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Europe 2020

The EU's growth strategy for the next decade

sabine lutz

on 6 November 2013

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Transcript of Europe 2020

The EU's growth strategy
for the coming decade

Europe 2020
Three mutually
reinforcing priorities:

Smart growth:
education (encouraging people to learn, study and update their skills)
research/innovation (creating new products/services that generate growth and jobs and help address social challenges)
digital society (using information and communication technologies)

Sustainable growth:
Inclusive growth:
Combined public and private investment levels to reach 3% of EU's GDP + better conditions for R&D and Innovation
75% employment rate for women and men aged 20-64 by 2020 –> by getting more people into work, especially women, the young, older and low-skilled people and legal migrants
Better educational attainment – in particular:
– reducing school drop-out rates below 10%
– at least 40% of 30-34–year-olds with third level education (or equivalent)
Digital agenda for Europe
Innovation Union
Youth on the move
Reboot EU's economy and help Europe's citizens and businesses to get the most out of digital technologies
Turn ideas into jobs, green growth and social progress
--> innovation in products, services and business models
Improve education and employment for young people
Resource efficient, greener and more competitive economy:
Building a more competitive low-carbon economy --> efficient, sustainable use of resources protecting the environment, reducing emissions and preventing biodiversity loss
Capitalising on Europe's leadership in developing new green technologies and production methods
Introducing efficient smart electricity grids
Harnessing EU-scale networks --> give businesses (especially small manufacturing firms) an additional competitive advantage
Improving the business environment, in particular for SMEs
Helping consumers make well-informed choices.
Reducing greenhouse gas emissions by 20% by 2020 (compared to 1990 levels) . Go further and reduce by 30% if other developed countries make similar commitments and developing countries contribute according to their abilities, as part of a comprehensive global agreement
Increasing the share of renewables in final energy consumption to 20%
Moving towards a 20% increase in energy efficiency
Industrial policy to support businesses – especially small businesses – as they respond to globalisation, the economic crisis and the shift to a low-carbon economy, by:
supporting entrepreneurship – to make European business fitter and more competitive
covering every part of the increasingly international value chain – from access to raw materials to after-sales service.
==> Working closely with business, trade unions, academics, NGOs and consumer organisations.
Resource-efficient Europe
Resource-efficient Europe
Support the shift towards a resource-efficient, low-carbon economy; economic growth must be decoupled from resource and energy use by:
reducing CO2 emissions
promoting greater energy security.
reducing the resource intensity of what we use and consume

raising Europe’s employment rate – more and better jobs, especially for women, young people and older workers
helping people of all ages anticipate and manage change through investment in skills & training
modernising labour markets and welfare systems
ensuring the benefits of growth reach all parts of the EU
High-employment economy delivering economic, social and territorial cohesion:
75% employment rate for women and men aged 20-64 by 2020– achieved by getting more people into work, especially women, the young, older and low-skilled people and legal migrants
Better educational attainment – in particular:
– reducing school drop-out rates below 10%
– at least 40% of 30-34–year-olds completing third level education (or equivalent)
At least 20 million fewer people in or at risk of poverty and social exclusion
Agenda for new skills and jobs
European platform against poverty
For individuals: helping people acquire new skills, adapt to a changing labour market and make successful career shifts
Collectively: modernising labour markets to raise employment levels, reduce unemployment, raise labour productivity and ensuring the sustainability of our social models
Ensuring economic, social and territorial cohesion
Guaranteeing respect for the fundamental rights of people experiencing poverty and social exclusion, and enabling them to live in dignity and take an active part in society
Mobilising support to help people integrate in the communities where they live, get training and help to find a job and have access to social benefits

Regional development and investment also support inclusive growth by helping disparities among regions diminish and making sure that the benefits of growth reach all corners of the EU.
1. Employment
Europe’s workforce is shrinking as a result of demographic change –a smaller workforce is supporting a growing number of inactive people.
The EU must increase its overall employment rate: The employment rate is particularly low for women (63% against 76% for men aged 20-64) and older workers, aged 55-64 (46% against 62% in the US and Japan). Europeans work short hours – 10% less than their US or Japanese counterparts.
The economic crisis has brought high youth unemployment – over 21% – and made it harder for out-of-work people to find jobs.
2. Skills
The EU has around 80 million people with low or basic skills – benefiting less from lifelong learning than more educated people.
By 2020, 16m more jobs will require high qualifications, with 12m fewer jobs requiring low skill-levels.
Acquiring and building on new skills is ever more important.
3. Fighting poverty
Even before the crisis, there were 80m people at risk of poverty, including 19m children.
8% of working people do not earn enough to make it above the poverty line.
Why does Europe need inclusive growth?
1. Over-dependence on fossil fuels
leaves consumers and businesses vulnerable to harmful and costly price shocks,
threatens our economic security
contributes to climate change.
2. Natural resources
Global competition for natural resources will intensify and put pressure on the environment. The EU can help reduce these pressures through its sustainable development policies.
3. Climate change
To achieve our climate goals, we need to reduce emissions more quickly and harness new technologies such as wind and solar power and carbon capture and sequestration.
We must strengthen our economies' resilience to climate risks, and our capacity for disaster prevention and response.
4. Competitiveness
The EU needs to improve its productivity and competitiveness. It must maintain its early lead in green solutions, especially in the face of growing competition from China and North America.
Meeting our energy goals could save €60 billion on Europe's bill for oil and gas imports by 2020 – essential for both energy security and economic reasons.
Further integration of the European energy market can boost GDP by 0.6% to 0.8%.
Meeting 20% of Europe's energy needs from renewable sources could create over 600 000 jobs in the EU – and an additional 400 000 if we meet the 20% energy-efficiency target.
Our emission-reduction commitments should be met in a way that maximises benefits and minimises costs – including through the spread of innovative technological solutions.
Why does Europe need sustainable growth?
1. Europe's lower growth than its main competitors is largely due to a productivity gap caused in part by:
lower levels of investment in R&D and innovation
insufficient use of information/communications technologies
difficult access to innovation in some sections of societ
For example:
European firms currently account for just a quarter of the €2 trillion global market for information/communication technologies.
Slow implementation of high-speed internet affects Europe's ability to innovate, spread knowledge and distribute goods and services, and leaves rural areas isolated.
2. Education/training
Some 25% of European school children have poor reading skills
Too many young people leave education/training without qualifications
Numbers attaining medium-level qualifications are better, but the qualifications often fail to match labour market needs
Under a third of Europeans aged 25-34 have a university degree (40% in the US, over 50% in Japan)
European universities rank poorly in global terms – only 2 are in the world top 20 (see Shanghai index (ARWU))
3. Ageing populations
As Europeans live longer and have fewer children, fewer people in work have to support higher numbers of pensioners, as well as fund the rest of the welfare system.
The number of over-60s is now increasing twice as fast as it did before 2007 – by some 2 million a year instead of 1 million previously.
A better knowledge economy with more opportunities will help people work longer and relieve the strain.
Why does Europe need smart growth?
reform targets:

Target 5- Climate change and energy
To reduce greenhouse house emissions by at least 24 per cent compared to 1990 levels
To increase the share of renewable energy to 15 per cent by 2020.
Over the period the Government will also act to enhance the energy efficiency of homes, business and transport.

Target 3- Education and training
Required growth 2010-2020:
Percentage of 30-34 year-olds with a tertiary degree: 2,6
Percentage of early school leavers: -2,4
Target 1- Employment
To raise to 69-71% the employment rate for women and men aged 20-64, including through the greater participation of young people, older workers and low-skilled workers, and the better integration of legal migrants,
To review the target level of ambition in 2014, in the context of a proposed mid-term review of the Europe 2020 Strategy.
Target 2- Research and innovation
To spend 2.5% of gross domestic product on research and development (R&D) by 2020.
To broaden the R&D tax credit scheme by introducing a €250 million RDA, rising to €500 million in 2014.
Target 1- Labour market
To increase labour participation (20- to 64-year-olds) to 80% by 2020. (In 2011 labour participation was about 76%.)
At the latest in 2019 a statutory retirement age of 66 years, at the latest in 2024 a retirement age of 67 years;
Work Capacity Act (WWNV) (Wet Werken naar Vermogen)
Aligning education and the labour market
Measures to encourage both MBO and higher education institutions to develop a more distinct profile and strengthen the relevance of their courses to the labour market.
Target 5- Social inclusion
To reduce the number of people (aged 0 to 64 -- compared to 0 to 59 at EU level) in a jobless household by 100,000 by 2020.
Target 3- Energy, climate and mobility
To cut CO2 emissions by 20% by 2020
To attain 14% renewable energy in 2020.
Seek to increase energy efficiency but not setting a quantitative target.
Target 4- Education
Max. 8% young people aged 18 to 24 without basic qualifications .
By 2020 at least 40% people completing higher education (in NL, the EU target of 40% already exceeded).
By 2020, 45% of 30- to 34-year-olds will be graduates.
The government will continue to implement policy to improve the quality of education.
Target 3- Climate Change
To reduce greenhouse gas emissions in the non-traded sector by 20% compared to 2005 levels;
To increase the share of renewables in final energy consumption to 16% by 2020;
To move towards a 20% increase in energy efficiency.
Target 2- Research and Development
To Improve the conditions for research and development, in particular with the aim of raising combined public and private investment levels in this sector to 2.5% of GNP (approximately equivalent to 2.0% of GDP).
Target 5- Poverty
To reduce the number experiencing consistent poverty to between 2-4% by 2012, with the aim of eliminating consistent poverty by 2016, which will lift at least 186,000 people out of the risk of poverty and exclusion.
Target 4- Education
To reduce the percentage of 18-24 year olds with at most lower secondary education and not in further education and training to 8%;
To increase the share of 30-34 year olds who have completed tertiary or equivalent education to at least 60%.
Target 1- Employment
To increase employment opportunities for all by providing support mechanisms and benefits systems that incentivise work and reduce worklessness, to ensure that individuals can fulfill their potential within the labour market.
Employment is a reserved power to Parliament.
Target 2- Education
To undertake reforms to improve schools and help reduce the number of young people not in education, employment or training.
To expand and improve the quality of the apprenticeships programme, enabling individuals to choose the learning pathway that will help them achieve their goals.
Education and skills are a devolved competence, with each of the administrations making their own policy decisions.

Target 3- Social exclusion
To make wide-ranging social reforms, including
transforming children’s life chances, reforming welfare systems, improving education, increasing
social mobility and tackling child poverty.
The UK Government is responsible for policies in this area in England.
Target 4- R&D and innovation
To improve the framework conditions for research and innovation to facilitate greater private sector investment over the period.
Research policy is a partly reserved matter under the UK's devolution settlements.
Target 5- Poverty
To reduce poverty by one third by 2012
To reassess this target in light of the progress achieved
Target 1- Employment
To achieve an employment rate of 75% for the population aged 20 to 64
To promote jobs and continuing employment for the youngest and oldest members of the labour force
Women: specific sub-target of 70% between 20 and 64 by 2020.
Target 2- R&D
R&D expenditure represents 3% of GDP by 2020

Target 3- Energy and climate
To reduce greenhouse gas emissions by 14% in sectors outside the EU ETS Phase III,
To increase the share of renewables to 23% of final energy use
To indicatively reduce final energy use to approximately 130 MTOE.
Target 4- Education
To reducing the school dropout rate to 9.5%
To achieve a rate of higher education attainment of 50% in the population aged 17 to 33.
Target 1- Employment
In a no-policy change scenario, an employment rate of 70.3% is expected
Required job creation 2010-2020 --> women: 348.000, 55-64: 271.000
Participation to lifelong learning is insufficient in Belgium.
Flemish Region encouraged the development of a partnership between the various actors both on the labour market and in the educational field.
In BrusselsCapital Region the budget financing the language vouchers system has been increased.
Wallonia invests in the targeted strengthening of the training offer
Target 2- R&D and innovation
In the 2011 National Reform Program (NRP), Belgium set the target to raise R&D expenditure to 3% of GDP.
Target 5- Social inclusion
By 2020 (data 2018), Belgium wants to reduce the number of people at risk of poverty or social exclusion by at least 380.000 people, compared to 2008 (‐17%).
Target 4- Energy and climate
Required change 2009-2020:
Non-ETS greenhouse gasses: -8.1
Share renewable energy (%): 8.5 pp
Primary energy consumption: -7.4

Target 3- Energy and Climate
To reduce emissions by 21% with respect to 2005 for sectors subject to emissions trading system.
For diffuse sectors, 10% reduction with respect to 2005 (the same as for Europe as a whole).
Renewables: A target for a 20% share of final energy consumption (10% in the transport sector).
Energy efficiency:
A target reduction of two percentage points in energy intensity in terms of final energy ==> 20% decline by 2020 with respect to 2009;
In terms of primary energy consumption, it is a reduction of close to 25.2 Mtoe with respect to the baseline projection for 2020.
Target 1- Employment
An employment rate of 74% for the population aged 20 to 64 by 2020, with a sub-target of 68.5% for the female employment rate in the same age group in 2020.
The intermediate objective (for 2015): an employment rate of 66% (it was 62.5% in 2010).
Target 2- R&D and innovation
To increase R&D spending to 3% of GDP by 2020, two-thirds from the private sector (2% of GDP) and one-third from the public sector (1% of GDP).
Target 5- Poverty and Social Inclusion
To reduce by 1.4-1.5 million (in 2009-2019) the number of people at risk of poverty or social exclusion.
The reduction is linked to achieving the employment and education targets
Target 4- Education
To attain a 15% early school leaving rate by 2020, compared with the latest available figure of 31.2% in 2009.
Intermediate objective for 2015: Attain a rate of 23%.
44% of young people with tertiary education by 2020.
Intermediate objective for 2015: Attain a rate of 41%.
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