sicenter ljubljana, slovenia time for a fresh start but time is not on our side urgent need for more...
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SICENTERLjubljana, Slovenia
Time for a fresh startBut time is not on our side
Urgent need for more R&D resources for Lisbon strategy
Ljubljana, June 13, 2005
Professor Pavle Sicherl
SICENTER and University of LjubljanaEmail: [email protected]; www.sicenter.si
Copyright © 1995-2005 P. Sicherl All rights reserved
141
111 113 114
183
100
110
120
130
140
150
160
170
180
190
Income (GDP percapita)
Employment Rate Annual HoursWorked
Productivity (GDPper hour)
R&D Investment(R&D per capita)
Ind
ex E
U=
100
(200
3)
(2002)
Differences with the USA are much larger for R&D per capita (index USA/EU15=183) than for GDP per capita (index 141).
0
5
10
15
20
25
30
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Time
EU
tim
e la
g i
n y
ears
Employment Rate R&D Investment (R&D per capita) Income (GDP per capita)
Productivity (GDP per employed) Productivity (GDP per hour)
US=0
The time lag behind the USA over time has been the highest for employment rate and R&D per capita (25 and 23 years)
Source: P. Sicherl, A Comparison of European and US Economies Based on Time Distances, EUROCHAMBRES, Brussels, March 2005.
EU catch-up - year in which EU15 catches up with the US under various assumptions
2000
2010
2020
2030
2040
2050
2060
2070
2080
2090
2100
2110
2120
2130
0.5% 1% 1.5% 2% 2.5% 3% 3.5% 4% 4.5% 5%
Assumed positive difference of EU15 growth rate over that of the US
Ye
ar
of
ca
tch
up
R&D Investment (R&D per capita)
Income (GDP per capita)
Productivity (GDP per employed)
Productivity (GDP per hour)
Employment Rate
Small improvements are no match for the large gap. If growth rate for R&D per capita for EU15 would be only 0.5% higher
than that of the USA, the catch up would take place only in 2123, for 1% higher growth rate only in 2063. We need a big push.
Source: P. Sicherl, A Comparison of European and US Economies Based on Time Distances, EUROCHAMBRES, Brussels, March 2005.
The competitive position is much better measured by R&D per capita or R&D per employed than by the share of R&D in GDP.
• The target of 3% share of R&D in GDP is a good mobilisation instrument in the medium term. However, even if implemented it would not mean catching up or even surpassing the USA in R&D per capita at such time
• Assumption that EU15 would reach 3% of R&D/GDP already in 2003: Index USA/EU15 2003: GERD/GDP 0.92 x GDP per capita 1.40 = GERD per capita 1.29
• Even if the target of 3% share would be implemented already in 2003, because of much lower GDP per capita the R&D per capita would be in this hypothetical situation in the USA still higher than in the EU15 by 29 percent (or by 27 percent for R&D per employed).
• Europe has to do much better for Lisbon strategy.