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The Lisbon Agenda: the hope - and the realities

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The Centre for Economic Performance at LSE has today (Tuesday 10 October) published findings from its Productivity Programme's research into the Lisbon agenda. Boosting Innovation and Productivity Growth in Europe: the hope and the realities of the EU's 'Lisbon agenda' found that:

  • The United States has significantly higher productivity than the European average. US GDP per hour is over 15 per cent higher than Europe's; and US GDP per capita is over 30 per cent higher.
  • From the end of the Second World War until the mid-1990s, Europe was catching up with US levels of productivity. But since then, US productivity growth has been faster than in Europe.
  • In 2000, the European Union (EU) launched the 'Lisbon agenda'. This had the aim of making Europe 'the most dynamic and competitive knowledge-based economy in the world, capable of sustainable economic growth, with more and better jobs, greater social cohesion and respect for the environment'.
  • Stimulating innovation was seen as a major route to reaching this goal. In particular, the EU set the 'Barcelona target' of increasing research and development (R&D) to 3 per cent of GDP by 2010.
  • The Lisbon agenda has not realised its objectives. A major reason for this is the failure of EU members to liberalise their product and labour markets.
  • Although the numerical target for R&D makes little economic sense, the emphasis on innovation as a route to growth is sensible.
  • The cost of patenting in Europe is about five times the cost of patenting in the United States. The suggested introduction of a 'Community patent' would lower this cost and make it easier for European firms to patent their innovations.
  • The 'brain drain' from the EU to the United States - because of better research opportunities and higher wages - is still a significant phenomenon. The Lisbon agenda's aim of reversing this trend has not materialised.

Click here to download the Boosting Innovation and Productivity Growth in Europe: the hope and the realities of the EU's 'Lisbon agenda'| (PDF)

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Press cuttings

ctiv.com, Belgium
EU innovation goals 'doomed' (10 Oct 06)
The European Union has no hope of achieving its goal of becoming the most competitive economy in the world by 2010, according to LSE.

Easy Bourse, France
EU Will Fail To Meet 2010 Innovation, R&D Goals - Study (10 Oct 06)
The European Union has no hope of meeting its targets for boosting innovation by 2010, and may never achieve its goals without wide-ranging reform, LSE said Tuesday. In 2000, the EU agreed on a strategy - known as the Lisbon Agenda - for closing the productivity gap with the US by the end of this decade. But according to a report by the LSE's Centre for Economic Performance, 'progress has been poor.'

In the news
US putting EU economy into touch (10 Oct 06)
The US economy is continuing to outperform and outstrip its EU counterpart, a new report claims, despite a concerted innovation drive from the latter. Today's study from the Centre for Economic Performance (CEP), part of LSE, says that US productivity in terms of GDP per hour is 15 per cent higher than in the EU. When translated into GDP per capita, the US economy is about a third more productive than that of the European member states.

10 October 2006

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