Competitiveness in EU Member States

The latest overview of competitiveness for the 27 member states is here. Ireland gets a mixed review, with the Commission reporting:

Ireland has made good progress in achieving its adjustment programme’s goals. Despite the remaining challenges, these efforts have improved business prospects and strengthened competitiveness.

The challenge for Ireland is to improve the prospects of the domestic SMEs. The sector is held back by weak domestic demand, lack of innovation, problems with access to finance, and rising costs of doing business at local level. The government should continue to keep a close eye on access to finance, as improvement in this area is crucial for future growth. The lack of domestic demand and lack of finance have lowered the level of investment in equipment, which remains under the EU average.

The Irish government’s ‘Action Plan for Jobs 2012’ is a broad-based plan to address these challenges. If implemented steadfastly, it could considerably reduce the differences in the competitiveness of the domestic and multinational sectors. The challenge is to avoid the fragmentation of efforts, and to increase policy focus on the most promising initiatives enhancing innovation and growth.

They show the following graph for Ireland, which makes for interesting reading.

By Stephen Kinsella

Senior Lecturer in Economics at the University of Limerick.

3 replies on “Competitiveness in EU Member States”

Ireland does better than the EU average in terms of business environment, total exports and educational attainment, and much better in terms of labour productivity.

Where Ireland does badly is in terms of investment and very badly on bank lending.

It seems as if the question of competitiveness should focus on these latter issues.

Would the labour productivity skew have anything to do with the way Multinationals book profits through their offices here?
Are these productivity levels inviting us to delusion???

@ Al

Yes on the MNC impact on productivity and exports!

The 10th ranking in the World Bank’s ‘Doing Business 2012’ is very good.

Greece is at 100 with Yemen at 99 and Papua New Guinea at 101.

Italy is at 87 with Mongolia, a communist ruled country until 1990, at 86 and Jamaica at 88.

Drugs and medical devices account for almost 65% of merchandise exports but despite a jump in output (some fake), staff levels have hardly changed since 2004.

Up to 40% of services exports are fake.

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