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An innovation deficit behind Europe’s overall productivity slowdown?

Reinhilde Veugelers' chapter in "Investment and Growth in Advanced Economies", conference volume of the European Central Bank’s Forum on central banking in Sintra.

By: Date: October 2, 2017 Topic: European Macroeconomics & Governance

This paper was published as a chapter of Investment and Growth in Advanced Economies, conference volume of the European Central Bank’s Forum

Europe maintains lofty ambitions for building its future prosperity and safeguarding its social model through innovation. An ambitious target of devoting 3% of GDP to R&D was already set in 2002. The same 3% was again targeted in the EU2020 strategy. Despite attention to innovation as a driver of growth and despite R&D targeting, Europe’s performance on innovation remains weak to date.

At the same time, Europe’s TFP growth continues to display a lacklustre performance. Rather than looking at productivity growth through the residual TFP construction, this contribution looks directly into the evidence on innovation as a potential source of productivity growth. We look at the evidence on an innovation deficit behind Europe’s overall productivity slowdown in Sections 1 and 2. Sections 3 and 4 try to get at why it is so hard to improve Europe’s innovative performance and identify some policy implications.

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External Publication

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Speakers: Chiara Criscuolo, Fabien Curto Millet, Jeffrey Franks, Jan De Loecker, Reinhilde Veugelers and Georgios Petropoulos Topic: Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: January 15, 2019
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Is the European automotive industry ready for the global electric vehicle revolution?

This Policy Contribution investigates the position of the European automotive industry in a scenario in which electrification substantially progresses. Europe cannot follow China in the adoption of centrally-planned industrial policy measures. But it certainly can and should do more to stimulate the transformation of its automotive industry through more ambitious policies.

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