ACTIONS FOR COMPETITIVENESS

Haspar Avenue Henri

Spring: Europen quality-2001, ¹ 2.-18-22

The authors believe that most of these opinions arc widely shared within the business communirv but individuals may differ on specific subjects.

SPEED UP THE TRANSITION TO IMPROVED COMPETITIVENES THROUGH THE KNOWLEDGE ECONOMY

Europeans are in the process of constructing a "new Europe" on the foundations of improved competitiveness and a dynamic, knowledge-oased economy that will ultimately exend over a significantly lager group of countries than the present 15 members of the European Union Competitive advantage in the knowledge economy no longer relates purely to a product or service. Ir is much more dependent on the continuous acqoisition of new skills by people and companics and dting ahead of the competition in exploiting critikal knowledge.

The competitive pressures of globalisarion make the cask if building the Knowledge Economy an urgent one, to which the European Council meeting in Stockholm needs to whsgh fresh impetus. In particular, cargoes sca at Lisbon must be repectedand implemented. The European Round Table of In lustnalists therefore welcomies the Commission communication "Realising the urcpcan I'nion's Potentiaj:

Consolidating and Extending the Lisbon Sirategy. It contains recommendations for actions, ro lie agreed by the European Council ir. Stcdioll, which ue of paramount importance for Lipe.inveness.

Competitive advantage in the knowledge economy no longer relates purely to a product or service. It is much more dependent on the continuous acquisition of new skills by people and companies and being ahead of the competition in exploiting critical knowledge.

Our aim in this paper is to build on the Commission's recommendations and to urge the Council to tocus, in par:icular, on two .Lspects:

o the economic and social requirement for a "new Eu. oocean in the new Europe". Success in the Knowledge Economy will not be guaranteed just by teaching people technological skills. There is a brwder cultural requirement for entrepreneurship and r-k taking, and without it the EU's compel; Jveness could be seriously damaged within a matter of ten years;

o the looming crisis for ED business posed by the growing shortage of professionals ir. informaticn, communicat^n and other technologies'. This shortage is handicapping growth, innovation and ' productivity.

As an organis.ition whose key priority is to Strengthen European competitiveness, the ERT is warmly supporting the European Cuuncil's Lisbon strategy. However, bearing in mind tlie skills crisis ;ind she urgent neids ol the "new Europe", the ERT feels that a tighter focus :ind swifter progress is needed on four tundamcntally impu'tant casks that featured, with varying degrees of emphasis in tlie Lisbon conclusions. These are: .

o recasting national educational systems so thdt they enable everyone to acquire the new skills tliey need during a process of lifelong learning;

o encouraging employers to upgrade the skills of existing workforces;

o creating a friendly environment for innovation and entrepreneurship;

o reinventing government for the online era.

Faster progress will contribute to the evolution of the "new European". With (his in mind, we have set out ten specific recommendations designed ro carry the Union forward. We have our own ideas as to iiov these recommendations could be implemented. b-Jt recognise success depends crucially on the collaboration of governments, business, educationalists and acadcmia.

THE NEW EUROPEAN: A QUESTION OF ATTITUDE AS WELL AS OF SKILLS

The concept of the new European for the new Europe is important because i: focuses attention on a broader set of tactors than purely technical skills. These are extremely important and some of our recommendations are aimed a.' making f.ws that thcv find a quick and flexible entry into the curricula of all sci'ools in all Member Stares.

The new European needs more th.in skills ro make a success of the Knowledge Economy. He or she needs to be able to bring .i spirit ofntTpn.si. to lire a.s .in employee and ;i citizen. Not necessan.. in die sense of deveioping and pursuing business ideas, although Europe certainly needs more busnJSs entrepreneurs, bur definitely in terms of developing i capacity for creativity, innovation, flexibility, team work ird intellectual curiosity.

Such an individual must Ix: capable of taking charge of his or her employment destiny. Lifetime employment will nut soon disappear, but it "ill be less rcle'.ant for many people- In pursuing other preferences and opportunities, they will need. among other things, to be able to identify emerging emplo\ ment opportunities and to acquire the necessary training tor them.

THE COMPETITIVENESS CHALLENGE: AVOIDING A TRANSATLANTIC DIVIDE

Economic competitiveness tlie LS and Asian countries is the driver demanding a more urgent approach and faster progress towards tlie Knowledge Economy. In particular, tlie ED muse catch up with .ind overtake the United States in its application and exploitation of the new technologies. US successes have led to:

o a higher annual growth rate since 1W6: 3.4% compared with the EU's 2.0%;

o higher growth of labour productivity: 2.2% vs 1.3%;

o the much higr.iir share of its GDP claimed by IT production: 7% vs 4%;

o the global dominance of US technology producers -36 out of the world's top SO producers are from the VS and only four are European.

The keys co European success in applying the new technologies lie in the rich diversity of talent, culture, knowledge and skills to be found in the Member Stares.

TEN RECOMMENDATIONS FOR FAST TRACK PROGRESS TO IMPROVED COMPETITIVENESS THROUGH THE KNOWLEDGE ECONOMY

RECOMMENDATION I

Set precise targets for knowledge economy skills and attitudes to be acquired by the minimum school leaving age.

To be employable, people will soon need to be able to apply the tools of tlie Knowledge Economy, including competence in the use of a personal computer, ability to search the Internet a.id to h.indle .ind exchange information. Member States sliould promote debate to define tlie skills needed by the "new European", as well as tlie cultural requirements that encourage iniiov.;!i'.'e use of these skills; agree on the minimum sr.ind.:ids ot .itcainment (for example, in 1CT) to be met by all students at the minimum school leaving age; and repo t annually on their achievement

RECOMMENDATION 2

Harness the experience off business for the benefit of education. Many companies are ready aind anxious ro pass on their exteritivc experience of equipping employees to fulfil (heir ;i0tential through new skills .and approaches to learning. Governments should give priarity to building partnerships oit (lie level of individual schociis and companies for transferring learning systems. marcrLuis ind expertise inro tlie edu-cuional .i'.stem.

RECOMMENDATION 3

Begin the process of conferring a new status and value on the teaching profession.

The "new Euroix-an" will need a "new tocher" with higher skills and broader compctcnct"s and experiences to encour- s age intellectual cu. -)sity. teaim work, creativeness and a capacity to innovate It is the-rfore vital that the necessary investment is made in the teaiching profession throughout the European Unior.. in terms of competitive salaries, appropriate Staffing love's, and adequate training, in order to attract and retain highly qualmed and motivated personnel.

RECOMMENDATION 4

Create a European on-fine lifelong learning

The Internet offers a tremcndtaus opportunity for all citizensco be able to access new skills amd learning. Much of the content and training materials fcir an on-line service could be drawn from the business worlij where many companies now have a great deal of experience and expertise' that they would be very ready to pass ornro the general community.

RECOMMENDATION 5

Develop local and regional fora of representatives of government, education and business to define the short, medium and long-term skills requirements of leading economic sectors.

The EU's ability (o be a global winner in the Knowledge Economy will be severely weakened without the human resources needed. There is already acute concern in some sectors (e.g. aeronautics) about the future availability of necessary skills. Understanding the skills requirements across the future economy is very limited and urgently needs to be improved

RECOMMENDATION 6

Introduce tax benefits to encourage people to acquire the equipment and skills needed for the knowledge economy.

Personal training and reselling costs ought to be compensated via the tax system. A system is needed for granting temporary ownership rights to allow ideas to circulate and combine with others to generate economically and socially useful innovation

RECONMENDATION 7

Secure early adoption of the Commission Proposal to create a Community Patent. I.,, Additionally, give easily attained, short-tern* temporary intellectual property protection <" ideas that may generate economic and sod value after a process of pubfic discussion and interaction with other ideas.

The ERT welcomes the Commission proposal for the creation of a Community Patent, granted for and valid throughout the European Union. We urge agreement on this issue without further delay. Furthermore, action is needed to address the fear of loss of "ownership" which inhibits the Boating of ideas by entrepreneurs and other actual or potential innovators. A system is needed for granting temporary ownership rights to allow ideas ro circulate and combine with others (0 generate economically and socially useful innovation

RECOMMENDATION 8

Encourage business and academia to define online European processes for exchange of information leading to collaboration in the development and commercial exploitation of projects.

Harvest the learning and experience gained from fora such as the European Knowledge Management Forum and test heir applicability and usefulness in other areas, in order to levcrai the knowledge and talent in Europe.

RECOMMENDATION 9

Stimulate risk-taking and bring down the Cost of Capital in Europe at all levels

Move forward the process of financial integration in Europe as it is road-mapped in the final Lamfalussy report, especially where this relates co venture capital. Eliminate situations where tax treatment discourages investment in the form of venture capital. Encourage (lie E1B to continue to review its financial instruments in order to redirect funding towards support for business start-ups, as well as other risk capital initiatives.

RECOMMENDATION 10

Agree that each government produce a master plan, with' targets and timings, to ensure that the Knowledge Society beccmes part of every citizen's daily experiencp through electronic access to the full range of public services and information.

Information and Communication Technologies (ICT) nut only otter extraordinary possibilities tor transiurming governments and public administrations into more democratic and responsive mechanisms providing higher quality services. Thcv arc also a cool that govcrnm'JtitS can exploit to lead the way in implementing the Knowledge Economy and tlie Knowledge Society. They must access their requirements for equipment, content and services across rlic broadi range of functions and stimulate commercial responses 0 incct those requirements. Much can be done co speed up and encourage die transition ot entire electronic delivery of public information and sen-ices.