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FT: "Europe trails US in competition . . ."
by: unibitri
4470 of 4472
AFTER OBSERVING ERICY's MARKET BEHAVIOR VIS-A-VIS ETSI, ETC.., THE FOLLOWING ARTICLE IS NO SURPRISE
TO ME.
COMPETITIVENESS: Europe outpaced by US
By Emma Tucker in Brussels
http:\\www.ft.com
Europe lags behind the US on virtually all measures of competitiveness, according to a report that will make grim reading for EU industry
ministers meeting in Brussels today.
The report highlights the European Union's inability to create new jobs as quickly as the US and Japan, its poor response to innovation, a
lack of risk capital and the high cost of labour.
It was written for the European Commission by a consortium of consultants from six EU countries, and will be presented to ministers as part
of a general discussion on EU competitiveness.
The report concludes that the standard of living in the EU, measured as gross domestic product per capita, is 33 per cent lower than in the
US and 13 per cent lower than in Japan.
One of the main reasons for this is the EU's failure to create new jobs by moving swiftly into promising new sectors. "Where the US has
created jobs in technically advanced industries and transformed itself into a service economy, Europe is lagging behind," the report says.
The report forms part of the continuing debate in Europe about how to cut record unemployment, and will strengthen the hand of those
arguing for greater flexibility in labour markets and less regulation.
"In spite of the single market programme and its effects on competition and liberalisation, Europe still has more restrictions and distortions of
competition in service industries than the US," it says.
A similar report two years ago provoked a row inside the Commission between its non-interventionist camp, which argued that
over-protected labour markets cost Europe jobs, and the opposite camp defending Europe's social model.
Europe's poor employment performance is weaker not just in new high-tech industries, but across the board, say the report's authors. "This
suggests that Europe's problems lie in the general business environment rather than in the weak performance of individual branches of the
economy."
A lack of adequate risk capital, essential for high growth, in technology-oriented companies adds to Europe's employment problems. The
report argues that the competitive position of such companies in the EU is undermined by inefficiently-priced financial services and restricted
access to capital markets.
It concludes by saying EU governments should: (1) eliminate institutional and regulatory barriers; (2) ensure continuous upgrading of
European industry; (3) move away from targeting individual industries with subsidies or strategic trade arrangements [??ERICY??]; (4)
diffuse best practice--the report uncovered huge disparities in labour productivity in the EU.
Posted: Nov 16 1998 3:56PM EST as a reply to: Msg 4466 by oldbio
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