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Competitiveness is not (only) a matter of wage levels

Capitalism is built on competition and all over the world competitiveness rankings abound. But what does competitiveness mean? Quarterly report-oriented capitalism defines competitiveness as cost-cutting efficiency, but this is and cannot be a sustainable concept. The WWWforEurope approach defines competitiveness as the overall quality of a country to do business, the ability to create and deliver welfare beyond GDP goals for its citizens both today and in the future.

The assessment of such a socio-ecologically sustainable competitiveness has to regard structure, technology, quality, and skills. Scientific work has to focus on the question how and which innovation systems and production structures can contribute best to this.

On September 19th, 2013, Karl Aiginger and project partner Christian Ketels of Harvard University advocated a "high-road strategy" for Europe. Karl Aiginger presented first results of a new WWWforEurope research paper "Competitiveness under New Perspectives" by Karl Aiginger, Susanne Bärenthaler-Sieber and Johanna Vogel in a press conference: Based on a set of indicators measuring competitiveness along these dimensions, the European economies turn out to be substantially more competitive than when per-capita income is used as the only criterion for judging performance.

Within the EU, successful countries have relied less on wage moderation ("low-road strategy") but have instead pioneered activating social welfare systems with low wage differentials and ambitious environmental goals. Investment in education, research and productivity-enhancing welfare measures are key for long-run success, as are strong political and economic institutions as well as environmental aspirations ("high-road strategy").

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In the project structure of WWWforEurope these questions are mainly addressed in the research focusing on  innovation, industrial and innovation policy. WWWforEurope already provides many valuable papers on these key aspects of the project, especially on industrial policies and the knowledge economy.

Christian Grabas and Alexander Nützenadel describe how industrial policy in Europe has developed since 1945 and how successful industrial policies need to be based on research, education, and innovation policy. Ádám Török, Gyöngyi Csuka, Bernadett Kovács, and Anita Veres take a look at industrial policy in CEE countries and find that these countries are, over all, doing well in innovation but are still underdeveloped in green industries.

Christian Ketels and Sergiy Protsiv provide ample evidence in their paper that industrial clusters are an important element for a growth strategy based on values and sustainability.

Klaus Friesenbichler shows in a very comprehensive paper how important promotion of renewable energies is both for environmental and economic reasons, but how hard it is to build the right framework to bring about the transition towards green energy.

Sustainable industrial policies rely on knowledge and innovation, which is addressed in a number of very interesting papers: Lisa De Propris and Carlo Corradini provide evidence that key enabling technologies launched by inter-sectoral technology platforms lead to new innovation opportunities and may enhance the integration of green technologies.

Jürgen Janger, Klaus Nowotny, Anna Strauss, and David F J Campbell show in their papers which factors make university systems most attractive and why the United States‘ universities so far win this contest for the best researchers. On the other hand, Martin Falk shows that Europe as a whole attracts most of international investment in knowledge capital.