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Seizing the Opportunities of a New Economy:
Challenges for the European Union
Thomas Andersson
Directorate for Science, Technology and Industry
OECD
September 2000
Abstract:
The economic performance of the EU has taken on a new dimension with the notion of a “new economy”.
While ICT has become a major factor in explaining the prolonged, non-inflationary boom in the United
States, the EU is lagging behind in most aspects of ICT. Arguing that the impact of ICT is inter-related
with a range of factors, including innovation, human capital and organisational change, this paper
concludes that systemic weaknesses limit the ability of the EU to adjust and capitalise on new economic
and technological opportunities. The direction of remedial action is considered in the areas of: market
segmentation; science-industry linkages; ICT infrastructure and services; labour markets and skills; and
financial markets, venture capital and entrepreneurship. Capitalising on the agenda set by the Lisbon
summit 2000 will greatly hinge on the extent to which there will be improved conditions both for co-
ordination between policy areas and complementarity between measures at the national and Community
levels.
1
1. Introduction
Technical progress and human capital have always been central to economic performance. From the work
of Romer (1990) onward, it has also been increasingly recognised that growth is not a given, but is strongly
influenced by institutions and policies. At the same time, measuring the sources of growth is notoriously
difficult. In econometric growth studies, technical progress has ma
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