Whatever happened to the Knowledge Economy in Europe?
Authors: Ian Brinkley
10 August 2011
The current focus on the financial crisis across the EU and the various austerity programmes has distracted from the equally important question – where is the growth and jobs to come from over the next decade? There is no long term solution to the private and public debt problems without a credible growth strategy.
We urgently need to balance the public debate and debates within national governments away from the obsessive focus on austerity packages to placate temporary panics in financial markets to developing credible long term growth strategies focused on innovation and investment.
In 2000 the EU then committed itself to become the most knowledge intensive economy in the world by 2010. But by the headline indicators adopted, the strategy was seen as having at best mixed results. References to the knowledge economy in EU statements become very sparse after 2009. The high level description of the current European Growth Strategy developed in 2010 hardly mentions the term.
However, over the past decade the EU Commission has behind the scenes developed a sophisticated and nuanced view on the future of Europe’s knowledge economy. This analysis and thinking still informs the new Growth Strategy even if the term knowledge economy has, it appears, fallen out of fashion at EU level.
By 2020 the strategy has to meet five high level targets in order to deliver “smart, sustainable and inclusive growth” by increasing the EU employment rate, increasing the share of GDP devoted to R&D to 3 per cent, reducing school-drop out rates and increasing completion rates for third level education; growing the low carbon economy; and reducing the numbers at risk from poverty.
However, the new strategy lacks an explicit overall objective – it must be to increase the EU’s sustainable economic growth rate by 2020 above where it is now. Secondly, even though the EU has rightly identified innovation as a key economic driver over the next decade there is only one high level target and it is the wrong target. There is a European Flagship Initiative for a 2020 Innovation Union but it is just one of seven “flagship initiatives”.
The innovation strand in the current Growth Strategy must take centre stage as the Flagship Initiative with some sensible and relevant targets. Innovation and investment must be at the heart of the European growth project. The Work Foundation’s new Big Innovation Centre, formally launching next month, has already started work on we need to do to make the UK a global innovation hub by 2025. We need a similar vision for the EU.
It would be a depressing experience, I suspect, to ask how many people, businesses, and organisations across Europe today even knew that the EU had a growth strategy in the first place, let alone what it was.
Maybe restoring the term “knowledge economy” could help. The term has instant international recognition and The Work Foundation’s knowledge economy programmes have demonstrated that it has substance: we are currently developing our third programme to take this work forward. The knowledge economy still defines the strategic direction Europe must follow over the next decade if it is to escape economic stagnation and high unemployment.
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