The long-term growth of the economy is closely linked to the productivity of the factors of production and to its evolution. In the last few years, however, growth in labour productivity has decelerated in Europe and in Belgium. This slowdown partially explains the differences in economic performance between Europe and the US.
The National Reform Programme
The European authorities and the Member State governments soon recognised the challenge posed by the deceleration in productivity growth to the European Union’s future. Their reaction took shape in the adoption at the European Council of Lisbon in March 2000 of a new goal for the coming decade: to become the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion.
Achieving this goal required an overall strategy, which, in the course of time, was called the Lisbon strategy. The strategy is based on three major pillars:
macroeconomic stability,
structural reforms,
employment.
The Federal Planning Bureau offers an informative presentation of the structural reform section of the Lisbon strategy and monitors the evolution of these reforms in the key sectors of the Belgian economy.
The Federal Planning Bureau also participates in the preparation of the report on the implementation of the strategy in Belgium, which is called the National Reform Programme and is submitted to the Commission’s services in October (www.be2020.eu).
Methods and tools
A better understanding of the evolution of productivity requires a specially adapted statistical tool that allows an industry-based analysis of the fundamental trends of the economy. Therefore, the Federal Planning Bureau is working with other European institutions on a project, financed by the European Union’s sixth framework programme for research, to develop the EUKLEMS database (see also http://www.euklems.net).
This database contains the variables for analysing the evolution of productivity for 72 industries since 1970, according to different methodologies of construction of productivity.
Determinants of productivity
In order to forecast productivity, one has to understand its driving factors. The Federal Planning Bureau is especially interested in better defining the role of three of these determinants:
