Europe Has The Potential to Create 15 Million Additional Jobs and Increase GDP by 8 Percent by 2020 According to a New Study by Government of the Future Center
Government transformation key to stimulating growth and boosting the European economy by €1.2 trillion
Europe Has The Potential to Create 15 Million Additional Jobs and Increase GDP by 8 Percent by 2020 According to a New Study by Government of the Future Center
BRUSSELS; May 17, 2011– Even as many European economies continue to struggle with job losses, high levels of public debt and the fallout from the recent global financial crisis, a new study by The Government of the Future Centre, a partnership among Accenture, College of Europe and Lisbon Council has identified public policy actions governments can take to significantly increase growth rates, create jobs and drive economic recovery.
The study – Driving Public Entrepreneurship: Government as a Catalyst for Innovation and Growth in Europe – conducted by the Accenture Institute for Health & Public Service Value and Oxford Economics found that as many as 15 million additional jobs could be created in the European Union by 2020 -- 7 percent above current 2020 employment estimates -- if governments use the economic and social policy levers at their disposal to mobilise a broad resource base, catalyze innovation and drive social progress and economic growth. The research found the Europe Union could potentially increase its overall Gross Domestic Product (GDP) growth rate by an additional 8 percent beyond current 2020 predictions, which would equate to a €1.2 trillion boost to the European economy.
Government as a Catalyst
The key finding from the research states that translating austerity into growth demands a profound change -- modernization and transformation of the state and its public services. Public spending across Europe makes up half of total GDP, with public sector employees accounting for 20 percent of the workforce. Governments are major consumers too: As a European average, public procurement budgets make up approximately 17 percent of total GDP. Therefore, the sheer economic size and power of government means it must lead the charge for reform by making dramatic changes in the way it delivers healthcare and social services, uses technology in its interactions with business and citizens, fosters growth in new areas such as sustainability and Health IT, reduces waste and fraud by leveraging analytics to improve tax and benefit systems and, importantly, in the way it procures goods and services. The report includes several examples of governments across Europe that are developing these new delivery models for employment, health and human services that showcase both cost reduction and performance improvements.
Based on interviews with senior leaders across Europe, the report concludes that there is a burning platform for public servants to become public entrepreneurs. It finds that:
- Many public service leaders are reshaping services to accommodate reduced budgets
- Some are beginning to embrace innovation as a means of driving public value
- But too few are actively considering how they can be leaders that inspire economic growth by radically adjusting the way they work around new, collaborative business models
“Governments today, and in the future, have an obligation to engage citizens and businesses to develop the new ideas, policies and solutions that will reshape Europe’s economy for the next generation,” said Accenture CEO Pierre Nanterme. “By leveraging technology to drive public sector transformation, in areas such as procurement reform and enhanced tax compliance, governments across Europe have the opportunity to achieve the mutually beneficially goals of social progress and economic growth.”
Jobs and Economic Growth for UK, Germany and Spain
Embracing these lessons could drive job creation opportunities and potential GDP growth rates across three European economies by 2020. As many as 2.6 million additional jobs could be created in the United Kingdom by 2020, signifying an increase in GDP to 3.1 percent per year, up from the 2.6 percent GDP growth rate within the current trajectory. An additional 3 million jobs could be created in Germany, for the same period, allowing for an increase in GDP to 2.8 percent per year from the 1.9 percent growth rate forecast. For Spain, the research found, an additional 1 million jobs could be created by 2020 with an increase in GDP to 2.1 percent per year, up from the 1.5 percent GDP growth rate currently envisaged.
Oxford Economics used advanced macro-economic modelling and analysis to develop the employment and GDP projections. John Walker, Chairman of Oxford Economics said, “Our economic modelling shows that Europe has plenty of untapped economic potential to grow both jobs and GDP at significantly faster rates than currently envisaged. To achieve this growth, government and businesses need to work together at radically changing the way we in Europe work, produce and consume to maximise the assets available, recognising the emerging socio and economic trends at home and abroad, and making sure that Europe is channelling such trends to drive growth.”
New Waves of Growth
Research by Accenture identified four socio-economic global trends, orNew Waves of Growth, impacting the global economy and driving opportunities for forward-thinking governments to catalyze innovation and public entrepreneurship.
- The “Silver” Economy: The graying of the population represents a major untapped growth opportunity as older people become more productive, retire later and remain active consumers of goods and services. The report shows how, through embracing the potential of connected health and social care innovation, governments can realize these opportunities.
- The resource economy: Intelligent energy, green infrastructure, resource management and carbon finance and investment (alongside regulation and environmental targets at national and EU levels) are important drivers for change—for businesses, government, voluntary agencies and private households. The report shows how, through smarter procurement and better public-private partnerships, cities like Amsterdam are creating the platform for greener outcomes and new economic growth.
- A multi-technology future: Public investment in technology and e-government is already driving growth in the technology sector. The report shows how, by tapping into the potential of open data and online services, governments can generate efficiencies and support innovation and growth in the wider economy.
- The emerging markets surge: Governments must encourage collaborative learning and skills development between Europe and developing economies whilst establishing new international markets for shared public sector innovation. The report shows how, through collaborative approaches to enterprise, learning and skills, governments can create opportunities from the rise of emerging markets.
Government of the Future Summit
The research was presented today at the Government of the Future Centre Summit in Brussels attended by high-level public sector policy makers and thought leaders from across Europe, including the Honourable Jean-Claude Juncker, prime minister of Luxembourg and president of Eurogroup.
Ann Mettler, executive director of the Lisbon Council said, “ Against the backdrop of the ongoing European debt crisis – and in view of building a new foundation for future prosperity – it is imperative that governments get serious about reinventing the state. This is a once-in-a-generation opportunity to modernise not only public services but also to use the state itself as a catalyst for innovation and growth in the broader economy. If we don’t embrace public entrepreneurship now, then when? The projections and proposals presented in this study are too important to be ignored. Business as usual is not an option in the post-crisis world, as even successful European economies struggle to create the necessary jobs and generate much-needed growth."
Professor Jörg Monar, director, political and administrative studies within the College of Europe added, “Public service reform has become a necessity in Europe – and one of increasing urgency. However, it must not simply be focussed on cost reduction but on wider systemic reforms and service transformation. The creation of a culture of innovation within governments can become the stimulus for operating models which are both more effective and more efficient not just across government but across the economic interaction between government, citizens and businesses. A revitalized and innovation oriented partnership between governments, citizens and businesses has the power to unlock much needed economic growth in Europe while safe-guarding high quality public services which remain essential for citizens.”
About the Government of the Future Centre
Founded in 2009 as a centre of excellence and practitioner-driven community, the Government of the Future Centre is dedicated to providing pragmatic and actionable solutions designed to help government agencies and other public-service organisations improve the social, economic and health outcomes of the people they serve through delivery of increased and improved public services. It is a new kind of ideas and solutions hub that recognises the interdisciplinary nature of state transformation and public-sector modernisation. Its three founding partners – Accenture, the College of Europe and the Lisbon Council – bring a broad range of experiences and knowledge, backed by strong research capabilities, to this fast-growing public service community. Its home page ishttp://www.governmentofthefuture.net
About Oxford Economics
Oxford Economics was founded in 1981 to provide independent forecasting and analysis tailored to the needs of economists and planners in government and business. It is now one of the world’s leading providers of economic analysis, advice and models—including forecasting for 190 countries, 85 sectors, and over 2,000 cities sub-regions in Europe and Asia; economic impact assessments; policy analysis; and work on the economics of energy and sustainability. Its home page is www.oxfordeconomics.com
About Accenture
Accenture is a global management consulting, technology services and outsourcing company, with more than 215,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$21.6 billion for the fiscal year ended Aug. 31, 2010. Its home page is www.accenture.com.
About Accenture Institute for Health and Public Service Value: The Accenture Institute for Health & Public Service Value is dedicated to promoting high performance in the healthcare sector and in public service delivery, policy-making and governance. Through research and development initiatives, the Institute aims to help healthcare and public service organizations deliver better social, economic and health outcomes for the people they serve. Our work lends clarity and guidance to help these organizations improve people’s lives through healthcare delivery and public programs. We apply analytical rigor to the compelling, real-world challenges faced by the healthcare sector and public service organizations. The result: Strategic insights on which healthcare professionals and public managers can both think and act. For more information please visit www.accenture.com/ihpsv
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