Effective Industry-led Growth Initiatives in Germany: What worked? Dr. Hubertus Bardt Tokyo, September 8, 2015

Transcription

1 Effective Industry-led Growth Initiatives in Germany: What worked? Dr. Hubertus Bardt Tokyo, September 8, 2015

2 A REFORM PERSPECTIVE REFORMS AND THE LABOUR MARKET STRUCTURAL REFORMS IN EUROPE Dr. Hubertus Bardt, Effective Industry-led Growth Initiatives in Germany: What worked?, September 8, 2015, Tokyo 2

3 Relevant factors of for business development Relevance for investment decisions: all enterprises (Germany), enterprises with export-import business (foreign countries) Scale from 0 "absolutely irrelevant" to 100 "absolutely essential" Source: Unternehmensbefragung IW Consult 2014 Dr. Hubertus Bardt, Effective Industry-led Growth Initiatives in Germany: What worked?, September 8, 2015, Tokyo 3

4 Development of conditions in Germany Average = 100; > 100: better than the average 150 regulatory framework 130 regulation 110 bureaucracy 90 infrastructure current year working relations costs IW Industrial competitiveness index Dr. Hubertus Bardt, Effective Industry-led Growth Initiatives in Germany: What worked?, September 8, 2015, Tokyo 4

5 Development of conditions in Japan Average = 100; > 100: better than the average 150 regulatory framework 130 regulation 110 bureaucracy 90 infrastructure current year working relations costs IW Industrial competitiveness index Dr. Hubertus Bardt, Effective Industry-led Growth Initiatives in Germany: What worked?, September 8, 2015, Tokyo 5

6 What blocked investments in Germany? Information in percent of the companies surveyed uncertain global economic development high energy costs high regulation 1) high labour costs weak economic development in Europe high bureaucracy 2) high taxes missing qualified employees weak domestic demand investment abroad to reduce costs infrastrucure deficits 3) investment abroad to incrase sales financial resources important investment obstacle 1) e.g. labour law; 2) e.g. approval procedures; 3) e.g. transport network, broadband network Source: Herbstumfrage 2014 des Instituts der deutschen Wirtschaft Köln Dr. Hubertus Bardt, Effective Industry-led Growth Initiatives in Germany: What worked?, September 8, 2015, Tokyo 6

7 Development of the real GDP per capita 2004= Scenario 1 - stagnation Scenario 2 - stopped downtrend Scenario 3 - return to supply side policy Scenario 4 - USA Scenario 5 - Sweden Scenario 6 - UK Source: Cologne Institute for Economic Research Dr. Hubertus Bardt, Effective Industry-led Growth Initiatives in Germany: What worked?, September 8, 2015, Tokyo 7

8 Development of the real GDP per capita 2004= Scenario 1 - stagnation Scenario 2 - stopped downtrend Scenario 3 - return to supply side policy Scenario 4 - USA Scenario 5 - Sweden Scenario 6 - UK actual development Source: Cologne Institute for Economic Research Dr. Hubertus Bardt, Effective Industry-led Growth Initiatives in Germany: What worked?, September 8, 2015, Tokyo 8

9 A REFORM PERSPECTIVE REFORMS AND THE LABOUR MARKET STRUCTURAL REFORMS IN EUROPE Dr. Hubertus Bardt, Effective Industry-led Growth Initiatives in Germany: What worked?, September 8, 2015, Tokyo 9

10 Employees subject to social security contribution Seasonally adjusted, in 1,000 Source: womua, Fotolia Source: Deutsche Bundesbank Dr. Hubertus Bardt, Effective Industry-led Growth Initiatives in Germany: What worked?, September 8, 2015, Tokyo 10

11 Number of unemployed in 1000 Source: Federal Statistical Office Dr. Hubertus Bardt, Effective Industry-led Growth Initiatives in Germany: What worked?, September 8, 2015, Tokyo 11

12 Employment rate by age in per cent of the population at the age of years years years total (15-65 years) Source: Federal Statistical Office Dr. Hubertus Bardt, Effective Industry-led Growth Initiatives in Germany: What worked?, September 8, 2015, Tokyo 12

13 Average retirement age in years Only old-age pensions: without disability cases and survivors benefits Source: German Pension Insurance Dr. Hubertus Bardt, Effective Industry-led Growth Initiatives in Germany: What worked?, September 8, 2015, Tokyo 13

14 Structure of the labour force in percent of the 15 to 64-year-old population unemployed person other employed persons low income employees normal and high-income employees Source: Cologne Institute for Economic Research; database: SOEP Dr. Hubertus Bardt, Effective Industry-led Growth Initiatives in Germany: What worked?, September 8, 2015, Tokyo 14

15 A REFORM PERSPECTIVE REFORMS AND THE LABOUR MARKET STRUCTURAL REFORMS IN EUROPE Dr. Hubertus Bardt, Effective Industry-led Growth Initiatives in Germany: What worked?, September 8, 2015, Tokyo 15

16 Reforms of selected euro area countries Reform rate of the OECD Source: OECD, 2013 Dr. Hubertus Bardt, Effective Industry-led Growth Initiatives in Germany: What worked?, September 8, 2015, Tokyo 16

17 Employment protection legislation Scale from 0 (very flexible) to 6 (very rigid) For regular contracts of employment and in cases of individual or collective dismissals. Sources: OECD; Cologne Institute for Economic Research Dr. Hubertus Bardt, Effective Industry-led Growth Initiatives in Germany: What worked?, September 8, 2015, Tokyo 17

18 Product market regulation Scale from 0 (very flexible) to 6 (very rigid) Sources: OECD; Cologne Institute for Economic Research Dr. Hubertus Bardt, Effective Industry-led Growth Initiatives in Germany: What worked?, September 8, 2015, Tokyo 18

19 Regulatory intensity for starting up a business Scale from 0 (worst performing country) up to 100 (best performing country) Greece Spain Portugal Italy Source: World Bank Doing Business database Dr. Hubertus Bardt, Effective Industry-led Growth Initiatives in Germany: What worked?, September 8, 2015, Tokyo 19

20 Doing Business Ranking Rank 2009 Rank 2014* Portugal Spain Italy Greece Rank: The country with the most business-friendly regulation has rank 1. *rankings of the Doing Business issues in 2015 and 2009 (reference point is in each case June of the year before) are not comparable completely, because in 2015 (2009) 189 (183) countries were evaluated and, besides, there were methodical changes. Sources: World Bank, Doing Business database Dr. Hubertus Bardt, Effective Industry-led Growth Initiatives in Germany: What worked?, September 8, 2015, Tokyo 20

21 Recent economic growth Change of real GDP compared with the previous quarter in per cent (seasonally and working day adjusted) Source: Eurostat Dr. Hubertus Bardt, Effective Industry-led Growth Initiatives in Germany: What worked?, September 8, 2015, Tokyo 21

22 Holistic approach to reform Any deficiency revenge radically Vision Competence Action plans Instruments Incentive Communication Success Competence Action plans Instruments Incentive Communication Confusion Vision Action plans Instruments Incentive Communication Uncertainty Vision Competence Instruments Incentive Communication Chaos Vision Competence Action plans Incentive Communication Frustration Vision Competence Action plans Instruments Communication Delay Vision Competence Action plans Instruments Incentive Rejection Source: Motorola University; Cologne Institute for Economic Research Dr. Hubertus Bardt, Effective Industry-led Growth Initiatives in Germany: What worked?, September 8, 2015, Tokyo 22

23 Dr. Hubertus Bardt Managing Director Head of Research