1 Europe 2020 Strategy Brussels, 24 March 2010 Ulrik Mogensen Secretariat General.

11

EuropeEurope 2020 2020 StrategyStrategy

Brussels, 24 March 2010Brussels, 24 March 2010

Ulrik MogensenUlrik MogensenSecretariat General Secretariat General

22

ChallengesChallenges

Crisis (deficits/debts, unemployment)Crisis (deficits/debts, unemployment) Globalisation (spill overs from trade, euro, Globalisation (spill overs from trade, euro,

finance)finance) Ageing Ageing Climate changeClimate change Energy dependencyEnergy dependency Knowledge (education and research)Knowledge (education and research) Social cohesionSocial cohesion

33

Where Europe stands now ?Where Europe stands now ?The crisis has wiped out recent progress:The crisis has wiped out recent progress:

GDP growth:GDP growth: - 4% in 2009, worst since the 1930s- 4% in 2009, worst since the 1930s

Industrial production:Industrial production: - 20% with the crisis, back to the 1990s- 20% with the crisis, back to the 1990s

Unemployment levels:Unemployment levels:

23 million people23 million people 7 million more unemployed in 20 months 7 million more unemployed in 20 months expected to reach 10.3% in 2010 (back to 1990s level) expected to reach 10.3% in 2010 (back to 1990s level) youth unemployment over 21%youth unemployment over 21%

44

Young people are particularly at riskYoung people are particularly at risk

Youth unemployment reached 21.4% in December 2009, an increase Youth unemployment reached 21.4% in December 2009, an increase by 7 percentage points since March 2008.by 7 percentage points since March 2008.

5

Background Information for the Informal European Council, 11 February 2010

Youth unemployment rate (%)

14

15

16

17

18

19

20

21

22

23

24

2005

Jan

2005

May

2005

Sep

2006

Jan

2006

May

2006

Sep

2007

Jan

2007

May

2007

Sep

2008

Jan

2008

May

2008

Sep

2009

Jan

2009

May

2009

Sep

% o

f la

bo

ur

forc

e 1

5-2

4

Total Men Women

2009

Dec

55

Industrial production declined sharplyIndustrial production declined sharply

Industrial production fell by 20% compared to its peak in 2008 to reach a level not seen Industrial production fell by 20% compared to its peak in 2008 to reach a level not seen since the 1990s. It has now stabilised and is beginning to increase, although the recovery since the 1990s. It has now stabilised and is beginning to increase, although the recovery is still fragile.is still fragile.

6


Manufacturing and construction outputs

70,00

80,00

90,00

100,00

110,00

120,001

99

3M

01

19

93

M0

71

99

4M

01

19

94

M0

71

99

5M

01

19

95

M0

71

99

6M

01

19

96

M0

71

99

7M

01

19

97

M0

71

99

8M

01

19

98

M0

71

99

9M

01

19

99

M0

72

00

0M

01

20

00

M0

72

00

1M

01

20

01

M0

72

00

2M

01

20

02

M0

72

00

3M

01

20

03

M0

72

00

4M

01

20

04

M0

72

00

5M

01

20

05

M0

72

00

6M

01

20

06

M0

72

00

7M

01

20

07

M0

72

00

8M

01

20

08

M0

72

00

9M

01

20

09

M0

7

year

ind

ex (

2005

=10

0)

Manufacturing output Construction output

66

Global competition is fierceGlobal competition is fierce

The EU benefits from being one of the most open economies in the The EU benefits from being one of the most open economies in the world, but its external position is eroding. world, but its external position is eroding.

15


Export share (% world exports)

-

5,0

10,0

15,0

20,0

25,0

EU US Japan China India

1996 2007

77

First baby-boom cohort: age 64 in 2010

Our demographic path is known Our demographic path is known

Baby-boomers start retiring. This marks the end of the demographic dividend, i.e. the fact Baby-boomers start retiring. This marks the end of the demographic dividend, i.e. the fact that the working age cohorts were particularly large compared to the rest of the that the working age cohorts were particularly large compared to the rest of the population.population.

19


Population by sex and age on 1. January of each year

88

Old-age dependency will rise fastOld-age dependency will rise fast

The old-age dependency ratio – the ratio of people above retirement age for each person The old-age dependency ratio – the ratio of people above retirement age for each person in active age – is rising fast and would almost double by 2060 if current demographic and in active age – is rising fast and would almost double by 2060 if current demographic and retirement patterns persist. retirement patterns persist.

21


Old-age dependency ratios under four retirement age assumptions (59, 63, 66 and 69 year-old)

99

Raising our levels of R&DRaising our levels of R&D

In spite of our 3% target, there has been little progress on R&D spending since In spite of our 3% target, there has been little progress on R&D spending since 2000. The EU is particularly lagging in terms of private R&D spending.2000. The EU is particularly lagging in terms of private R&D spending.

33


Expenditure on R&D (% GDP)

EU Japan US

1010

Matching the pace of competitionMatching the pace of competition

The EU Framework Programme for Research (FP7) invests about The EU Framework Programme for Research (FP7) invests about 1.3 billion € in ICT R&D every year. In 2009, “Google” invested 1.3 billion € in ICT R&D every year. In 2009, “Google” invested 2.843 billion USD - the equivalent of 2 bn € - in R&D. 2.843 billion USD - the equivalent of 2 bn € - in R&D.

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Investment in ICT R&D in 2009 (billions €)

Google

EU FP7

0

0,5

1

1,5

2

2,5

1111

Investing in our students and universitiesInvesting in our students and universities

Total spending on tertiary education in the EU (as a % of GDP) is less than Total spending on tertiary education in the EU (as a % of GDP) is less than half the US level, mainly as a result of lower private spending in Europe.half the US level, mainly as a result of lower private spending in Europe.

36


Expenditure on tertiary education (% GDP)

0

0,5

1

1,5

2

2,5

3

3,5

EU Japan US

% G

DP

Private

Public (direct)

1212

Broadening access to tertiary educationBroadening access to tertiary education

Today in the EU, less than one person in three aged 25-34 has completed a Today in the EU, less than one person in three aged 25-34 has completed a university degree, compared to more than 50% in Japan and 40% in the US.university degree, compared to more than 50% in Japan and 40% in the US.

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Share of population aged 25-34 with tertiary education

0

10

20

30

40

50

60

EU USA Japan

1313

Taking up the global fight for knowledgeTaking up the global fight for knowledge

While the EU has 40% of the universities in the top 500 of the Shanghai ranking, the While the EU has 40% of the universities in the top 500 of the Shanghai ranking, the top end is clearly dominated by the US top end is clearly dominated by the US (17 of the top 20 institutions are located in the US).(17 of the top 20 institutions are located in the US).

38


Share in the top institutions of the 2009 Shangai list

0

10

20

30

40

50

60

70

80

90

EU Japan USA

Top 500Top 100

Top 20

1414

Combating risks of poverty Combating risks of poverty

Almost 80 million Europeans (17%) were at risk of poverty before the crisis. 19 million of these are Almost 80 million Europeans (17%) were at risk of poverty before the crisis. 19 million of these are children. 8% of people in work don’t earn enough to escape from it. Women, the young, the elderly, children. 8% of people in work don’t earn enough to escape from it. Women, the young, the elderly, people on precarious contracts and migrants are especially exposed.people on precarious contracts and migrants are especially exposed.

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At-risk-of-poverty rates by groups in the EU, 2005-2008

0

5

10

15

20

25

30

35

40

45

2005 2006 2007 2008

Unemployed: 44%

Children: 20%

Elderly: 19%

Total: 17%

Employed: 8%

1515

Tackling early school-leaving Tackling early school-leaving

Today, one in seven young people (18-24) leave school early Today, one in seven young people (18-24) leave school early (6 million dropouts in EU 27). The rates are declining too slowly, and several Member (6 million dropouts in EU 27). The rates are declining too slowly, and several Member States are lagging behind.States are lagging behind.

42


Share of population aged 18-24 with at most lower secondary education and not in further education or training

0

10

20

30

40

50

60

Worst performer inEU

EU average Best performer in EU

2000 2008

Benchmark (10%)

1616

The PISA survey rang the alarm bell The PISA survey rang the alarm bell

One in four 15 year-old has poor reading competences. The EU average is One in four 15 year-old has poor reading competences. The EU average is declining. Migrant populations succeed better in Canada and Australia.declining. Migrant populations succeed better in Canada and Australia.

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Share of pupils with poor reading competences

12,4

9,6

5,7

17,9

10,1

21,3

13,4

11

5,8

19,4

18,4

24,1

0 5 10 15 20 25 30

Australia

Canada

Korea

USA

Japan

EU

Benchmark 2010

17

1717

Investing in human capital pays offInvesting in human capital pays off

If, over the next 20 years, student performance in each If, over the next 20 years, student performance in each country would improve to reach the level achieved by Finland country would improve to reach the level achieved by Finland today…today…

… … the effect on GDP by 2090 (the lifetime of the generation the effect on GDP by 2090 (the lifetime of the generation born in 2010) will be:born in 2010) will be:

+ 606% for the OECD, + 606% for the OECD, and between and between + 177% (NL) and + 177% (NL) and + 1073% (EL) for EU countries + 1073% (EL) for EU countries

Source:Source: OECD 2010 “The High Costs of Low Educational Performance: The long-run OECD 2010 “The High Costs of Low Educational Performance: The long-run economic impact of improving PISA outcomes”. economic impact of improving PISA outcomes”.

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1818

Green growth creates new jobs Green growth creates new jobs

Jobs in the eco-industry have increased by 7% every year on average since 2000 to reach Jobs in the eco-industry have increased by 7% every year on average since 2000 to reach 3.4 million. Achieving the 2020 renewable target could deliver 2.8 million jobs in the 3.4 million. Achieving the 2020 renewable target could deliver 2.8 million jobs in the renewable energy sector in total.renewable energy sector in total.

55


Employment in EU eco-industry (thousands)

1919

The case of automotive production The case of automotive production

Given GDP and population growth across the world, the global vehicle Given GDP and population growth across the world, the global vehicle park will increase from the current 800 million vehicles to about park will increase from the current 800 million vehicles to about 2 billion by 2030-2035. How many of these will be «green» and 2 billion by 2030-2035. How many of these will be «green» and produced by European firms?produced by European firms?

61


Global vehicle park – number of vehicles

2020

Europe’s structural weaknesses have been exposed:Europe’s structural weaknesses have been exposed: lower growth potential, lower growth potential, productivity gap, high and rising unemployment, ageing, limited fiscal roomproductivity gap, high and rising unemployment, ageing, limited fiscal room

Global challenges intensify:Global challenges intensify: competition from developed and emerging economies, global competition from developed and emerging economies, global finance, climate change and pressure on resourcesfinance, climate change and pressure on resources

• President Barroso President Barroso ““ The crisis is a wake-up call ... ‘business as usual’ would The crisis is a wake-up call ... ‘business as usual’ would

consign us to a gradual decline” consign us to a gradual decline” (Communication, 3 March 2010)(Communication, 3 March 2010)

Europe 2020: EU after the crisis (i)Europe 2020: EU after the crisis (i)

212121

Europe 2020: EU after the crisis (ii)Europe 2020: EU after the crisis (ii) Europe needs to be back on trackEurope needs to be back on track : our short term priority is a successful : our short term priority is a successful

exit from the crisisexit from the crisis

Whilst taking a long-term vision: Whilst taking a long-term vision: where Europe should be in 2020 – no where Europe should be in 2020 – no time to waste to face challengestime to waste to face challenges

• Therefore, a new strategy “Europe 2020” to return to Therefore, a new strategy “Europe 2020” to return to growth, but not same – unsustainable – growth, rather: growth, but not same – unsustainable – growth, rather:

- ‘‘smart’, sustainable and inclusive growthsmart’, sustainable and inclusive growth- translating into high employment and social & territorial translating into high employment and social & territorial

cohesioncohesion

222222

Europe 2020: delivering reformsEurope 2020: delivering reforms

3 thematic 3 thematic prioritiespriorities

5 EU headline 5 EU headline targetstargets – translated into national ones – translated into national ones 7 7 flagshipflagship initiatives – EU & national action initiatives – EU & national action Mobilising existing EU Mobilising existing EU instrumentsinstruments::

• Single market Single market • External dimensionExternal dimension• SGPSGP• EU and national Budgets & new financing instrumentsEU and national Budgets & new financing instruments

232323

Europe 2020: 3 interlinked prioritiesEurope 2020: 3 interlinked priorities

1.) 1.) Smart growthSmart growth:: developing an economy based on developing an economy based on knowledge and innovationknowledge and innovation

2.) 2.) Sustainable growthSustainable growth: : promoting a more efficient, promoting a more efficient, greener and more competitive economygreener and more competitive economy

3.) 3.) Inclusive growthInclusive growth: : fostering a high-employment fostering a high-employment economy delivering social and territorial cohesioneconomy delivering social and territorial cohesion

2424

Europe 2020: 5 EU headline targets Europe 2020: 5 EU headline targets (translated into national targets)(translated into national targets)

By 2020:By 2020: 75 % 75 % employmentemployment rate (% of population aged 20-64 years) rate (% of population aged 20-64 years)

3% investment in 3% investment in R&DR&D (% of EU’s GDP) (% of EU’s GDP)

““20/20/20” 20/20/20” climate/energyclimate/energy targets met (incl. 30% emissions targets met (incl. 30% emissions reduction if conditions are right)reduction if conditions are right)

< 10% < 10% early school leaversearly school leavers & min. 40% hold & min. 40% hold tertiary degree tertiary degree

20 million less people should be at 20 million less people should be at risk of povertyrisk of poverty

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Europe 2020: 7 flagship initiatives Europe 2020: 7 flagship initiatives underpin the targetsunderpin the targets

Smart GrowthSmart Growth Sustainable Sustainable GrowthGrowth

Inclusive GrowthInclusive Growth

InnovationInnovation« Innovation Union »« Innovation Union »

Climate, energy Climate, energy and mobilityand mobility

« Resource efficient « Resource efficient Europe »Europe »

Employment and Employment and skillsskills

« An agenda for « An agenda for new skills and jobs »new skills and jobs »

EducationEducation« Youth on the « Youth on the

move »move »

CompetitivenessCompetitiveness« An industrial « An industrial policy for the policy for the

globalisation era »globalisation era »

Fighting povertyFighting poverty« European platform « European platform against poverty »against poverty »

Digital societyDigital society« A digital agenda « A digital agenda

for Europe »for Europe »

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Europe 2020: new governanceEurope 2020: new governance Lead role for the Lead role for the European CouncilEuropean Council

Extend Extend partnershippartnership to regions, social partners & civil society to regions, social partners & civil society

COM and European Council monitoring ...COM and European Council monitoring ...1.) Thematic -1.) Thematic - combining priorities and headline combining priorities and headline

targetstargets2.) Country -2.) Country - Member States strategies to meet targets Member States strategies to meet targets

… … based on internationalbased on international comparison comparison

Country-specific recommendationsCountry-specific recommendations & & policy warningspolicy warnings

Simultaneous reporting Simultaneous reporting under Europe 2020 and SGP – but under Europe 2020 and SGP – but keeping instruments separate & maintaining integrity of SGPkeeping instruments separate & maintaining integrity of SGP

272727

Where do we go from here?Where do we go from here? Commission launchedCommission launched wide public consultation:wide public consultation:

1400 contributions received and analysed: 1400 contributions received and analysed: ec.europa.eu/eu2020ec.europa.eu/eu2020

March 3rd 2010:March 3rd 2010: Commission proposal Commission proposal (COM(2010)2020)(COM(2010)2020)

Spring European Council (25.3.2010): Spring European Council (25.3.2010): endorse overall approach, endorse overall approach, EU headline targets and “governance”EU headline targets and “governance”

June European Council 2010: June European Council 2010: approve detailed parameters, approve detailed parameters, including the integrated guidelines and national targetsincluding the integrated guidelines and national targets

Thereafter:Thereafter: launch of launch of flagship initiativesflagship initiatives & & implementationimplementation

2828

EuropeEurope 2020 Strategy 2020 Strategy

http://ec.europa.eu/eu2020

292929

Lessons from Lisbon StrategyLessons from Lisbon Strategy

Strong convergence on direction of reforms ...Strong convergence on direction of reforms ...- Concrete results before crisis- Concrete results before crisis- Partnership EU & Member States- Partnership EU & Member States- « Lisbonisation » of structural funds- « Lisbonisation » of structural funds

... but a delivery gap has built up:- Uneven progress between Member States- Key targets (R&D, employment) not reached- Lack of ownership; weak communication - Regions not sufficiently involved- Too EU-inward looking

→ UPDATE VISION TO POST-CRISIS WORLD & IMPROVE DELIVERY

1 Europe 2020 Strategy Brussels, 24 March 2010 Ulrik Mogensen Secretariat General.

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Transcript of 1 Europe 2020 Strategy Brussels, 24 March 2010 Ulrik Mogensen Secretariat General.