Alert over Europe’s struggle to compete
Baku, December 17 (AZERTAC). Europe’s 50 top industrialists are sounding the alarm about Europe’s gap in competitiveness to US and Asian rivals, bemoaning everything from high costs for energy and starting up businesses to weak productivity and high youth unemployment.
Leif Johansson, chairman of the European Roundtable of Industrialists (ERT), said that companies were beginning to see light at the end of the tunnel in terms of the eurozone crisis.
But he added that concerns persisted about the health of the global economy.
“There is a high degree of uncertainty in the European and for that matter US, economy,” said Mr Johansson, chairman of Ericsson and AstraZeneca and former chief executive of Volvo Group.
“The easiest decision for a board to take in terms of uncertainty is ‘let’s look at this at the next board meeting’.”
The ERT is an elite group of 50 of the continent’s leading chief executives and chairmen from companies such as Nestlé, Siemens, Telefónica and Rolls-Royce, giving it huge clout in its discussions with Europe’s politicians.
Mr Johansson, speaking as the group released a benchmarking report on competitiveness, said the companies were increasingly global with only about 40 per cent of their sales in Europe.
But with more than two-thirds of R&D on the Continent, many jobs were dependent on reforms in several areas, he added.
One of the biggest concerns is over energy with Europe’s trade deficit in energy and raw materials doubling in the past seven years.
“There is no European industrial energy policy. We should take a much more European approach but it doesn’t meet with applause nationally. We are losing competitiveness now, especially compared with the US,” he said.
Another concern is the cost of starting a business, which is twice that of doing the same in the US, six times the Canadian amount and almost 10 times the Chinese level, and that is despite costs halving recently on the Continent.
“If you are a young student wanting to develop your own company the one thing typically you don’t have is money,” Mr Johansson said.
Starting a company in Italy costs an average of €3,653 against €162 in Canada, the ERT said.
He underlined the consistent competitiveness gap with the US: in 2012, the EU had just three-quarters of the productivity per hour worked that the US had while it had just two-thirds of its GDP per capita levels.
Mr Johansson said much of the productivity problem was related to technology development and said the EU would have almost 900,000 vacancies in the digital sector by 2015 at the same time that almost one in four young people are unemployed.
“Youth unemployment in demographic terms always scares me,” he said, adding that Europe would need to open itself up for immigration.
“In reality, we in Europe will have to open up to a different type of integration: highly skilled. The political system is unprepared for that.”
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