The Europe 2020 Competitiveness Report: Building a More Competitive Europe

The terms country and nation as used in this report do not in all cases refer to a territorial entity that is a state as understood by international law and practice. The terms cover well-defined, geographically self-contained economic areas that may not be states but for which statistical data are maintained on a separate and independent basis. We thank Danielle Carpenter Sprungli for her superb editing work, and Kamal Kimaoui and Yoren Geromin for their excellent graphic design and layout. This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. 1 The Europe 2020 Competitiveness Report In recent years Europe has faced a myriad of economic and social difficulties, with continued financial troubles, fear of outright sovereign defaults, and rising unemployment and social tensions in several European economies. These concerns have led many to question the very viability of the euro and have raised the need to rethink the European Union project itself. Given the gravity of the crisis, and the ever-present fear that financial contagion may spread from Greece to other southern European countries and the rest of Europe, creating a major economic and financial meltdown, these issues have captured the world's headlines and European policy-makers' attention. However, amid concerted efforts to stem the short-term financial consequences, the efforts of Europe should not be further diverted from achieving the fundamental longer term goal of creating a highly competitive, inclusive and sustainable society to better enable Europe's economies to absorb shocks and ensure stable economic performance going into the future. Competitive economies are those that are able to provide high and rising living standards, allowing all members of a society to contribute to and benefit from these levels of prosperity. In addition, competitive economies are those that are sustainable – meeting the needs of the present generation while maintaining the ability to meet those of future generations. The World Economic Forum has been studying Europe's competitiveness for more than three decades. Indeed, at its inception in 1979, The Global Competitiveness Report focused on how the region's competitiveness compared with that of the United States. Over the years the Forum has carried out a number of Europe-specific competitiveness reports. This culminated most recently with the Lisbon Review series, which assesses Europe's progress in accomplishing its competitiveness agenda over the first decade of this century. Recognizing that they had not met the competitiveness goals …