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Address by Dr Žiga Turk, Minister, Government Office for Growth, Slovenia, at the Growth and Jobs Summit : Lisbon Strategy 2.1 in the Context of Global Megatrends

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Ladies and gentlemen,

It is my great honour to be able to address this summit. In less than two weeks the spring European Council will launch the second three-year cycle of the renewed Lisbon Strategy for Growth and Jobs. Too often the Lisbon Strategy is discussed in closed political circles instead of being promoted among the many stakeholders that can contribute to its success. The Lisbon Council is definitively one of them. There is a long day ahead of us, which will allow us to discuss the past, present and future of the Lisbon Strategy, how it is performing, and how it is contributing to economic growth in Europe and to new quality jobs.

During this introduction, however, I would like share with you a narrative that places the Lisbon Strategy into a broader social, economic and scientific context, and explains how the updated Strategy is addressing them. This context includes:

  • globalisation;
  • the communication revolution;
  • the industrial revolution; and
  • transition into the conceptual age.

1) At the time that Europe was beginning to think about its growth strategy, about the Lisbon Strategy, we understood globalisation mostly as Europe's competition with the United States and Japan. Since then, the United States is gradually ceasing to play the role of the main engine of the world's economy. Important new players have emerged on the world stage, which are driving up the prices of commodities and oil. On the one hand they are rivals; on the other, partners. Be that as it may, they demand a fresh consideration of what Europe can contribute to the globalised multi-polar world and where its real competitive advantages lie.

2) Since the late 1980s the world has been witnessing a communication revolution. In my previous job, where I taught students of engineering and architecture about technical communication, I called it the second communication revolution. The first – affordable paper and printing, approximately 500 years ago – utterly changed the modus operandi in science, technology and politics, since it democratised access to knowledge and made available communication on paper. Paper and print introduced a significantly wider circle of people into the creative process. They paved the way for the European dominance in the fields of science, technology and culture that we have witnessed in past centuries.

The second communication revolution is happening just now and is making efficient electronic communication possible for the masses. Creativity and innovation are no longer limited to rigid organisational schemes. Through open innovation and creativity, we are drawing broad masses of talent into the process. E-democracy is bringing changes to the method of political decision-making and the roles of government institutions.

3) We are on the threshold of the third industrial revolution. In the first two, the development of the world was based on energy accumulated over billions of years in the form of fossil fuels. We are facing the challenge of significantly reducing our dependence on non-sustainable resources and making the transition to a low-carbon economy – a challenge comparable to the Manhattan or Apollo projects. To achieve this we have to mobilise all our scientific, technical, economic and political potential, and we also have to change our values.

4) After the agricultural age, the industrial age and the information age, we are moving into an age which Dan Pink has called the "conceptual age" – an age in which the greatest challenge is no longer providing food, industrial products or even information, but rather an age in which our economic life is increasingly shaped by values, when we are no longer interested in satisfying basic needs, in the mere usefulness of a product or service, but in its design, brand, quality and many other intangible attributes.

Look at your watch? Does it only tell time, or does it mean something more to you? Your shoes? Do they keep your feet dry, or is there something more to them? How much does a device that tells time cost? The price is near zero! How much does something to keep your feet dry? About 10 times less than the shoes you are wearing!

The point is that in the price of a product, the price for the function that the product is providing is getting smaller and smaller. But the price for the meaning you attach to a product is getting higher and higher. And meaning cannot be attached to a product by some Asian engineer or worker who has no idea of the values and meanings close to our hearts. Values such as whether the product was produced or manufactured in a fair way, without improper exploitation of, for example, children. Whether a product is local, healthy, environmentally friendly and people friendly. These are characteristics we are willing to spend some extra money on, and which are fundamentally connected to our values and cultural background.

The common European blueprint for reform, for changes, is the Lisbon Strategy. The Slovenian Presidency would like the spring European Council in March to launch an ambitious new cycle for the Lisbon Strategy under four priority areas. The priority areas can be summarised as follows:

  1. Europe needs to become more innovative and creative, capitalising on the information revolution to be ready for the conceptual age.
  2. Europe needs to become more entrepreneurial to shape rather than respond to globalisation.
  3. Europe must care for people so that all can take advantage of the trends.
  4. Europe must care for nature and kick-start the third industrial revolution.

About becoming innovative and creative: Placing creativity alongside knowledge and innovation is how Lisbon is responding to the transition into the conceptual age. In his book The Rise of the Creative Class, Richard Florida stated that talent is the most valuable economic resource of the future. Europe must raise its talents, but it must also be able to attract them from abroad and keep them within Europe. We are therefore launching the idea that knowledge should become the fifth freedom in Europe. Not only should talents – engineers, researchers, students and professors – be able to move more freely, but the innovation paradigms should be complemented with that of open innovation; access to knowledge should become more open as well. And, in this European knowledge space, there should be an efficient common policy for the protection of intellectual property and innovation.

A key enabler for open innovation and improved education is the communication infrastructure. We must make sure that by 2010 all schools in Europe have high-speed Internet access and that it will be increasingly available to citizens. We must continue to develop top-flight science and technology, invest in R&D infrastructures and improve synergies between the EU and national R&D funding schemes.

We Europeans must become more entrepreneurial. There is a shortage of highly innovative and creative small enterprises, and therefore special attention must be devoted to the formation and growth of small and medium-sized enterprises and their access to development resources: to knowledge and research infrastructure and to sources of equity finance. We must not skip any opportunity to deepen the internal market. We should not forget that world-class companies emerge in a competitive, not in a protected environment. If biology can give us any lessons, the fastest birds and most efficient predators did not evolve in the protected environment of the Galapagos Islands and competitive companies not behind the Iron Curtain.

We Europeans must maintain care for people. Flexicurity enables the dynamic search for a balance between an economy which wants a functioning labour market, in which it can bring the right people to the right jobs, and security for people by enabling them to find a new job quickly. Strengthening education, in particular higher education and lifelong learning, is important in this context.

We Europeans care for the environment. The year 2007 was the year in which we adopted ambitious, very ambitious promises in this field. In 2008 we are putting Europe on track for the third industrial revolution. Reducing CO2 emissions to sustainable levels may cost EUR 500–1,000 billion each year. It will be someone's cost and someone else's income. We must make sure Europe is the first to develop next-generation technology related to hydrogen, photovoltaic, clean coal and nuclear energy.

Ladies and gentlemen,

Lisbon is delivering and the economic upswing in 2006 and 2007 in the European economy is not only cyclical, it is also a result of structural reforms. But given the current economic situation in the world, with a possible economic downturn looming, Europe must keep up the momentum of the reforms. The Community Lisbon Programme is so far perhaps the most complete to-do list that we have had to date, and all stakeholders need to do their part of the job. We should also make sure that the social partners, regions and civil society institutions such as the Lisbon Council would continue to play an important role.

Member States need to proceed with the national reform programmes. Slovenia's Presidency of the European Council symbolises the beginning of the end of the period in which Europe became a whole again, overcoming the divisions created by the Iron Curtain after WWII. In the last 20 years, the former communist countries have gone through extensive changes and reforms. Some countries started from scratch; they did not even exist before. This too provides a message to Europe as a whole that reforms can happen, that changes are possible.

We have three more years for the Lisbon Strategy. We should push forward with reform and at the same time start thinking about the strategic framework for the post-2010 period.

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Date: 04.03.2008