World Economic Forum Annual Meeting 2013

  • Rebuilding Europe's Competitiveness

    By Sir Andrew Cahn

    Thursday 24th January 2013 - 2:45pm - 4:15pm

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  • These insights were written by Sir Andrew Cahn, Vice-Chairman, Nomura, United Kingdom.

    Synopsis

    This is a well-worn topic, but in true World Economic Forum fashion new ideas and great energy meant that a new perspective was achieved.

    The most surprising moment was when participants were asked if Europe citizens properly understand the challenges facing them. Only five hands went up, including three finance ministers; the politicians believed in their electorate while the business folk were not so confident. But, when presented with a scenario of what Europe will achieve by 2020, radical ideas flowed and there was confidence in Europe’s ability to get there.

    One group had to imagine the success and the other failure by 2020. Both groups came up with the same issues: a sustained reform programme over many years; reinvented institutions; fairness and gaining the trust of the people; catalysing the young catalysers; and making change irrevocable. These were the keys to success. 

    Some radical concrete ideas emerged – all non-EU students who completed degrees in the EU could have the right to live and work there; universities needed to escape from state control so they can be entrepreneurial; far more continuous professional development; retaining and abolishing entry restrictions into professions; and changing bankruptcy laws to encourage risk taking.

    Perhaps the most surprising theme was that there had to be an ethical and social component to any reform programme. It was not just that the enemies had to be chosen carefully (rent seekers, tax evaders), but also that the losers had to have skin in the game. Markets could not work without the trust of the people and a sense of fairness. All agreed that it was vital not to underestimate the challenge and to invest heavily in gathering political consent right at the start, while making sure that a burning platform provided the driving force for the acceptance of change.

    There was debate on whether to start big and go for the great prize, or build momentum from smaller beginnings. But all agreed that opening markets had to come before institutional reform, and going for early wins avoiding legal complexity was key. 

    The session had begun with the Forum presenting its new report, “Rebuilding Europe’s Competitiveness”, which showed there was a big gap between the EU and the US (and even South Korea and between the north and south in Europe). 

    Participants agreed with the big conclusions that we need multistakeholder partnerships, sustained leadership, a sense of urgency and clear communications. And it all depends upon entrepreneurship, innovation, mobilizing talent and making markets work.

    Encouragingly, most people in the room seemed to think that Europe can do it by 2020.

    Disclosures

    The views expressed are those of certain participants in the discussion and do not necessarily reflect the views of all participants or of the World Economic Forum.

Session objectives

What critical steps are needed to achieve long-term prosperity in Europe?

Session objectives:

  • Design the roadmap to growth
  • Catalyse action among European leaders 

Rapporteur

  • Sir Andrew Cahn Sir Andrew Cahn
    Vice-Chairman, Nomura, United Kingdom

    Career mostly in public service, focusing on commercial and economic issues in the Cabinet Office, t...

Speakers

  • Christoph Franz Christoph Franz
    Chairman, Roche, Switzerland

    1983, graduate, General Management and Engineering, Ecole Supérieure de Commerce, Ecole Centrale de...

  • Katinka Barysch Katinka Barysch
    Director, Political Relations, Allianz SE, Germany

    Studies, London School of Economics and LMU Munich. Formerly: with the Centre for European Reform (C...

  • Anders Borg Anders Borg
    Minister of Finance of Sweden

    Studies in Political Science, Economic History and Philosophy, Uppsala University; postgraduate stud...

  • Corrado Passera Corrado Passera
    Minister of Economic Development, Infrastructure and Transport of Italy (2011-2013)

    1977, degree (Hons) in Business Economics, Bocconi University, Italy; 1980, MBA, Wharton School, Uni...

  • Michael Noonan Michael Noonan
    Minister of Finance of Ireland

    BA, HdipEd, St Patrick's Teacher Training College, Dublin University College, Dublin. 1981, first el...

  • Sir Andrew Cahn Sir Andrew Cahn
    Vice-Chairman, Nomura, United Kingdom

    Career mostly in public service, focusing on commercial and economic issues in the Cabinet Office, t...

Facilitated by

  • Zanny Minton Beddoes Zanny Minton Beddoes
    Economics Editor, The Economist, United Kingdom

    Studies, University of Oxford, UK and Harvard University, US. 1992-94, Economist, International Mone...

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