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SOURCE The Conference Board
To Revive Productivity and Avert Long-term Stagnation, the E.U. Must Make Good Its Digital Deficit
NEW YORK, May 22, 2014 /PRNewswire/ -- Information and Communications Technology (ICT) should hold the key to rescuing Europe from a bleak economic fate, reports Productivity and Digitalization in Europe: Paving the Road to Faster Growth, a special joint publication of The Conference Board and The Lisbon Council. The policy brief was authored by Bart van Ark, Chief Economist at The Conference Board, who will be presenting his findings today at the Europe 2020 Summit in Brussels. The event features keynote addresses by Jose Manuel Barroso, European Commission President, and Neelie Kroes, European Commissioner Vice-President and Commissioner for Digital Agenda.
The report argues that a better use of ICT could provide a significant upside to an otherwise anemic projection of just 1.4 percent annual GDP growth for the EU-28 between 2014 and 2019, which is down from the pre-2008 average of 2.6 percent. "The most powerful way to improve structural growth conditions in Europe is to strengthen productivity growth," said van Ark. "Maximizing the contribution of digitalization to these gains could accelerate the EU's growth rate to 2 percent."
According to the policy brief, the root cause of Europe's weak growth outlook is not just the aftermath of the global financial and economic crisis. In fact, 2014–19 growth in the United States is expected to average a comparatively healthy 2.4 percent. The E.U.-U.S .discrepancy can be traced to a combination of slower demographic developments, weaker investment, and less productivity growth. The slowing productivity trend in Europe, which has been on the decline in the E.U. for nearly 30 years can be traced directly to the weaker role of technology: Since the 1990s, ICT has accounted for a much smaller percentage of total investment, and the productivity which Europe obtained from ICT was much lower than in the U.S.
"Like steam power and electricity before it, ICT is a true general-purpose technology," said van Ark. "Its initial impacts on productivity are concentrated in a narrow range of applications and industries. But as digitalization spreads, the uses compound and proliferate through scale and network effects, ultimately delivering disproportionately large benefits to societies positioned to take advantage. This underlines the urgency of developing smart policy now, at the E.U.-level."
Among the policy brief's key findings:
For complete details:
Report: Productivity and Digitalization in Europe: Paving the Road to Faster Growth
By Bart van Ark
About The Conference Board
The Conference Board is a global, independent business membership and research association working in the public interest. Our mission is unique: To provide the world's leading organizations with the practical knowledge they need to improve their performance and better serve society. The Conference Board is a non-advocacy, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. www.conference-board.org
About The Lisbon Council
The Lisbon Council for Economic Competitiveness and Social Renewal asbl is a Brussels-based think tank and policy network. Established in 2003 in Belgium as a non-profit, non-partisan association, the group is dedicated to making a positive contribution through cutting-edge research and by engaging politicians and the public at large in a constructive exchange about Europe's economic and social future. Its website is www.lisboncouncil.net.
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