Post on 06-Oct-2020
Growth Enhancing Reforms: The Employment, Skills and
Innovation Agenda
Dr. Marcin PiatkowskiSenior Economist
The World Bank, Warsaw
Budapest, March 30, 2011
2
Main messages
Post-crisis economic growth in the EU-10 is likely to be
lower than before the crisis
Structural reforms could accelerate growth
The reforms should focus on:
Raising employment
Improving skills
Enhancing technology absorption and innovation
Post-crisis growth likely to be lower
3
Source: World Bank based on the IMF and Eurostat
Figure: GDP Growth Rates in EU-10, EU-15 and the pace of convergence, 2005–2012, in percent
-6
-4
-2
0
2
4
6
8
2005 2006 2007 2008 2009 2010 2011 2012
EU-15 EU-10 Speed of convergence
Also relative to non-EU countries
4
Source: IMF and Eurostat
Figure: GDP Growth Rates in EU-10, EU-15 and the World, 2008–2012, in percent
Key issue: Low employment rates
5
Source: Eurostat
Figure: Average Employment Rates in EU-10 and EU-15 Countries, 2000–09
55.0
60.0
65.0
70.0
75.0
80.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
EU10
EU15
Bulgaria
Czech Republic
Estonia
Latvia
Lithuania
Hungary
Poland
Romania
Slovenia
Slovakia
Especially among the elderly and women
6
Source: World Bank, Eurostat
0
10
20
30
40
50
60
70
80
90
100
Y20
_2
4
Y25
_2
9
Y30
_3
4
Y35
_3
9
Y40
_4
4
Y45
_4
9
Y50
_5
4
Y55
_5
9
Y60
_6
4EU15
EU10
NL
0
10
20
30
40
50
60
70
80
90
100
Y2
0_
24
Y2
5_
29
Y3
0_
34
Y3
5_
39
Y4
0_
44
Y4
5_
49
Y5
0_
54
Y5
5_
59
Y6
0_
64
EU15
EU10
NL
Figure : Employment Rates by Age in EU-10, EU-15, and the Netherlands, 2009 (percent)
Panel A: Male Panel B: Female
Also in the euro zone
Source: Allard and Everaert (2010)
7
Higher employment of women and the elderly represents the highest economic potential
Source: World Bank
Figure : Poland: Effect of 10% Fall in Inactivity on Total Employment Rate (by Age and Gender), 2008
0,00
0,05
0,10
0,15
0,20
0,25
0,30
0,35
0,40
0,45
0,50
15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64
percentage point
age group
Men Women
8
Which could boost economic growth
-1
0
1
2
3
4
5
6
7
Germany United Kingdom Lithuania Korea Chile Spain
pe
rce
nt
Increase in value added if inactivity among older workers in Poland were reduced to the level of selected countries
as % of GDP2008
Women
Men
Source: World Bank
9
Selected Policy Recommendations
Enhance the productivity and employability of older workers through
focused training programs and private sector involvement (such as
Germany’s Initiative New Quality of Work)
Increase retirement age and decrease worker disincentives resulting
from pre-retirement benefits
Rationalize disability pensions
Reduce tax wedge
Encourage higher female labor force participation and evaluate pro-
natalist and others policies in this context
Promote active labor market policies
10
Key issue: low skills leading to mismatch
11
Source: World Bank
Figure : Newly Created Jobs in Poland Require Different Skills from Old Jobs, Giving Rise to the Skills Mismatch
Need to adopt an integrated approach
12
Source: World Bank
Figure : Implementing STEP (Skills Toward Employment and Productivity) as an Integrated Set of Programs Across the Life Cycle
Selected Policy Recommendations
Expand early childhood development programs to universal
coverage
Build a strong skills foundation for all through ambitious
approaches to schooling
Strengthen access to and efficiency of tertiary education
through higher education financing reform and data
collection as a basis for system steering (tracer studies)
Establish and strengthen lifelong learning systems
13
Key issue: Inefficient R&D spending
14
Source: Economic Papers 382, DG Economic & Financial Affairs, July 2009. 2
Figure: Assessment of the Amount and Quality of Public R&D Spending in EU-27
Low share of private sector R&D spending
15
Gross domestic R&D expenditure, by sector of performance, 2008
Source: Eurostat
Also in the euro zone
16
Source: Allard and Everaert (2010)
Inefficient public research institutions in EU-10
17
Figure : Number of Annual Publications per RDI Staff in Selected EU-10 and EU-15 Countries
0.00
0.02
0.04
0.06
0.08
0.10
0.12
0.14
0.16
PA
RC
***
SR
I***
Sin
tef
TN
O
Fra
un
ho
fer
Ele
c-2
*
Mix
ed
VT
T
ICT
Ars
en
al*
*
Sh
ip-1
Sp
ace
Occu
p
Bio
-3
Me
ch
-2**
Ele
c-1
**
Me
ch
-2
pu
blic
atio
ns /
sta
ff
Source: Goldberg, Goddard, and Kuriakose 2010 using Science Citation Index.
Higher and more efficient R&D would raise GDP
18
Table : Overall Effects on GDP Levels of Achieving Lisbon Targets in Selected EU-27 Countries by 2025
Selected Policy Recommendations
Redesign public R&D funding systems to emphasize
applied research and collaboration with industry
Reform state-owned research institutes, including through
commercialization and employee-led privatization, to better
align their outputs with the needs of industry
Strengthen the public institutional framework for R&D and
innovation
Increase financing for start-up and innovative companies
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