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Competitiveness & Creativity
In the light of the Lisbon strategy
Dr. Risto E. J. PenttiläDirector, Finnish Business and Policy Forum EVA
We all know the Lisbon Goal:
• To make Europe “the most competitive and dynamic knowledge-based economy in the world” by 2010
• Agreed by the European Council in March 2000
This, of course, did not happen but…
• It is supposed to be funny since nobody believes that six months is going to do the trick
So what will do the trick?
• Is there a new way of making cities, countries and regions competitive?
Richard Florida:
• The competitiveness of nations will be determined by their ability to attract and retain talented people
• He speaks about a new ”CREATIVE CLASS” [link]
USA has the largest ”creative class”
• USA: 30% of workforce• The Netherlands, Belgium and
Finland: almost 30%• The UK, Ireland, Denmark:
around 25%• Other EU: around 20%• Laggards: Italy and Portugal:
around 15% (Portugal rising)
”Creative Class” sounds suspicously Marxist…
• Otherwise he seems to have a point
• At least there is a lot of anecdotal evidence that creativity and competitiveness go hand in hand…
My purpose is to answer two questions:
First:
Can creativity be
a cure for
Europe’s lack of
competitiveness?
My purpose is to answer two questions:
First:
Can creativity be
a cure for
Europe’s lack of
competitiveness?
Second:
Is creativity an alternative to the Lisbon strategy?
The European Round Table of Industarialists* has been very critical…
*The ERT is a forum of c. 45 leaders of large, internationally operating companies of European parentage
The list of problems is long:
• The Single Market has not been completed
• Resistance to change and unwillingness to take risks
• over-regulation, taxation and administrative disincentives,
• lack of entrepreneurship, rigid labour market rules
• People work too little (per year and during life time)
But even the ERT sees progress:
• Productivity in some areas has caught up with the USA
• The new Commission seems to have the right prioritities (and the right composition)
How about the OECD?
Long-term prognosis:• EU growth will average 1,2 %
per year until 2025• This is not enough to maintain
current levels of employment
Goldmann Sachs:
• Asia will have overtaken Europe by 2050
• BRIC countries (Brazil, Russia, India and China) and the USA will dominate
• The best EU member state will be the UK (number 7)
The World Economic Forum*
The Lisbon Review 2004:• ”Much has yet to be done within a
number of EU countries, across all dimensions, in order to bring them to the level of competitiveness intended by the Lisbon Declaration.”
* Members are 1000 leading companies in the world
Wim Kok’s High Level Group*:
• “There are sufficient grounds for Europe to be seriously worried about its medium to long run growth path and this concern should provoke a significant policy response.”
* High Level Group on the Lisbon Strategy, 26 May 2004
Perhaps…
• According to some estimates creative industries are more important to the City of London than financial services
But let us not jump to conclusions
Two questions:
1. What do we talk about when we talk about creativity and economic growth?
2. Is creativity an alternative to the Lissbon strategy?
We talk about three common-sense things:
1. Art as business: i.e. less state subsidies, more
entrepreneurship2. Business as art how to manage business,
how to undestand markets3. Creative cities how to attract creative people
and (with them) investments
It is reasonable to argue that
These three dimensions taken together promote growth in a given city or an industry
Should be encouraged
What is the relationship between Lisbon strategy and creativity?
Are they alternatives?
Can we forget the Lisbon goals and concentrate on ”creativity”?
Lisbon stategy includes measures to promote creativity
It calls for:• Developing a European area
for innovation, research and development
• More Liberalization• Building network industries• Improving the enterprise
environment
Indeed…
• The same countries that rank high in achieving Lisbon goals are on top of Europe’s creativity list
The top countries are:
Lisbon:• Finland• Denmark• Sweden• UK• Netherlands• Germany
Creativity:• Sweden• Finland• Netherlands• Denmark• Belgium• Ireland
PS1.
Florida claims that ”the epicentre of Competitiveness” in Europe is changing.
• Old: France, Germany, UK• New: Northern Europe (plus
Ireland and UK)Is this view correct? Looking at
the two rankings, the answer seems to be ’yes”.
PS2.
Florida argues in Harvard Business Review* that
• America is faced with a ”looming creativity crisis”
• The reason is new visa requirements that discourage the inflow of talents
Will Europe benefit?*HBR, October 2004