Investing in education for real progress towards an innovative, knowledge- based economy

In today’s modern society, sustainable growth requires an increasingly educated population. Investment in education infrastructure is essential for all to participate in the labour market and in society.

The success of Europe‘s economy depends increasingly on the success of transforming it into a knowledge-based economy. Innovation is a central feature of this process.It is essential to enable companies to provide the most innovative products and services with the highest quality for the largest number of consumers.

Of course, the private sector has a clear role to play in innovation. But an entrepreneurial state is also a crucial actor of innovation, either directly by supporting public research and education or indirectly by providing a strategy for innovation as well as conditions for the private sector to innovate.

Thus, both the private and public sector should support the upgrade of the skill levels of European citizens, invest in human capital, in quality education and in research and development.

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We need decent minimum wages in all member states.

PES proposals:

  • We must invest in education as a public good! EU member states should invest at least 6% of their respective GDP in education and training, while aiming to maximise this investment’s social and economic output.

  • We must promote a convergence of educational standards! Establishing EU-wide standards for higher education and vocational education could bridge the skills mismatch confronted by both workers and companies. In particular, digital literacy and more advanced ICT skills need to be promoted.

  • We must support dual training schemes! These schemes should be supported in all member states through the Youth Guarantee. Combining classroom education with practical training and work experience is a proven method of boosting students‘ skills.

  • We must set up in-work educational programmes! These programmes should be designed for companies from high-job-creation potential sectors. These companies can strongly support employment by addressing existing skills mismatches and by establishing direct relations between employers and trainees.

  • We must eliminate gender bias in education! Programmes should be funded which encourage more women to pursue studies in science, technology, engineering and mathematics.

  • We must invest in R&D! Research and development is essential for the productivity and competitiveness of the European economy. The Europe 2020 target to invest 3% of the EU‘s GDP in R&D is the key objective in this respect. Such investment should not be limited to new, future sectors, but also include traditional and mature sectors, such as the steel, chemical and automotive sectors. Other funds should also be used for this purpose, such as the EFSI and structural funds. These could be targeted more to overcome regional imbalances in innovation.

  • We must cooperate more on innovation! Cooperation between the state and the private sector on innovation should be reinforced. Synergies between companies and research institutions as well as between the supply and demand sides of business would result in innovative solutions.

  • We must make life-long learning a right for every worker! Life-long learning would ensure worker adaptation to a constantly changing working environment and faster technological progress. Employees cannot be considered as a commodity that can easily be made redundant. Rather they should be considered direct contributors to the success of a company.

  • We must recognize informal learning! The recognition and validation of skills and competences acquired through non-formal learning can support further learning and employment opportunities.

  • We must set quality standards for internships! Interns and apprentices should be guaranteed decent minimum working conditions and quality standards, so as to improve the transition from education to work.

  • We must encourage cross-sector synergies! A closer coordination of innovation, competition, industrial, education, employment, environment, climate, trade and research policies at European, national and regional level could favour cross-sector synergies.

A European industrial policy

The industrial sector is central to Europe’s economy. It generates 15% of the EU’s GDP 15 and employs about 40 million people.

This is not a sector in isolation. It interacts with the entirety of Europe’s economic network, far beyond manufacturing. It connects upstream to raw materials and energy, and downstream to logistics and consumer services.

Nearly one in four private sector jobs are in industry. These jobs are often highly skilled. Each additional job in manufacturing creates 0.5 to 2 jobs in other sectors. Industry accounts for over 80% of Europe’s exports and 80% of private research and innovation. Industrial policy also has a central role to play in finding solutions for other key challenges, such as climate change.

This is why we are convinced of the central role of industry for creating jobs and growth in Europe and we believe that innovation (both in production methods and in creating new products) can contribute to a European industry that does not compete only on the price but especially on the quality of its products.

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Reinforce the European social model.

PES proposals:

  • We must have long-term planning of industrial policies! This planning needs to anticipate economic, industrial, employment and technological developments and support the development of European industrial “champions” through cross-borders projects.

  • We must renew our infrastructure! Providing a high-quality infrastructure for all industrial actors is a precondition to attract more investments for European industry and to overcome industrial imbalances in Europe. The state has an obligation to provide access to energy, transport networks and ICT for businesses. New infrastructure investment should always favour environmentally friendly solutions.

  • We must create incentives to reinforce the supply chain! Incentive measures to reinforce the supply chain and to create new interconnections between companies such as technology platforms could greatly contribute to an innovative industry in Europe.

  • We must revise state aid rules to allow support for industry! European rules on state aid could be revised to allow governments to actively support industry in becoming more innovative. For example, they could allow public authorities and public procurement procedures to pay more attention to the quality of products and services procured as well as social and environmental criteria, instead of basing decisions solely on prices.

  • We must create a level playing field between SMEs and large companies! This should be done by adjusting tax policy, public support rules and regulations. SMEs constitute a huge pool of employment. A review of the Small Business Act is an opportunity to address such issues. SMEs need more support to overcome the crisis. European and national micro-credit and SME finance programmes are important instruments on this path.

  • We must ensure the digital revolution does not erode working standards! The transition towards digital working environments must not undermine European working and employment standards. We must ensure adequate social protection, working conditions and workers‘ rights in the transition towards a digital labour market.

  • We must create a safe digital environment! The security of both private and corporate data is an essential feature of the digitalisation of the economy and industry.

A shift to a greener economy as a source for growth

At international level, the EU has played a key role in developing an international framework to combat pollution and climate change. But turning this international commitment into an economic reality can be difficult in practice.

The greening of the economy is essential, not only for the EU’s credibility in reaching its CO2 emission reduction goals, but also to improve the performance of our economies.

Green technologies, in particular for energy, are key for the sustainability of our economic model. They are also an important potential source of short-term growth and job creation. Sectors such as renewable energy, energy efficiency, recycling, green trans- port solutions, indeed have a large job creation and innovation potential.

At the same time, resource constrains, especially on natural and rare resources will demonstrate the limits of our current consumption patterns. Greater resource efficiency will reduce Europeans’ ecological footprint on land, materials, water use and greenhouse gas emissions.

We are convinced that the EU should ambitiously invest in these sectors to create growth and jobs and change the European energy and resource consumption pattern. Europe must make use of its first-mover advantage in these areas!

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Social partners’ involvement is essential

PES proposals:

  • We must have energy efficient buildings! Increased public and private investments to improve buildings’ and houses’ energy efficiency would allow up to 80% savings in energy consumption and create considerable numbers of jobs in the building sector. It would also relieve lower income people from the burden of energy expenses. Subsidies for poorer households‘ energy efficiency investments represent one of the smartest forms of redistribution.

  • We must tax greenhouse gas emissions! Tightening regulation could better support the transformation of European energy production and consumption, together with green taxation on greenhouse gases emissions. Such green taxation would both create additional revenue for investment and a strong incentive for a shift towards more renewable energies in the energy mix and a low-carbon economy. Its potential disproportionate burden on vulnerable consumers should be compensated with adequate social and energy policy measures to prevent energy poverty, including subsidies for energy efficiency investments in poorer households.

  • We must fix CO2 emissions trading! The number of carbon certificates emitted in the frame of the Emissions Trading System should be reduced in the next trading period starting in 2020. The creation of a market stability reserve should help in this respect.

  • We must complete the energy union! Completing the European internal energy market would support the energy transition. This could be done with an Energy Union that has energy efficiency, renewables and smart infrastructure as its backbone.

  • We must invest in green technology! Investments in energy efficiency, renewable energy and other green technologies should be one of the main priorities of the European Fund for Strategic Investments.

  • We must shift to a more democratic energy model! A shift to a more decentralised and more democratic energy model would enable citizens to take part in local energy production, profit from it and contribute to the shaping of the European energy transition.

  • We must make our economy circular! A transition towards a comprehensive, resource efficient circular economy that does not only focus on waste management but also on the prevention and reuse of waste could protect our natural foundations of living and make our industries more competitive. With its labour intensity, the circular economy requiring collection, sorting, testing, refurbishment and reselling furthermore offers job-creation potential across all skills levels, contributing to inclusive growth.

  • We must respect the waste hierarchy! The “waste hierarchy” principle, which avoids unnecessary disposal of waste, should be better implemented, for instance by discouraging the use of landfills and waste incineration through taxation.

  • We must revise eco-design rules! Consumers and the environment alike would profit from revised eco-design rules that promote the reparability and re-usability of materials to avoid waste as well as energy efficiency.

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A Europe that performs,
is not possible without a Europe
that protects and enables.

Smart investments

Name: Sara
Age: 28
Carrer wish: To earn a good salary and hold a senior position.
Hobbies: Playing guitar

Education for a knowledge-based economy

  • Invest in education
  • Self-development
  • Education programmes with in-work experience
  • Quality internships
  • Elimination of gender bias
  • Invest in R&D
  • Life-long learning
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Name: Tom
Age: 45
Carrer wish: Flexible work which allows him to enjoy a good work life balance.
Hobbies: Jogging

European industrial policy

  • Long-term planning
  • New production methods and new products
  • Invest in infrastructures
  • Support for SMEs and large companies
  • Active support from the state
  • A more digital economy
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Companies and governments understanding the fact that more investment in knowledge and education will boost the economic growth

Green economy:
a source for growth

  • Improve energy efficiency, notably in buildings
  • Green taxation for greenhouse gases
  • Incentives for a shift in energy consumption
  • Invest in renewables
  • A shift to a circular economy
  • A better energy affordable to all
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