Christine Lagarde: Fostering sustainable growth in Europe

• [1] Yet the pandemic also provides the opportunity to reassess how we will organise our economy in the future.
• Todays conference, on the topic of Towards a New Sustainable Growth Model, comes at just the right moment.
• By necessity, the pandemic has accelerated our wider and more common use of digital technology.
• We have adjusted how we work, how we shop and how we pay.
• E-commerce increased by almost one-fifth during the first lockdown[2], and it stayed at that level even after restrictions were lifted.
• It could lead to a less resource-intensive economy, allowing carbon emissions to be decoupled from economic growth more quickly.
• It could give a jolt to productivity, especially in Europe: consider that IT adoption has been a key factor in the United States exhibiting faster productivity growth than Europe since the 1990s.
• Successfully sustaining growth requires progress along a number of dimensions, but in particular it will be vital to harness the opportunities offered by new technologies.

Innovation

• Lets start with innovation.
• This means building an environment that rewards experimentation and innovation and that tolerates failure.
• Innovation takes place at the intersection between science, markets and finance.
• For example, one factor behind the United States success in generating cutting-edge innovation comes from its knowledge hubs, where research labs, universities and investors operate in close proximity.
• A deep, complete and digital Single Market would allow firms to expand faster and achieve European scale, thereby increasing the return on innovation and capitalising on a large market.
• Recent analysis shows that equity finance helps to reduce an economys carbon footprint and to increase the rate of green innovation.
• Third, the public sector itself has a role to play in creating demand for innovation.
• Governments can help scientific ideas become commercial reality by linking research and teaching more closely in our innovation ecosystems.
• And European entities like the European Investment Bank are now fully focused on accelerating clean energy innovation and adoption of renewables.

Education

• [19] And this brings me to the second area: education.
• While the pandemic has opened up new opportunities for online learning, we have also seen that these opportunities have been challenging to implement.
• Schools and universities have faced significant disruption over the course of this year, and there is a risk that the negative effects of this disruption could linger.
• Research indicates that the long-term socioeconomic status of children born during pandemics can be negatively affected.
• In the first half of this year, employment for 15 to 24-year-olds dropped by almost 5%.
• Modern online learning includes massive open online courses, fully online masters degrees and other online material accompanied by classroom interaction.
• This is why we have to seize the opportunity and invest in education and training now.
• Even if innovation and education can raise long-term growth, we are likely to face increasing volatility around that growth path.

Conclusion