1 - Introduction and overview

Summary

Introduction

The late 1990s saw a major change in the comparative growth performance of Europe and the United States. After the Second World War labour productivity growth in Europe outstripped that of the United States, leading to rapid catch-up. This provided a strong foundation for rapid improvements in the standards of living across the continent. However, since 1995 US labour productivity growth has nearly doubled compared to earlier periods, while European growth rates have declined. The slowing growth and faltering emergence of the knowledge economy in Europe led to an ambitious action programme of the European Commission, called the ‘Lisbon Agenda’, aimed at boosting competitiveness and productivity through innovation. It emphasised the need to increase spending on research and development and higher education, and was combined with the aims of completing the single market, opening up sheltered sectors, improving the climate for business and reforming the labour markets while ensuring growth was environmentally sustainable. The urgency was reinforced in reviews of the Lisbon Agenda, in the Sapir report on economic growth in Europe and in various post-Lisbon strategy debates and conferences (European Commission 2004; Sapir et al. 2004).

The purpose of this book is to provide a comprehensive analysis of economic growth in Europe over the past three decades that allows an evaluation of progress in achieving the Lisbon goals.