion based on reciprocal market opening The key concept, however, is “Integra- urs, definition of international standards
and resource efficient transport system". and on fair practices in line with inter- tion”. Our aim is a fully integrated Single on the basis of agreed technical rules, or
This is a strategic document that assesses nationally agreed norms. Asia is our European Transport Area in which all re- participation in international transport
recent transport policy, looks at long-term partner. sidual barriers, modal or geographical, are organisations: there are many aspects that
challenges and draws a framework for po- Today's transport technology increa- eliminated. require international policy cooperation.
licy action in the ten years to come, to singly depends on fossil fuels, primarily In the EU internal market, we will Europe is a world leader in transport
promote growth and jobs while using re- oil, and this fact is reflected in Interna- focus on rail. The Single European Sky and logistics. We look forward to conti-
sources more efficiently. tional Energy Agency projections for de- should be completed as soon as possible. nued cooperation with our friends in
The prosperity of the EU owes much mand growth: from 84 million barrels per In the maritime sector, we want to create Asia.
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NEW EUROPE Europe: Leading or Lagging? May - June 2011 21
Special Edition
EU WORLD
Dr Greg Austin
Vice President of
Program Development
and Rapid Response,
EastWest Institute
The
weakening of
state power is
also evident in the ability
of cyber criminals to
strike with increasing
severity without
immediate response
from law enforcement
agencies, in an
environment where
traditional approaches to
privacy or low levels of
international
cooperation tie the Smartvue demonstrates their video surveillance S9 HD cameras with a Apple Macbook Pro laptop during the Macworld Expo 2011 at Moscone Center in San Francisco, California, USA 27
hands of law January 2011. |EPA/JOHN G.MABANGLO
enforcement
By Dr Greg Austin advanced technologies (e.g. Google and psychological marker the faltering ad- In summary, managing security risk
China, India/UAE and Blackberry). vanced economies could do without. for global companies will become a more
The most important political trend glo- The weakening of state power is also There are levers that can be applied to pervasive activity, intruding at more le-
bally is the weakening power of national evident in the ability of cyber criminals all of these problems, so the mid-term vels of the business, with many more di-
governments, even those with strong re- to strike with increasing severity without perspective need not be gloomy. Much mensions than even ten years ago. The
pressive intent and capacity. With that immediate response from law enforce- will depend on the nimbleness of policy number of stakeholders has increased and
comes increasing decentralization of ment agencies, in an environment where makers and their pragmatism. The high- the geographic sources of risk have mul-
power inside state borders and an incre- traditional approaches to privacy or low est political risk, and therefore the atten- tiplied.
asing tendency toward trans-border inte- levels of international cooperation tie the dant business risks, will be where the The newest vulnerability is that the
gration and international collaboration. hands of law enforcement. political leadership is most ideological sources of risk can teleport themselves
The most important political actors The stakes of political miscalculation (less pragmatic), its social enforcement globally. The cyber vandalism seen in
in the world today are transnational, ei- in the face of cyber risks are highest in leverage is weak, and its reliance on ex- Russia toward Estonia in 2007 and Ge-
ther coalitions of states, alliance armies, the countries or business sectors that pert advice for alternative policy respon- orgia in 2008 had a narrow geographic
multi-national corporations, new forms have the highest dependence on digital ses is low. focus. By contrast, the attacks of the Ira-
of private-public ventures, global civil so- interconnectivity. These include financial A third trend, more in the social do- nian Cyber Army retaliating for the
ciety organizations, and international ter- services, energy distribution and, in many main, of high import to advanced indu- Stuxnet attack on Iran in 2009 have not
rorist groups. countries, food supply. But the physical stry, is that the “medium has overtaken been so constrained. The same global
Through the next decade, this trend security of telecommunications assets, the message”. The long foreshadowed aspect can be seen in the 2010 campaign
to decentralization of power and regional such as undersea cables, or of the electri- quickening of social and political change of denial of service attacks by Anony-
or global collaboration, including the de- city supply should not to be overlooked under the influence of ICT has definitely mous, akin to a nascent global anarchist
legitimization of inter-state war and in- in that constellation of critical sectors. arrived and is intensifying. Increasingly, movement, in retaliation for the withdra-
ternational terrorism, will almost Second, there is rising concern among ICT companies and media companies or wal of services to Wikileaks by Master-
certainly intensify. G20 members about the fragility of the media savvy individuals dependent on card and other companies.
The weakening of state power does international economy in the face of in- them are being viewed not as providers as Many in the West have felt a smug
not mean a weakening of politics. On the creasing volatility of commodity prices. a means of communication but as driving sense of superiority in the outpouring of
contrary, politics becomes more contested This sense of foreboding in advanced forces, or even as the glue, in the social rage against leaders in the Arab world,
and less predictable in the medium to economies is matched in poorer countries order of countries. One manifestation of and some delight that the movements
longer term. The appeal of this historic with concerns about national economic this is the sense of outrage felt by consu- were facilitated by advanced ICT consu-
trend toward weakening of state power security in the face of volatile food prices mers when large amounts of customer mer products. Yet, as the campaigns of
carries with it higher risks of miscalcula- and doubts about rising pressure on fresh data are compromised. the Iranian Cyber Army and Anonymous
tion in new political struggles that water resources in the medium term. This has long since ceased to be a show, this combination of rage and em-
emerge. We see this today in the bum- Underpinning these concerns among question of possible individual harm. It powering digital connectivity is a major
bling intervention of NATO in Libya political leaders is a persistent weakness would seem likely that in due course stif- source of risk for global business. To un-
and the weakening of once-firm US al- in the institutions of global economic go- fer criminal penalties will be introduced derstand it, track it and respond to it
liances in the Persian Gulf. We also see it vernance in the face of multi-variant th- for holders of data who allow a massive across borders – at the same time as co-
in the contest between some states and reats. In the global schema, the recent breach. A new legal norm may well come untering the increasingly massive attacks
ICT companies seen as reinforcing the downgrading by Standard & Poors of into being to enforce a duty to secure pri- by cyber thieves – will be a new and de-
weakening trend of state control through United States credit rating is the sort of vate data. manding burden.
22 May-June 2011 Europe: Leading or Lagging? NEW EUROPE
Special Edition
EU WORLD
Daniel Hamilton
Although
rapidly
developing countries
have earned much
attention, the U.S. and
the EU
remain the anchor of the
world economy
US President Barack Obama (L) shakes hands with EU Commissioner Jose Manuel Barroso (R) as EU Council President Herman Van Rompuy (C) looks on during a press conference
at the EU-US Summit in Lisbon, Portugal, 20 November 2010. EU-US summit focuses on key transatlantic issues such as economic co-operation. |EPA/IAN LANGSDON
greater economic opportunities for telecommunications, energy, innovation economy. A targeted opening of services
By Daniel Hamilton American and European workers, policies and other areas not yet covered by could present vast opportunities to firms and
The world that created the transatlantic consumers and companies. multilateral agreements. The alternative is huge gains to consumers. According to a
partnership is fading fast. The United States To unleash this potential, the United not drift; it is growing protectionism, U.S.- study conducted by the Dutch firm Ecorys,
and Europe must urgently reposition and States and the EU should commit to a barrier- EU rivalry in third markets, and the triumph a 75% reduction of services tariffs would
recast their relationship as a more effective free Transatlantic Marketplace by 2020. This of lowest-common-denominator standards yield almost $13.9 billion annually for the
and strategic partnership. It is a moment of would require coordinated strategies to reduce for the health and safety of our people. EU and $5.6 billion for the U.S. Third,
opportunity— to use or to lose. remaining tariff barriers, overcome regulatory To advance this agenda, the U.S. and EU regulators and legislators on both sides of the
In this new world of global connections, obstacles, remove investment restrictions, and should announce a joint commitment to Atlantic should be consulting in advance
the transatlantic relationship is the thickest align future standards in ways that promote work towards a “tariff only” Free Trade when considering “upstream” regulatory
weave in the web. The deep integration of mutual and sustainable prosperity while Agreement, eliminating all duties on traded cooperation for new technologies. RFID,
our democratic societies and economies is protecting health and safety. I have no illusions industrial and agricultural products. Given nanotechnology, internet/broadband, and
unparalleled and transcends neat “foreign” about the difficulties involved. Yet the payoff that most transatlantic tariffs are low and “green” technologies are four priority areas.
and “domestic” distinctions. We are literally could be substantial in terms of jobs, trade and often simply have nuisance value, a focused More effective and concerted exchanges
in each other’s business. investment. Those who worry that an tariff-only free trade agreement could be among scientists and technologists engaged in
Although rapidly developing countries ambitious transatlantic economic initiative achieved relatively quickly. It is likely to pre-competitive research would enable
have earned much attention, the U.S. and the could threaten the multilateral system should enjoy a broader base of domestic political compatible standards to develop that can lift
EU remain the anchor of the world consider that the opposite may be true. support. Once such a deal is negotiated, the the lives of our people. The alternative to such
economy. No two regions of the global Europeans and Americans certainly share an U.S. and EU should invite others to join in cooperation: a Chinese standard.
economy are as economically fused. The U.S. interest in extending prosperity through certain sectors or in the overall arrangement. Finally, in this turbulent time a key test of
and the EU are the two largest economies multilateral trade liberalization. The Doha The European think tank ECIPE estimates strategic U.S.-EU partnership is the ability of
and financial markets in the world. Together Round of multilateral trade negotiations is at that a U.S.-EU zero-tariff agreement on the transatlantic partners to work with other
they represent 54 percent of global GDP the make-or-break point. But even a trade in goods alone could boost annual EU key actors to restructure the world economy.
and roughly 80 percent of all development successful Doha agreement will not address GDP by up to .48% and 1.48% for the U.S.; There is still no substitute for transatlantic
assistance and humanitarian assistance. The such pressing issues affecting the European generate welfare gains of up to $89 billion leadership, but in a G20 world this must be of
dollar and the euro account for roughly 90 and American economies as competition for the EU and $87 billion for the U.S.; and a different kind— a more nuanced role that
percent of total holdings of central bank policies, corporate governance, more effective push EU exports to the U.S. up by 18% and works to preserve the principles that have
reserves. The transatlantic economy regulatory cooperation, tax and other issues. U.S. exports to the EU up by 17%. guided the remarkable global growth of the
generates $5 trillion in total commercial Nor will it address cutting-edge issues raised The potential payoff is high. For last few decades, addresses risky behaviors, and
sales a year and employs up to 14 million by European and American scientists and example, under the US-South Korean trade engages emerging economies as responsible
workers in mutually “onshored” jobs on both entrepreneurs who are pushing the frontiers of deal pending before the U.S. Congress, U.S. stakeholders. The bottom line is that the
sides of the Atlantic. These workers enjoy human discovery in such fields as genetics and exports to Korea would likely increase by transatlantic economy remains very strong and
high wages and high labor and nanobiotechnology. $9.7-$10.9 billion. Under a U.S.-EU deal is on the mend, but its future health is not only
environmental standards. Europe is by far Transatlantic markets are the laboratory U.S. exports to the EU would increase by dependent on the cyclical economic rebound
the most important source of “onshored” of globalization. Together we face issues that $53 billion – five times as much. underway. It also rests on more proactive,
jobs in America, and the U.S. is by far the neither of us faces with others. That is why Yet most political energy is expended on coordinated and forward-looking policy
most important source of “onshored” jobs in the “multilateral versus transatlantic” smaller deals such as Korea or Columbia initiatives from policy makers and legislators
Europe. Despite this potential, U.S.-EU dichotomy is a false choice. The U.S. and EU rather than on bigger payoffs that could be on both sides of the Atlantic.
economic cooperation punches well below should advance on both fronts gained through transatlantic agreement. The U.S.-EU relationship is important
its weight. Niggling disputes over issues that simultaneously: push multilateral Such an initiative should be coupled but not strategic. Such a partnership is
together account for less than 1 percent of liberalization through Doha and press with transatlantic negotiations aimed at possible, but it is not the partnership we have
U.S.-EU commerce suck the political transatlantic market-opening initiatives in reducing transatlantic barriers to services— today. Given the challenges we face, such a
oxygen out of efforts that could create far services, financial markets, the sleeping giant of the transatlantic partnership is urgent.
NEW EUROPE Europe: Leading or Lagging? May - June 2011 23
Special Edition
EU WORLD
Hiroyuki Ishige
Kofi Annan, former Secretary-General, United Nations and Member of the Foundation Board of the World Economic Forum attends the launch of the Africa Progress Panel Annual Re-
port 2011 on the second day of the World Economic Forum on Africa 2011 in Cape Town South Africa 05 May 2011. Africa has demonstrated greater than expected resilience through
the global economic crisis and has become one of the fastest-growing regions in the world. Improved political and macroeconomic stability, strengthened political commitment to private sec-
tor investment and better access to basic education and social services are drivers behind this trend. |EPA/NIC BOTHMA
By Hiroyuki Ishige the Japanese business circle will continue in the chemical sector. It should be the
to attach essential priority to trade policy We should time to have such discussions in order to
Having been almost a decade since its la-
unch in November 2001, the Doha Round
including the Doha Round, and the rene-
wed growth strategy will fully reflect such recognize that, if save the Doha Round.
Finally, it cannot be too much to em-
is an important as well as timely issue to
be discussed at this moment. It is impor-
priority given to trade policy.
I would like to suggest three points
we are not able to phasize the damage should Doha fail. It
goes without saying that the dispute sett-
tant because trade liberalization is the en- that I believe we should keep in mind for agree on a Doha lement mechanism, one of WTO’s most
gine of economic growth without any concluding the Doha Round. First of all, important functions, would remain as a
additional fiscal burden. It is timely beca- we need to form a sense of shared respon- package by the end of raison d’être of the WTO even if the Doha
use the Round is now at a critical juncture, sibility among the major countries for con- Round failed. Yet, we should recognize
and actually getting into a stalemate. cluding the Round. During the Uruguay this year, the damage that the WTO’s credibility as a rule-ma-
So, how can we get out of this stale-
mate? I think that support from industry
Round, there seemed to have been a sense
of shared responsibility among the so-cal- to the WTO and king institution is currently at serious risk.
Today, there are many trade agendas to be
is indispensable. Let me describe the cur-
rent situation of Japanese industry, which
led Quad, namely the U.S., the EU, Japan
and Canada, for successfully concluding
international tackled as quickly as possible at the WTO,
including non-tariff measures and export
has been a promoter of the Doha Round the negotiation. economic system as a restrictions among others. Whilst being
but is currently focusing on its recovery The shift in global economic structure the only international organization which
from the damage from the Great East during the last decade, however, has tran- whole would be could potentially address these issues ef-
Japan Earthquake on 11 March. In last sformed the dynamics of the Round nego- fectively, the WTO cannot start up the di-
March, Japan’s manufacturing production tiation. In terms of nominal GDP, for enormous scussions for new agendas without
substantially declined by more than 15% instance, both Brazil and India increased concluding the Doha Round. In addition,
from the previous month, the largest de- more than three-fold and China more than nefits of the Doha package. In fact, the the Doha Round is a kind of litmus test for
cline in more than 50 years. The incident four-fold from 2001 to 2010. It would thus average tariff rate of Chinese chemical the effectiveness of multilateralism in dea-
at Fukushima Daiichi Nuclear Power Sta- be reasonable to construct a new sense of products after the application of the Swiss ling with other global economic agendas
tion as well as damage to other infrastruc- shared responsibility for concluding the Formula, for instance, must be only around such as climate change. We should reco-
tures has been hampering Japan’s economic Round among major countries by reflec- 6-7%. What is necessary in this situation gnize that, if we are not able to agree on a
and industrial recovery. Japanese industry, ting emerging countries’ growing econo- is to find a common ground by conducting Doha package by the end of this year, the
nonetheless, has been making utmost ef- mic power and presence in the negotiation. intensive line-by-line basis discussions. In damage to the WTO and international
forts to restore the production networks Secondly, it is necessary to find a way this regard, the efforts to facilitate further economic system as a whole would be
and to resume manufacturing production, out of the current impasse in the NAMA discussions among major countries made enormous.
which will soon result in returning the negotiation, particularly in the negotiation by the EU and other players should be Some suggest that it would be the time
supply of parts and components necessary on sectoral tariff elimination and reduc- welcomed and promoted. I would also like to discuss on the so-called “Plan B” for the
for assembling, for example, automobiles tion. It is said that the major developed to suggest encouraging the chemical indu- Doha Round. I would however not take
and electric machineries all over the world and developing countries have not yet stries of major countries, such as the U.S., the position to say “yes”. At the APEC Le-
to normal. Whereas recovery from this da- found a common ground to strike a deal in the EU, Japan and China, to have direct aders Meeting at Yokohama and G20
mage is the top priority for Japanese indu- the chemical sector negotiation, which is contacts for finding a solution in the sec- Summit Meeting at Seoul in last Novem-
stry at this moment, the Government of the key among various sectoral initiatives. toral negotiation. During the Uruguay ber, the leaders declared that 2011 is a cri-
Japan has already started a discussion on In my view, however, the so-called “huge Round, the Quad’s chemical industries ex- tical window of opportunity for
economic growth strategy, which includes gap” seems to be, at least technically, not changed views on the tariff rates in the concluding the Round. We must “do it” by
international trade strategy. I believe that substantial enough to abandon all the be- process of agreeing on tariff harmonization all means.
NEW EUROPE Europe: Leading or Lagging? May - June 2011 24
Special Edition
EU WORLD
Julian Knott
Yang Jiechi
José Manuel Barroso, Hu Jintao, President of the People's Republic of China, and Liu Yongqing, wife of Hu Jintao (from left to right) | Credit © European Union, 2010
By Yang Jiechi
BEIJING - The international landscape
in 2010 has been rather fluid. The mo-
mentum of the global financial crisis has
been curbed, yet its impact has been de-
epening and it has triggered profound
changes in international relations and
the global pattern. The world economy
has continued with its slow recovery, but
more fragility and imbalance have been global economic governance mecha- tors affecting security have become more case for China-Europe cooperation is
exposed. Global economic and financial nisms in a more equal fashion than the complex. stronger than ever. Our cooperation will
risks have persisted, and protectionism past. The G20 is evolving from a crisis More currents of thought have come benefit not only the development of our
has further exacerbated. response mechanism to one focusing on to the fore. A lot of exchanges, reflection two sides but also stability and sustaina-
The issue of development has become long-term economic governance, and its and changes are going on in the interna- ble development of the world.
more prominent, with major economies role and influence is receiving wide at- tional cultural field. New ideas and pro- China and Europe may have diffe-
pondering adjustments to their econo- tention. There has also been positive posals have been put forward by various rent views on some issues due to our dif-
mic growth and management models. progress in IMF and World Bank re- countries. ferences in social system, development
The global power configuration has be- forms. And there has emerged a clearer stage and cultural tradition. This is na-
come more balanced. The international security picture has trend of more mutual learning and exch- tural. It is important for us to rise above
A number of emerging economies have become more complicated. Although anges between different civilizations and ideological differences, respect and treat
risen rapidly in succession, and shown peace is taking greater hold in the world, different development models. each other as equals, seek common gro-
strong momentum of growth as a group, the intertwining of traditional and non- Thanks to concerted efforts, China und while setting aside our differences,
further closing the gap with developed traditional security issues has made se- and Europe have achieved steady growth and strive for a win-win situation. In the
countries. And groupings like BRIC and curity threats more diverse and complex. in our strategic partnership in 2010. coming new year, China is ready to work
BASIC countries have grown in While Asia enjoys general stability on There have been more frequent ex- with Europe to strengthen dialogue and
strength. the whole, security challenges are on the changes in the political field, closer eco- cooperation, increase mutual understan-
Reform of the international econo- rise and the hotspot issues heat up from nomic ties and more active ding and trust, and promote sustained,
mic system has made headway. Develo- time to time. Some Asian countries have people-to-people exchanges between the sound and steady growth of our rela-
ping countries are now participating in experienced political instability and fac- two sides. In the current situation, the tions.
This article originally appeared in New Europe’s “Our world in 2011” special edition
The complete contents of this edition can be found at http://www.neurope.eu/2011
26 May-June 2011 Europe: Leading or Lagging? NEW EUROPE
Special Edition
Nirupama Rao
India’s Foreign
Secretary.
By Nirupama Rao
NEW DELHI – The key role of emerging
The strength of the Indian economy is underpinned
and developing countries – including India,
China, and Brazil – in sustaining world eco-
by a high saving rate and robust investment
nomic growth was brought into sharp focus
during the recent global crisis, and has been
well documented. This trend is likely to ding to one estimate, middle-class consu- king system with limited exposure to global At its summit in Seoul in November, the
continue in 2011 and beyond. mers in a dozen emerging economies today markets, together with the importance of G-20 firmly placed development at the core
Indeed, the IMF expects that emerging wield annual purchasing power totaling ap- domestic consumption in sustaining de- of its agenda. Indian Prime Minister Man-
and developing economies will grow by 6% proximately $6.9 trillion. mand, has also helped. But what distingui- mohan Singh, underlining the importance
in 2010 and 6.3% in 2011. Emerging-mar- Indeed, projections from McKinsey & shes India from other emerging economies, of infrastructure investment, made the fol-
ket economies have not only cushioned the Company suggest that the purchasing in particular China and the Southeast Asian lowing proposal, which several leaders en-
global impact of the recent crisis, but have power of this rising middle class in emer- countries, is that domestic demand, rather dorsed: “Recycling surplus savings into
also helped industrialized countries reverse ging markets may rise to $20 trillion over than exports, is the primary driver of gro- investment in developing countries will not
the recessionary trend of 2008-2009. But re- the next decade – twice the current level of wth. A return to high growth rates globally only address the immediate demand imba-
covery remains fragile in the developed consumption in the United States. The four will require a broader revival of demand. lance, it will also help to address develop-
world, with unemployment remaining at biggest emerging economies – Brazil, Rus- Needless to say, this will occur only gra- mental imbalances. In other words, we
crisis levels. sia, India, and China (the BRICs) – are large dually, particularly in the developed coun- should leverage imbalances of one kind to
But, while emerging economies are pro- producers and consumers of goods and ser- tries. Thus, India’s high growth rates will redress imbalances of the other kind.”
ving to be drivers of global demand, the vices, and will also be important in shaping have to remain dependent on strong dome- As we head into the second decade of
right mix of government initiatives and po- the pace, direction, and sustainability of glo- stic demand. In order to meet this challenge, the century, innovative ideas like using glo-
licies is still required to ensure that they con- bal economic growth. we are focusing on investments in infra- bal savings or surpluses to finance infra-
tinue to provide the impetus for faster world Let me turn to India specifically. In the structure sectors such as power, telecommu- structure in emerging and developing
economic recovery in the short term and be five years preceding the 2008-2009 crisis, nications, roads, ports, and airports. countries should be pursued seriously.
the engines of sustainable growth in the me- the Indian economy grew at an average rate While the public sector will continue to Doing so would not only sustain the growth
dium and long term. There is also a strong of nearly 9% annually. During the crisis, an- play an important role, given the massive in- momentum of these economies, but would
need for supporting long-term capital flows nual growth slowed, but only to 6.7%, re- vestment required, substantial private inve- contribute to global recovery by generating
to emerging economies to stimulate inve- flecting the economy’s inherent resilience. stment – including foreign investment – much-needed additional demand in the de-
stment further, particularly in their infra- The growth rate subsequently recovered to would be needed to address India’s huge “in- veloped countries.
structure sectors, thereby injecting 7.4% in 2009-2010, and we expect 9% gro- frastructure deficit” and the financing gap While the emerging economies’ global
much-needed additional demand into the wth by 2011-12. that accompanies it. A strategy of private- role will inevitably grow in the coming years,
global economy. The strength of the Indian economy is public partnership has been adopted to ad- this shift will need to be anchored in a coo-
In this regard, another important deve- underpinned by a high saving rate and ro- dress the infrastructure challenge. At the perative partnership with the developed
lopment is the increasing number of emer- bust investment. The government’s prompt same time, we need to invest in our human world. As for India, our resilient democratic
ging-market middle-class consumers, their action to counter the crisis – fiscal stimulus, capital, supporting the development and up- values, ability to manage diversity, and
growing purchasing power, and thus their growth packages, and monetary easing – grading of the workforce’s skills and capa- strong economic fundamentals underpin
potential impact on global demand. Accor- proved effective. A sound financial and ban- city for innovation. our country’s current global posture.
This article originally appeared in New Europe’s “Our world in 2011” special edition
The complete contents of this edition can be found at http://www.neurope.eu/2011
NEW EUROPE Europe: Leading or Lagging? May - June 2011 27
Special Edition
LABOUR MARKET
Henryka Bochniarz
President of Polish Con-
federation of Private
Employers LEWIATAN
Now the
business
communities
from the New Member
States are looking for a
fast resolution of the
EU’s economic
governance trouble.
From business point of
view this is a question
of a long-term stability Young people take part in the Schuman Parade to commemorate Robert Schuman's proposals for an organised Europe, in Warsaw, Poland, 7 May 2011. The Schuman Declaration of 9
and growth potential May 1950 is considered to be the beginning of what is now the European Union. |EPA/BARTLOMIEJ ZBOROWSKI POLAND OUT
Dominique
Strauss-Kahn
Managing Director of
the International Mon-
etary Fund.
A stronger
and safer
financial system is the
bedrock of a
successful economy.
This requires strong
regulation, with a
sensible rulebook for
financial markets and
institutions Members of the G24 meet at the IMF headquarters in Washington, US, 22 April 2010 |ANA/EPA/ASTRID RIECKEN
sion, crises will still occur – which is why we need has caused public debt and deficits in many ad- will drive up the value of the local currency, de-
By Dominique Strauss-Kahn
effective resolution mechanisms to deal with in- vanced economies to soar. stabilize financial markets, and fuel economic
stitutions that get into trouble. And, finally, given How quickly fiscal retrenchment should be overheating. Their reactions range from buying
WASHINGTON, DC – Over the last quar- powerful interactions within the financial sector launched – and the right balance between hi- up the foreign money to prevent currency ap-
ter-century, the global economy enjoyed a re- and across the broader economy, we need an gher taxes and lower spending – will vary by co- preciation to adopting capital controls, and, in
markable stretch of stable growth and low overarching framework to manage risks in the untry, reflecting factors like the strength of the extreme cases, to keeping the money out altoge-
inflation.The so-called “Great Moderation”lul- financial system as a whole. economic recovery, the market’s appetite for debt, ther.The situation has become quite tense, with
led many policymakers into a false sense of se- Much has already been done to advance re- and initial spending and revenue ratios. But the talk of “currency wars”and a real risk of financial
curity about their ability to manage the economy gulatory reform, notably the recent agreement common objective for fiscal policy must be to protectionism. Clearly, we need to get a better
and deal with financial crises. But, as the Great to strengthen bank capital (Basel III). Yet we are support durable medium-term growth and job handle on what is driving these capital inflows.
Moderation metastasized into the Great Reces- far from having the supervision needed for pro- creation. We also need to identify the best policies for de-
sion, fatal flaws in conventional thinking came per implementation of the rules. Effective reso- The distribution of income is another im- aling with them – keeping in mind the impact
to light. One of the most notable was just how lution mechanisms and systemic frameworks portant issue. In the years leading up to the cri- of these policies on the global economy as a
poorly we grasped the linkages between the fi- remain even more elusive. sis, inequality rose in many countries, with whole. And we should explore whether a system
nancial system and the broader economy – as Moving to the broader economy, we have worrisome consequences for social cohesion. Ri- of global rules aimed at reducing the volatility of
well as the linkages between countries. learned that growth must be balanced in order to sing inequality may also have increased vulnera- capital flows would be useful.
Today, as policymakers seek new paradigms be healthy. At the national level, this requires bility to crisis: with fewer people able to dip into Global financial insurance is an important
for managing the economy in 2011 and beyond, tools to prevent excesses in one sector from brin- savings during bad times, the impact on growth related issue. Just as a family backstops its savings
a better understanding of these linkages will be ging down the entire economy. At the global is even larger. Turning to the international di- with insurance, countries should be able to tap
essential to promoting economic growth and re- level, it requires a better distribution of growth mension, understanding better how policies into a global financial safety net. Much has alre-
ducing the risk of crises. Equally important is the across countries, in order to prevent destabilizing adopted in one country spill over onto other eco- ady been achieved since the crisis, through more
realization that by working together, we can imbalances. nomies is key. resources for the IMF and new financing in-
build a more successful and more stable global What are the implications for macroecono- This approach lies at the heart of the G-20’s struments. But more is needed, and the Fund is
economy, for the benefit of all countries. mic policy? efforts to achieve strong, stable, and balanced exploring cooperation with regional financing
Let me spell out what this means for three Monetary policy needs to look beyond its global growth. The International Monetary mechanisms, as well as new ways to use its in-
policy objectives: building a stronger and safer core focus on low and stable inflation and pay Fund is also stepping up its work in this area, th- struments in a systemic crisis.
financial sector, achieving more balanced and much greater attention to financial stability.The rough “spillover reports”on China, the euro zone, Let me tie all of this together.
more stable growth, and managing large and vo- debate now is how, exactly, to factor this impe- Japan, the United Kingdom, and the United One principal policy failure in the run-up to
latile capital flows. rative into monetary policy, and how to coordi- States. Gaining a better appreciation of the fi- the crisis was a lack of imagination: we failed to
A stronger and safer financial system is the nate the work of monetary and regulatory nancial linkages between countries is also im- appreciate just how intricate the global economic
bedrock of a successful economy. This requires authorities. portant. During the crisis, we saw how quickly and financial web had become. Let our next fai-
strong regulation, with a sensible rulebook for fi- For fiscal policy, the crisis showed the value capital fled from countries previously conside- ling not be the result of a lack of cooperation.We
nancial markets and institutions. And, to ensure of maintaining low public debt and deficits du- red safe bets. Today, many of these countries are must reach across old dividing lines – both wi-
that everyone plays by the rules, financial insti- ring good times: countries with healthier public reeling from a veritable tsunami of returning thin economies and between them – and work
tutions must be supervised intensively. finances have more space to cushion the econo- money. Policymakers in many emerging-mar- together to build a stronger, more resilient global
Now, even with the best rules and supervi- mic impact of crises. But the Great Recession ket countries worry that surging capital inflows economy.
This article originally appeared in New Europe’s “Our world in 2011” special edition
The complete contents of this edition can be found at http://www.neurope.eu/2011
NEW EUROPE Europe: Leading or Lagging? May - June 2011 29
Special Edition
LABOUR MARKET
Annemarie Muntz
President of Eurociett,
representing the private
employment sector in
Europe
EU Commission Chairman Jose Manuel Barroso (foreground) at the start of the high level conference, Single Market 'Time to Act', at the European Commission headquarters, in Brus-
sels, 8 February 2011. Behind is the EU Commissioner for Internal Market and Services, Michel Barnier. |EPA/JULIEN WARNAND BELGIUM OUT
Caroline Jenner
CEO, Junior
Achievement-Young
Enterprise Europe
Boys dressed in Hungarian national costume sing folk songs on the stage during a cultural programme held on the sideline of the second day consultation of the informal meeting of EU culture
and education ministers in Grassalkovich Palace in Goedoelloe, some 30 kms northeast of Budapest, Hungary, 29 March 2011. |EPA/TAMAS KOVACS
By Caroline Jenner
According to a recent survey of 517 European business leaders,
As business leaders and decision makers kick off
this week’s European Business Summit, one conducted on behalf of Junior Achievement-Young Enterprise
thing is clear: young people in Europe are not
equipped with the education and skills that Eu- Europe, 63% of respondents said that their countries’ educational
ropean businesses need to succeed. Not only
does this impact job opportunities for our young
systems were not preparing young people with the right skills to
people, it also affects the ability of European bu-
sinesses to compete in an increasingly global
enter the workforce
market.There is an urgent need to close this gap
by increasing collaboration between business many Member States have recognized the gro- get businesses more engaged in teaching stu- their values and concerns, and they do think
and education—and this collaboration must wing gap between education and skills and bu- dents the skills they need to compete in a glo- that they will find this in MST.
start early, while children are still in school. siness needs, and have set strategic objectives to bal marketplace. To respond to this growing need, Junior
According to a recent survey of 517 Euro- further develop entrepreneurship, the future is For example, one of the greatest gaps bet- Achievement-Young Enterprise Europe and
pean business leaders, conducted on behalf of less predictable than ever before and the pace of ween education and business needs in Europe ExxonMobil have created the Sci-Tech Chal-
Junior Achievement-Young Enterprise Europe, change is accelerating. is in the area of math, science and technology lenge, a programme designed to motivate stu-
63 per cent of respondents said that their co- We can expect labour markets in Europe to (MST). According to Cedefop forecasts, more dents, ages 15-18, to consider MST-oriented
untries’ educational systems were not preparing face three major changes over the next 10 years, than 4.5 million jobs for technicians and asso- careers. The programme helps raise students’
young people with the right skills to enter the according to the European Commission: “First, ciated professionals, including physical, engi- awareness of the importance of MST skills and
workforce. Seventy per cent of respondents said there is in the medium and long term a great neering, life science, health and teaching how these skills can be applied in enterprising
their countries were doing a poor job develo- potential for employment creation in Europe – associate professionals are expected to be crea- ways to tackle tomorrow’s challenges.
ping financial and entrepreneurial skills among both for new and replacement jobs. Second, the ted in Europe over the next decade. Another Nearly 10,000 secondary school students
young people. An additional 54 per cent said skills, competencies and qualification require- 2.7 million jobs in Europe are expected to be and 180 teachers in nine European countries
that young people were lacking “soft skills,” ments will increase significantly, and across all created for physical, mathematical and life- will have an opportunity to participate in the
such as confidence, presentation skills, networ- types and levels of occupation. Third, there is a science engineers and health and teaching pro- Sci-Tech Challenge by 2012. Throughout the
king and teamwork. need to ensure a better long-term match bet- fessionals. programme, more than 200 employees from
A 2010 report from the European Com- ween skills supply and labour market demand.” While the need for MST professionals is ExxonMobil will volunteer their time to teach
mission takes this one step further saying that At the same time, according to the Euro- higher than in other sectors and is increasingly student participants helping to develop the next
entrepreneurship and financial literacy are two pean Centre for the Development of Vocatio- rapidly, according to Eurostat data (1999- generation of scientists, researchers, engineers
of the most important soft skills needed in the nal Training (Cedefop), demand for 2008), the proportion of graduates in MST and mathematicians.
Europe’s labour market. The Commission goes highly-skilled people in Europe is expected to subjects among all graduates is either stable or These kinds of partnerships, which supple-
on to say that entrepreneurial skills and mind- rise by almost 16 million over the next 10 years lower than in the past. This is not surprising ment Europe’s educational systems, are critical
sets are not only necessary to increase the rates and a total of 7 million new jobs is expected to given the results of a recent international survey to ensuring the right match of skills for Euro-
of start-ups and the survival of existing firms, be created between 2010 and 2020. , which indicated that young people in more pe’s labour market—both now and in the fu-
but they are also useful to foster growth and in- For all these reasons, there is an urgent need developed countries are less inclined to pursue ture. It’s time for all European businesses to
novation in existing firms--ultimately contri- to bring businesses and education in Europe education and careers in MST. The research step up and contribute—both for the benefit of
buting to employment growth. closer together. We can do this by creating suggests that today’s youth wish to study and Europe’s industry and the benefit of Europe’s
While the European Commission and practical business-education partnerships that work on something meaningful that fits with youth.
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NEW EUROPE Europe: Leading or Lagging? May - June 2011 33
Special Edition
LABOUR MARKET
Balancing regulation
and access to finance
Danny McCoy
Director General
Irish Business and Em-
ployers Confederation
Ireland is
many ways
a microcosm
of a wider European
problem and is paying a
high price for its
transparency in
acknowledging upfront
the scale of loan losses Professor Patrick Honohan (L) the governor of the Irish Central Bank and Matthew Elderfield (R) Head of Financial Regulation attends a press conference in Dublin, Ireland on 31 March
2011. The Irish Central Bank published on 31 the results of crucial stress tests on the Irish banks, which shows that the Republic of Ireland's banks need an extra 24 billion euros to survive
in its banks the financial crisis,. |EPA/ENDA DORAN
LABOUR MARKET
Ignacio Salinas
Communication Officer
at ThinkYoung
Graduating students look for jobs as they attend a special job fair for this year's graduates in Qingdao city, eastern China's Shandong provice, 10 February 2011. |EPA/WU HONG
By Ignacio Salinas learn, develop your skills and become speciali- 5 and 15 years of working experience, a techni-
EU WORLD
Sherif Kamel
In the
wake of the
Arab
uprising, spotlights are
turning to Egypt to
indicate the potential
for local and
international business
development and
foreign investment in
this new era Protesters in Tahrir square, Cairo, Egypt, 1 April 2011. But what next for Egyptian society? |EPA/MISAM SALEH
By Sherif Kamel main purposes: instructing current and fu- Innovation, and Development. hosted the Global Entrepreneurship Pro-
ture business leaders and strengthening Additionally, the School is working gram, a joint delegation of American and
SCHOOL OF BUSINESS IMPACT the regional business community. Student with startups to promote social responsi- Egyptian investors, entrepreneurs, and go-
In the wake of the Arab uprising, spotli- initiatives – clubs, like the Finance and bility and innovation in the renewable vernment leaders.
ghts are turning to Egypt to indicate the Investment Society; conferences, such as energy sector, and thereby prioritize its Far from being purely instructional in
potential for local and international busi- the International Conference on Global objective to produce business leaders and nature, the EIP’s philosophy is to engage
ness development and foreign investment Economy; and internships – facilitate in- ventures adaptable to ever-changing envi- faculty, students, alumni, extracurricular
in this new era. The American University tegration with the business sector. These ronmental and ecological factors. Some clubs, research centers, and business lea-
in Cairo’s (AUC) School of Business has activities empower students to produce, as of the issues addressed are the develop- ders in the problem-solving process. The
a long-standing tradition of cultivating well as consume, knowledge and intellec- ment of sustainable solutions for Egypt’s program helped facilitate the launch of
local and regional talent, nurturing com- tual content. School of Business alumni most pressing environmental challenges. AUC’s Entrepreneurs’ Society in 2003,
munity goals and objectives, and connec- – influential actors in local and interna- and has collaborated with other student
ting the Egyptian business community to tional business domains – exhibit consi- ENTREPRENEURSHIP AND organizations. For instance, in November
successful ventures abroad. stent commitment to reinvesting in the INNOVATION PROGRAM (EIP) 2010, an EIP mentoring program with
The School of Business introduced ra- School, as evidenced by its purposeful de- Launched in October 2010, EIP is the Students in Free Enterprise Egypt (SIFE)
dical changes to its structure, goals, and velopment, rising influence, and strong re- School’s cornerstone new initiative for hosted 700 students from 28 different
strategic planning in 2009 – improve- gional reputation. improving entrepreneurship in Egypt and Egyptian universities. This April, the EIP
ments intended to beget productive deve- Recognizing that providing access to the MENA region. The program re- helped launch the first-annual Cairo Star-
lopment in the long-term. School of new tools for innovation and ingenuity is sponds to the existing dearth of entrepre- tup Weekend – a marathon networking
Business dean Sherif Kamel’s agenda ad- essential for a thriving business sector, the neurial empowerment, as compared to and mentoring event for local entreprene-
vances three primary objectives: leader- School offers comprehensive executive available talent and ingenuity. According urs. 58 entrepreneurs participated for a 54
ship, innovation, and entrepreneurship; education programs. This relationship to Dean Kamel, EIP aims for a more hours weekend-long event sharing their
new programs and procedures based on between the AUC and the larger business straightforward and accessible path to ideas where they were also being mento-
these principles seek to yield ever-more community strengthens the sector as a success for Egyptian entrepreneurs, whose red by top calibers from the Egyptian en-
global-savvy graduates and executives. whole: executives and employees enroll to concepts “need fostering, supporting, trepreneurial society.
At its launch in February 2010, then- regularly update their skills and kno- mentoring, and nurturing, not just finan-
Provost Lisa Anderson (now the univer- wledge and the School accumulates va- cing.” BEYOND THE EGYPTIAN
sity’s president) highlighted the luable insight into local and regional Building on EIP’s inventiveness, SPRING
opportunity for the School of Business to businesses. AUC’s School of Business partnered with As a major source for constructive
“build on its role in producing and pro- TechWadi, a Silicon Valley-based non- commentary and research, the American
moting the next generation of innovative RESEARCH AND INNOVATION profit organization seeking to build brid- University in Cairo has and will act as a
and creative private-sector leaders in The School of Business’ research cen- ges between the U.S. and the Middle East key moderator for debating and discus-
Egypt and the region.” As such, AUC’s ters are also striving to meet the challen- and North Africa region, to support inno- sing socioeconomic change beyond the
capacity to transform political change into ges facing business development and vation and foster economic development Egyptian Spring. The School of Business
productive economic partnership with policymaking in this unprecedented era. in Egypt. Progress is on its way to esta- concurrently tapped into the past and an-
Europe and the MENA region in the co- Last year, the Access to Knowledge for blish a business incubator at AUC to be- ticipating the future, will help lead Egypt
ming years looks promising. Development Center (A2K4D), which come the center of the region’s to transforming political change into local
promotes universal rights to obtain and entrepreneurial ecosystem and will help and regional economic opportunity and
EDUCATIONAL LEADERSHIP produce intellectual content, published its accelerate the growth of hundreds of en- capitalizing on a wealth of youth passio-
Established as a separate School in first book, Access to Knowledge in Egypt: trepreneurial companies in the next three nate, energetic and eager to make a diffe-
1993, the School of Business serves two New Research on Intellectual Property, years. In its short tenure, the EIP has also rence.
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