Productivity growth and superfast internet investment key to long-term growth in Europe
- Release date: 26 October 2011
- Reference: 2011-161-EN
Leading academics, policy makers and business people are expected to call for greater investment and economic dynamism to ensure higher productivity and long-term growth at a conference on Thursday hosted by the European Investment Bank (EIB), at their Luxembourg headquarters.
European Investment Bank research to be presented at the conference suggests the switch to next-generation superfast networks could require EUR 200bn of dedicated infrastructure investment. The conference will also review empirical evidence on productivity, with a focus on industrial flexibility to promote growth in Europe.
Plutarchos Sakellaris, EIB Vice President said “Close cooperation with leading economists from around the world helps to encourage strategic reflection of long-term priorities such as superfast broadband and guide overall sector support by the EIB. Examination of how best to ensure sustainable growth in Europe over the next decades reaffirms the importance of tackling long-term structural challenges alongside the urgency of short-term problems.”
John Haltiwanger, University of Maryland Professor of Economics said “Healthy market economies constantly reinvent themselves as businesses adjust to changing economic conditions. Part of this reinvention involves new firms exploring new products and unprecedented opportunities of doing business over the internet. Financing start-ups and high-growth businesses is essential to fostering innovation, job growth and productivity."
The internet revolution is far from complete and new innovation to stimulate growth will depend importantly on connection speed. The European Commission recently published an ambitious EUR 50 billion plan for development of superfast broadband, energy and transport in Europe. This acknowledged the high level of public sector financial support needed. The conference will further examine the details of projected implementation costs of superfast internet to achieve targets set out in the Digital Agenda. The magnitude of public sector support required will be questioned alongside outlining economic benefits from superfast internet deployment.
Factors essential to stimulating European productivity will also be examined by academics from around the world. Europe’s impressive record in creating jobs prior to the crisis will be highlighted in light of challenges facing productivity and services. How to boost long-term growth productivity in Europe is even more important to ensuring global competitiveness for future generations. The conference will emphasize the complementary roles of economic dynamism and IT investment in boosting European productivity.
Notes for Editors
- The European Investment Bank is the long-term lending institution of the European Union created by the Treaty of Rome in 1958. Its task is to contribute towards the integration and balanced development as well as the economic and social cohesion of the EU Member States by making long-term finance available for sound investment. Besides supporting projects in the EU, the EIB’s main lending priorities include financing investments in future Member States and EU partner countries.
- The European Investment Bank is one the largest multilateral financing institutions, lending well over EUR 70 billion in 2010, both within the EU Member States and in third countries. The Bank operates in keeping with banking practice and in collaboration with the wider banking community.