Communication from the Commission - Structural indicators
Date: 2000-09-27
Institutions: European Commission
Subjects: European social policy, economic planning, economy, report, structural policy

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 27.9.2000
COM(2000) 594 final

COMMUNICATION FROM THE COMMISSION

Structural indicators

COMMUNICATION FROM THE COMMISSION

Structural indicators

ABSTRACT

The objective of this
Communication is to
provide a first set of
indicators for the
synthesis report.

The indicators selected
should allow us to
measure progress
towards the
implementation of the
Lisbon strategy…

… but should remain
limited in number.

This Communication proposes a set of indicators to be used
in the synthesis report for the Spring 2001 European
Council. It meets the request of the Feira European Council
that the Commission should present a report by the end of
September “on the proposed approach for the indicators
and benchmarks, both in specific policies and to be used in
the synthesis report to the Spring European Council, to
standard
ensure
presentation.”

coherence

necessary

and

the

of

aimed

strategy

the European Union

The choice of the indicators depends on the purpose of the
synthesis report, which is to assess progress towards the
implementation
at
the Lisbon
transforming
into “the most
competitive and dynamic knowledge-based economy in the
world capable of sustainable economic growth with more
and better jobs and greater social cohesion.” The Lisbon
conclusions call for a report and indicators in four policy
domains: employment, innovation, economic reform and
social cohesion, and they also underline the importance of
an appropriate policy-mix in achieving this strategic aim.

The main purpose of the indicators selected for use in the
synthesis report is to measure progress in these four policy
domains.
In addition, some background indicators are
included to present an overall economic context in which
structural reforms are taking place. Although the indicators
have been categorised into four domains there are close
linkages between these policy domains and with overall
economic performance.

The Communication puts forward 27 key indicators which
is a small enough number to focus the policy debate and to
be manageable but, at the same time, sufficiently large to
offer a balanced picture of how the economy is performing
across the four policy domains. This list has been compiled
from the many more detailed indicators available in the
their
different processes and action plans which treat
respective subject matters in greater detail.

In making the selection the main aim has been for the
indicators to meet the Lisbon request that they effectively
measure progress in the four domains. Several other factors
have been taken into account, most notably the availability

2

The development of
indicators is an on-
going process.

The indicators form
different elements of
the same picture…

… to be developed in
the synthesis report

The rationale behind
the choice of the
indicators is …

… to present the
overall economic
environment, in which
structural reforms are
taking place and…

… to assess
employment creation;

and comparability of the data and the need not to put too
much of a data-collection burden on the Member States.

This is the first year in which a set of indicators is to be
agreed and in which a synthesis report will be written. The
use of indicators and benchmarking has been proceeding at
different speeds in different areas and there is further on-
going work in all of the policy domains. As a result, the
Communication emphasises the need for flexibility in the
list of
in the
indicators available. The Communication also includes a
list of indicators to be developed as a reflection of the need
to improve the data in the future.

indicators to allow for

improvements

the
The maintenance of an appropriate policy-mix,
reforms to improve the
implementation of structural
functioning of markets and to reinforce the capacity of the
economy to innovate and the development of policies in
support of employment creation and social cohesion are
the
reinforcing
complementary
achievement of a competitive and dynamic knowledge-
based economy. Therefore, the indicators selected should
not be seen in isolation but rather as different elements of
the same picture.

elements

and

in

The synthesis
report, by measuring Member States'
progress in meeting key economic and social policy
objectives, will help us to identify their strong and weak
points in terms of performance, thus paving the way for
policy action. However,
indicators are no
substitute for in-depth qualitative assessments.

structural

A short description of
the interpretation and policy
relevance of each selected indicator is provided in the text.

The general economic background indicators provide the
overall economic context in which the structural reforms of
labour, product and capital markets take place. The
indicators relate to sustainable growth and economic
dynamism because this is the ultimate goal of structural
reforms but also to macroeconomic stability because an
appropriate policy-mix should reinforce the positive effects
of these reforms.

Employment creation is the key to greater economic
the Lisbon
welfare and social cohesion. Therefore,
European Council emphasised the need to strengthen
employment
in the Union by developing an active
employment policy. Specific targets have been defined in
terms of the employment rate and the female employment
rate and these two rates, as well as the employment rate of
older workers, are included in the employment indicators.

3

The unemployment rate and long-term unemployment rate
highlight structural problems in the labour market. Life-
long learning is included as a key element of an active
employment policy, while the tax rate on low-wage
the
as
workers
incentives/disincentives to employment, especially for less
skilled workers.

one measure

included

of

is

… the capacity of the
Union to innovate;

… reforms in product
and capital markets;
and

… social cohesion.

Improving the capacity of the Union to innovate is another
essential element of the Lisbon strategy. The investments
in education, research and development and information
and communication technologies are included as indicators
of the effort made in these areas. The effectiveness of this
effort is measured by the development of internet access,
patents in high-tech areas and exports of high-tech
is also considered because
products. Venture capital
efficient
role in
innovative high-growth SMEs.

risk capital markets play a major

that

reform,

structural

full benefits of

takes into account

a
To reap the
the
comprehensive approach,
linkages between the different markets,
is necessary.
Therefore, labour market and innovation policies have to
be accompanied by reforms of product and capital markets.
The economic reform indicators measure progress in
achieving more efficient and better functioning product and
capital markets. Indicators on trade integration and relative
price levels are included to gauge the progress made in
improving market
integration and efficiency. Prices in
network industries gauge the progress made in liberalising
these sectors, and indicators on public procurement and
state aid measure distortions in the functioning of product
markets arising from public intervention. For capital
markets, indicators on cross-border banking and capital
raised on stock markets measure
financial market
integration and efficiency.

The development of the knowledge-based society and the
introduction of economic reforms has to go hand in hand
with strong social cohesion. The social cohesion indicators
include indicators on the degree of poverty and income
dispersion and the associated risk of social exclusion.
Regional disparities are measured by an indicator
for
regional cohesion. The indicator on educational outcomes
reflects the importance of poor educational attainment as
one contributing factor to social exclusion. However, in the
social field in particular the work on indicators is still at an
early stage and more suitable indicators are to emerge in
light of work done by the High Level Group on Social
Protection.

4

COMMUNICATION FROM THE COMMISSION

Structural indicators

I.

BACKGROUND

Article 2 of the Treaty lays down the Union objectives of promoting
1.
economic and social progress and a high level of employment. At the Lisbon Special
European Council held in March 2000, the Union set itself the “strategic goal for the
next decade: to become the most competitive and dynamic knowledge-based economy
in the world capable of sustainable economic growth with more and better jobs and
greater social cohesion” (Paragraph 5 of the Council Conclusions). The Council
acknowledged the need to regularly discuss and assess progress made in achieving
this goal on the basis of commonly agreed structural indicators. To this end, it invited
(Paragraph 36): "… the Commission to draw up an annual synthesis report on
progress on the basis of structural indicators to be agreed relating to employment,
innovation, economic reform and social cohesion."

2.
The Feira European Council of June 2000 requested that the Commission
start preparing this work by “presenting a report by the end of September on the
proposed approach for indicators and benchmarks, both in specific policies and to be
used in the synthesis report to the Spring European Council, to ensure the necessary
coherence and standard presentation” (Paragraph 38, third indent).

This Communication is the Commission’s response to the request from the
3.
Lisbon and Feira European Councils. The Communication sets out a set of key
indicators to be used in the Spring 2001 synthesis report. Section II gives the
motivation for using structural indicators and it presents the main advantages but also
the shortcomings of this approach. Section III presents an analytical framework
bringing together the key elements of the Lisbon strategy and illustrating the multiple
linkages between them. Section IV introduces the main principles that have guided the
process of selecting the indicators. Section V presents the key indicators themselves.
A short description of each indicator’s interpretation and policy relevance is provided.
Finally, as the work on indicators is an on-going process and since some particularly
useful indicators are not currently available due to methodological and statistical
problems, Section VI identifies the main areas where indicators should be developed
in the future.

II.

PURPOSE OF USING INDICATORS

4.
The motivation behind using structural indicators and regularly examining
structural performance on the basis of commonly agreed quantitative indicators is
essentially twofold:

(i) monitoring progress both in achieving the identified targets and in

implementing policies; and

(ii)

assessing the effectiveness of policies.

5

Whilst it appears that objective (i) can be achieved relatively easily (though it
5.
may require considerable statistical work), objective (ii) is much more challenging as
it requires an understanding of the relationship between policy actions and measured
results. For example, progress in the opening up of public utilities to competition can
be monitored by examining the change in market structure due to new entrants
coming into the market. However, the effectiveness of this liberalisation process is
more difficult to assess. Such an assessment can in any case be made only after the
fact, when the necessary data (on prices for these public utility services, for example)
have become available. Nevertheless, an evaluation of the effectiveness of past
policies may carry important lessons for the future.

Experience with the surveillance of economic policies in recent years,
6.
especially of economic reforms, has shown the need for the quantification of
economic performance and policy effort. Increasing use is made of benchmarking and
peer pressure for policy monitoring and co-ordination. Both instruments help to
identify shortcomings and strengths in structural performance at both the Community
and Member State level. However,
reliable
indicators that are comparable across countries and over time are needed for all
Member States, for the European Union as a whole, as well as for the countries used
as benchmarks.

these instruments,

to fully exploit

7.
The strategic goal of the Union “to become the most competitive and
the benchmark
dynamic knowledge-based economy in the world…” implies that
countries should in principle be the best performers in the world. However, one needs
to be pragmatic about the choice of benchmarks. In practice, data availability will
very often limit the actual choice of benchmarks to the best EU Member States or the
US. Indicators at the EU level will be needed as well, for example, in order to
compare GDP per capita both between EU countries and between the EU and the US.

Simple and objective quantitative policy and performance indicators can play
8.
an important role in highlighting problems, measuring progress in achieving the
targets identified, guiding policy makers in their policy efforts, and focussing public
attention on what is at stake. However, many indicators do not warrant a strong
(normative) interpretation, i.e. to suggest that high or low values of the indicator are
good or bad, and must be interpreted in conjunction with other information or in
combination with other indicators. For example, labour productivity functions well as
labour
an indicator of good economic performance, although high levels of
productivity observed in some countries may be indicative of labour shedding or
insufficient job creation.

Finally, because of data limitations and differences in institutional and
9.
structural features, it is often difficult to achieve full comparability across countries.
Moreover,
the various indicators are to different degrees affected by cyclical
variations. Clearly, indicators are no substitute for in-depth qualitative assessments.
For all these reasons, the structural performance indicators presented here can only be
interpreted in the context of the analytical framework that the synthesis report will
provide.

6

III.

ANALYTICAL FRAMEWORK

10.
The indicators selected here will be the basis of the Commission’s annual
synthesis report. Naturally, the choice of indicators depends on the purpose of this
report. As defined in Lisbon, the synthesis report will focus on progress in four policy
domains (employment,
innovation and research, economic reform and social
cohesion), in the perspective of the strategic goal outlined in Lisbon to make the EU
the most competitive economy in the world. This will also help ensure the overall
coherence of the structural policies in the four policy domains and effectively monitor
progress made in these four domains. Where appropriate, this will lead to policy
orientations.

The key indicators selected for use in the synthesis report should thus allow
11.
the measurement of progress in the four policy domains.
In addition, some
background indicators are included to present an overall economic context in which
structural reforms are taking place. Experience shows that a stable and sound
macroeconomic framework is a pre-condition for growth and employment. Overall
economic performance indicators are also helpful to measure the progress achieved
towards the strategic goal mentioned above.

12.
The indicators should not be seen in isolation but rather as different elements
of the same picture. The ultimate goal of structural reforms (see box) is to improve the
dynamism and efficiency of the EU economy because this drives growth and
employment creation, which, in turn, aids the fight against social exclusion. A healthy
economic outlook and favourable growth prospects sustained by an appropriate policy
mix should greatly facilitate the introduction of the structural reforms and maximise
the
results. The development of policies in support of social cohesion,
their
implementation of structural reforms aimed at better functioning markets, and the
maintenance of
thus
complementary and reinforcing elements in the creation of a competitive, dynamic
and knowledge-based economy.

an appropriate mix of macroeconomic policies

are

Box: The tools of structural reform

Structural policies focus on the supply side of the economy. They aim to increase the level of potential
output by raising the supply of factors of production (labour or capital). Alternatively, they aim to improve
the functioning of labour, capital or product markets thus increasing the efficiency with which factors are
combined and the flexibility with which an economy responds to shocks. Either way, they should result in
a rise in the sustainable economic growth rate of an economy.

A distinction is normally made between raising the quantity and the quality of labour supplied (leading to
more and better jobs). The quantity of labour supplied depends on many factors (including the population
growth rate, the employment rate, working hours) that may to a different degree be influenced by policy.
Similarly, labour quality (or ‘human capital’) may be raised through education, training, life-long learning
or measures more specifically targeted at raising the social cohesion of society.

Investments in infrastructure and equipment, but also in innovation and research, will raise an economy’s
capital stock. Policy measures aimed at stimulating such investment may work either by reducing the cost
of the financial capital required (through better functioning capital markets, e.g.) or by raising the expected
return on the investment.

Better functioning and more efficient markets contribute to lowering the costs of labour and capital
(stimulating the use of these factors of production) as well as reduced price levels (contributing to
macroeconomic stability). Also, more flexible markets allow an easier adjustment to economic shocks,
permitting the economy to reach its maximum potential through a more efficient allocation of resources.

7

Reforms in the four policy domains are mutually reinforcing as there are
13.
multiple linkages between them and with overall economic performance. The shift to
a knowledge-based economy can be a powerful engine for growth, competitiveness
and jobs. However,
this engine will only run smoothly if not perturbed by
macroeconomic disturbances or hampered by structural bottlenecks. This implies on
the one hand, the continuation of a stability-oriented monetary policy supported by
sound fiscal policies in a context of wage moderation and on the other, an acceleration
of structural reforms in the EU’s labour, capital and product markets. In particular, the
speed of technological change may require new and more flexible regulatory
approaches. Also, unless all citizens are equipped with the skills needed to live and
work in this new information society, the engine risks running out of fuel.

14.
People are Europe’s main asset and should be the focal point of the Union’s
policies. Employment creation, investing in people and developing an active and
dynamic welfare state will be crucial both to Europe’s place in the knowledge
economy and for ensuring that
the emergence of this new economy does not
compound the existing social problems of unemployment, social exclusion and
poverty. At the same time, an effort must be made to ensure that Europe offers
attractive prospects to its best brains. Innovation and ideas must be adequately
rewarded and the regulatory climate must be made more conducive to investment,
innovation and entrepreneurship.

To reap the full benefits of structural reforms a comprehensive and coherent
15.
approach, that takes into account the linkages between different markets, is necessary.
For example, capital market reforms leading to an increased availability of risk capital
are an important element of efforts to stimulate research and innovation, which should
contribute to raising the competitiveness of the European economy. However, they
have to be accompanied by more reform efforts in labour and product markets to
produce jobs and increased welfare. Without better functioning labour markets,
making it easier to create and to take up jobs across firms and sectors, employment
and growth opportunities created by capital market reform and innovation will not be
seized. Similarly, a failure to liberalise product markets and to complete the internal
resulting in losses of
market will
competitiveness and jobs. A comprehensive reform effort may also serve to increase
macroeconomic stability. By removing supply-side bottlenecks, economic reforms
will allow the EU to have higher growth rates while maintaining low inflation, which
should help to reduce the high levels of structural unemployment and raise social
cohesion.

leave prices at continued high levels,

16.
Economic reform and social cohesion are mutually reinforcing. On the one
hand, better-functioning markets create jobs, improve productivity and increase social
and economic cohesion. For example, economic reforms in the telecommunications
market have led to increased competition and productivity, resulting in lower prices
and greater access to the Internet and other communication services. On the other
hand, it is easier to introduce the reforms necessary to improve market functioning in
a society that exhibits a strong social cohesion. Well-designed social policy can also
contribute directly to better economic performance. The broad range of efforts
undertaken to strengthen the cohesion of the European Union are therefore key to
maintaining the momentum in transforming the EU into the most competitive and
dynamic knowledge-based economy in the world.

8

IV.

SELECTION PROCESS

17.
The number of the key indicators to be used in the synthesis report should be
small enough to focus the policy debate and to be manageable, and at the same time
sufficiently large to offer a balanced picture of how the economy is performing across
the four different policy domains. In this Communication, a list of 27 indicators for
the four policy domains is presented, which is relatively limited considering the broad
indicators
range of structural policies covered and the many possible structural
existing in these different areas. The advantage of focusing on a limited number of
indicators is that it allows policy makers to send simple and clear messages. It would
be difficult
to reduce this number further without putting at risk the effective
monitoring of progress towards the new strategic goal defined in Lisbon.

18.
A large number of the indicators selected have recently been used in drawing
up the Broad Economic Policy Guidelines, which are increasingly focusing on the
medium- and long-term implications of structural policies and on reforms aimed at
promoting economic growth, employment and social cohesion, as well as on the
transition towards a knowledge-based economy. The various indicators used in the
Luxembourg and Cardiff processes as well as in the different action plans, which treat
their respective subject matters in greater detail, have been taken into account. As a
result, the list of indicators proposed for use in the synthesis report is a good reflection
of the main performance and policy indicators used in these different exercises.
Nevertheless, the analysis in the synthesis report might lead to identification of new
needs and therefore new indicators, thus requiring a reassessment of the list.

19. Within these various exercises, work on new indicators or to improve
currently used indicators is on-going. This work must continue, taking into account
the choice of indicators to be developed for future use in the synthesis report. At the
same time,
the list of indicators prepared for the synthesis report should be
sufficiently flexible to take into account the progress made in the various domains in
developing new or improved indicators (such as the work on social cohesion currently
being carried out by the High Level Group on Social Protection). This also implies
that this work on indicators is an on-going exercise and that the list could be adapted
to include new indicators recently developed, such as those proposed in section VI.
Similarly, a coherence between the indicators used in the different policy areas should
be assured.

In some areas, an agreement on indicators has been reached and the production
20.
of statistics is well established, while in others the effort to develop a set of relevant
indicators and to collect the necessary data has started only recently. Nevertheless, as
far as possible, in selecting and developing the indicators to be used in the synthesis
report, the same basic principles have been observed across the board.

21.
The set of indicators should be relatively stable over time to ensure continuity;
the indicators should be: (i) easy to read and understand; (ii) policy relevant; (iii)
mutually consistent; (iv) available in a timely fashion; and (v) comparable across
Member States and, as far as possible, with the US (vi) selected from reliable sources;
finally, (vii) the data requirements should not impose too large a burden on Member
States and enterprises. This explains why the selected indicators are based as much as
possible on information provided by the European Statistical System. A number of
additional indicators which are deemed essential for the assessment of progress made

9

in the different policy domains but for which quality data are currently unavailable,
are presented in a separate list. Finally, it should be borne in mind that where feasible
and relevant the indicators should be disaggregated by gender.

A majority of the indicators selected are performance indicators which
22.
measure Member States' progress in meeting key economic and social policy
objectives and help to identify their strong and weak points in terms of overall and
structural performance. As an illustration, the evolution of the European social model
may be gauged by income distribution statistics and poverty rates. However, policy
indicators which are directly related to the policy priorities set out in the Lisbon
conclusions are also used to highlight Member States’ efforts in specific fields. For
example, this is the case with variables such as spending on R&D and education. It
should be noted, though, that in several areas the distinction between policy and
performance indicators is not clear. Therefore, this distinction has not been retained in
the proposed set of indicators. It may also be useful to point out the difficulty of
measuring policy effectiveness using such a limited set of indicators. Often, there is a
significant time lag between the moment that new policies are implemented and the
moment that the first results become visible. Therefore, the indicators selected should
be considered primarily as measures of progress and not so much of policy
effectiveness.

V.

KEY INDICATORS SELECTED

23.
The key indicators selected for use in the synthesis report are classified under
the four Lisbon policy domains: employment, innovation and research, economic
reform and social cohesion. Due to the close linkages between these different policy
domains the classification of an indicator under one or the other heading is not always
clear. An indicator such as the long-term unemployment rate, for example, may reflect
structural problems on the labour market as well as the risk of social exclusion.
Similarly, public expenditure on education may be considered as an investment
raising the innovative capacity of society but also as a factor of skill development and
quality of work.

24.
In addition, some background indicators are suggested to illustrate the overall
economic context in which the structural reforms are taking place. These indicators
are related to sustainable growth, economic dynamism and a sound, stability oriented
macroeconomic environment. GDP per capita (in PPS) and the real GDP growth
rate are the most common measures of the standard of living and economic growth,
which are directly related to the growth ambitions expressed in Lisbon. However, this
growth can only be sustained in the long run if the energy intensity of the economy
remains within limits. Labour productivity (per person employed and per hour
worked) is an indicator of the overall efficiency and dynamism of the economic
system. The inflation rate permits to assess whether growth takes place in a sound,
the cyclically adjusted budget
stability-oriented macro environment. Finally,
balance is particularly important
to assess underlying budgetary
in order
developments.

Annexes 1 and 2 of this Communication present

25.
the complete list of
indicators, as well as their definitions, sources and availability. Annex 3 provides

10

illustrations of the selected indicators. In principle, these illustrations show annual
data for each of the 15 Member States, the European Union as a whole and the United
States. Clearly, such illustrations are insufficient for conducting an in-depth analysis
of progress made towards the Lisbon goals and this analysis will be made in the
synthesis report.

V.1

Employment indicators

26.
One of the key aims of the strategic goal set at the Lisbon summit is to
strengthen employment in the Union as part of the knowledge-based society, with the
ultimate objective of full employment. In accordance with the priority given to
employment, a strategic target for employment was set: the EU should achieve an
average employment rate as close as possible to 70% by 2010. The European Council
also stressed the importance of equal opportunities for women and men and increased
participation in the labour market by women, and set a similar target for female
employment – the aim is to reach an average female employment rate of more than
60% by 2010.

As well as creating the economic conditions for strong growth and sustained
27.
employment creation, the European Council highlighted the importance of an “Active
Employment Policy”. The key elements of
improving
employability; addressing the problem of skills gaps; focussing on lifelong learning;
ensuring equal opportunities; and increasing employment in services, where there are
major shortages.

this policy include:

28.
The list of indicators on employment is firstly intended to cover the two
employment targets set by the European Council. The employment rate of older
workers is also included, as the encouragement of such workers back into the labour
market is a key component of the strategy to increase labour market participation. In
view of the ageing population, the employment rate of older workers is becoming
increasingly important. Contrary to the case of youth unemployment, the general
improvement in economic conditions has had little effect on the employment of older
workers. Unemployment rates, and in particular the long-term unemployment rate,
are also in the list to highlight structural problems in the labour market. The average
tax
the
incentives/disincentives to employment in national tax and benefit systems. Finally,
an indicator for lifelong learning is included as one of the key elements of an active
employment policy.

low paid workers

one measure

included

rate

on

of

as

is

Indicator 1 : Employment rate

Indicator 2 : Female employment rate

These first two indicators are a direct reflection of the strategic targets set by the
European Council for employment. The inclusion of the female employment rate also
reflects the importance attached to equal opportunities by the European Council, as
well as the key role that increased female participation in the labour market and
increased female employment will play in meeting the overall employment target.

Indicator 3 : Employment rate of older workers

Low employment rates for older workers in Europe are an indication of low
participation of such workers in the labour market due to structural problems.

11

Moreover, non-employed older workers are at risk of being permanently excluded
from the jobs market, and accordingly of being socially excluded.

Indicator 4 : Unemployment rate

As well as being an indicator of overall macroeconomic performance, persistent
trends in unemployment rates can reflect a number of structural factors impeding job-
seekers from finding employment, such as low skill levels, inadequate assistance to
job-seekers, overly generous benefit provision, and high tax rates on labour.

Indicator 5 : Long term unemployment rate

is a good
The long-term unemployment rate has been included here because it
reflection of structural problems on the labour market. Moreover, the long-term
unemployed are susceptible to the erosion of their job skills, thus reducing their
employability, and are likely to face a high risk of social exclusion.

Indicator 6 : Tax rate on low-wage earners

The Lisbon European Council called on the Commission and the Council to assess
whether adequate measures have been taken to alleviate the tax pressure on labour -
especially on the relatively unskilled and the low-paid - and to improve the
employment and training incentives of tax and benefit systems. The average tax rate is
one measure of the incentives/disincentives to employment included in tax and benefit
systems. This indicator measures the average tax rate on low wage earners, that is
those workers with a wage at or below a specified share of the wage of the average
production worker.

Indicator 7 : Lifelong learning (adult participation in education and training)

The conclusions of
the Lisbon Council stress the importance of an Active
Employment Policy, of which lifelong learning is a key element. Continuous
education and training is essential to enhance the skills of the workforce, ensuring
their adaptation to the new knowledge-based society and their employability. The
indicator “adult participation in education and training” needs to be further improved
in view of comparability problems between some Member States.

V.2

Innovation and research indicators

Technological progress and improvements in the quality of labour and capital
29.
inputs into the production process account for between 25 and 50% of economic
growth and are the principal driving force for competitiveness and employment. This
observation explains why improving the capacity to innovate is an essential element
in Lisbon to increase growth and
of the European Union’s strategy set out
employment. The Lisbon conclusions also note that the transition to a knowledge-
based economy should be facilitated by better policies for R&D, education and the
information society.

30.
The Lisbon Council encouraged the Union to work towards the objectives set
out in the Commission Communication “Towards a European Research Area.” This
would imply more investment in the education and training of the labour force and an
increase in expenditure on research and development. Ultimately, this should result in
a rise in the number of patents registered and an increased specialisation in high-tech

12

and high value-added industries. The Commission Communication “Innovation in a
knowledge driven economy” proposed the benchmarking of innovation performance
and policies as a means of identifying and disseminating good practice in this area.

The transition to the information society will facilitate the emergence of a
31.
thriving market place for innovative products. However, such a market can grow only
if the basic infrastructure is in place to make the market easily accessible to all.
in information and communication technologies are therefore
Further investment
needed. In more general terms, the Lisbon conclusions stress that realising Europe’s
full e-potential depends on creating the conditions for electronic commerce and the
Internet to flourish.

32.
The list of indicators should therefore include those that measure investments
in education, R&D and information and communication technologies (ICT) as well as
their effects on the capacity of the European economy to innovate and to increase its
international competitiveness in high-technology products. An indicator measuring
the development of venture capital investment is also listed, because efficient risk
capital markets play a major role in innovative high-growth SMEs.

Indicator 1 : Public expenditure on education

The Lisbon Council recommended that public expenditures be redirected towards
In a rapidly developing knowledge economy the
human capital accumulation.
educational attainments of the population are an increasingly important determinant of
economic growth and employment creation. The increased flexibility required in the
work and market places implies that learning should last a lifetime. As indicated in the
Lisbon conclusions this requires major investments in the national education and
training systems
from public authorities, enterprises and individuals. Public
expenditure on education is so far the most comprehensive available measure of such
investment (an indicator on public and private expenditure on human resources is
included as an indicator to be developed).

Indicator 2 : R&D expenditure

Investment in human capital alone is not sufficient for the creation of a stream of
innovative products. R&D expenditure gives an overall assessment of the research
effort made by industry and government. Access to scientific and technological
knowledge emanating from this research effort and the ability to exploit such
knowledge is key to the economic performance of countries and regions in the
increasingly competitive global economy. This is the reason why the Lisbon Council
conclusions stress the need for Europe to take greater advantage of the combined
resources devoted to R&D in the Member States.

Indicator 3 : ICT expenditure

One of the conditions for the development of the information society is the existence
of infrastructure through which businesses and homes can have fast connections to the
Internet. The creation of such an infrastructure network requires considerable
investment
in information and communication technologies. Expenditures by
businesses and households on ICT equipment, software and services are a necessary
complement to the investments made in ICT networks. In combining these two

13

elements, total ICT expenditure is a comprehensive measure of the effort made in this
domain.

Indicator 4 : Level of Internet access

The effectiveness of this effort is measured by the percentage of all businesses and
homes connected to the Internet. This is in line with the Lisbon conclusions, which
stressed the need for the Union to catch up with its competitors by linking many more
businesses and homes to the Internet via fast connections. Tracking the connection of
schools to the Internet is also being developed in light of the call of the Lisbon
Council for full access by the end of 2001.

Indicator 5 : Patents in high-tech areas

The Council conclusions also mention that innovation and ideas must be adequately
rewarded, particularly through patent protection. As around 65% of R&D expenditure
is concentrated in five or six medium- or high-technology industries in almost all the
large industrialised countries, the number of patents in high-tech areas gives a first
indication of the potential for economic return on the R&D investment.

Indicator 6 : Exports of high-technology products

Clearly, the registration of a patent is not the final step in exploiting research efforts.
Innovations need to be reflected in new production processes or even completely new
products to be brought on to the market. For a country as a whole, high-tech exports
are a good reflection of the degree of comparative advantage in innovative industries
and, in more general terms of its international competitiveness.

Indicator 7 : Venture capital

Access to venture capital
is key to the development of innovative companies.
Financial institutions may be reluctant to finance such companies because of the risk
involved and the lack of collateral. Venture capital, combining financing,
management, and nurturing of risky projects is better adapted to this purpose. As
stressed by the Commission in its April 1998 Risk Capital Communication, and
endorsed by the European Council on several occasions, the creation of substantial
pan-European venture capital markets is essential to promote innovation and to
support economic growth.

V.3

Indicators of economic reform

33. With the completion of the Single Market Programme and the introduction of
the euro,
important steps have been taken towards creating an integrated and
competitive European market place. The Strategy for the Internal Market and the
Financial Services Action Plan are a continuation of efforts to foster and further
integration. Technological progress and globalisation have given an additional
impulse to these integration processes affecting both product and capital markets. In
order to fully benefit from the rapid technological and economic developments
brought on by the knowledge-based economy and the forces of globalisation, the
capacity of the European economy to adjust must rise. This will require more efficient
and better functioning labour, capital and product markets.

14

In this section on product and capital market reform, a distinction is made
34.
between indicators of market integration and of market efficiency. For the product
markets, the indicator list includes an indicator of trade integration, and an indicator
of relative price levels to reflect both market integration and efficiency. In addition,
the evolution of prices in network industries is considered as an indicator of progress
in the liberalisation of these sectors. Finally,
two indicators measuring possible
distortions in the functioning of product markets caused by public intervention are
proposed. For capital markets, the list consists of two indicators on financial market
integration and efficiency.

Indicator 1 : Trade integration

This indicator measures trade integration in goods only. The aim of the Single Market
Programme and the new Internal Market Strategy is to create a truly integrated
European market place where national borders would no longer affect trade flows.
The assessment of whether and to what degree this aim has been reached can be based
on the analysis of developments in such trade flows. To allow for the fact that smaller
economies tend to be more integrated, Member States will be grouped into large and
small economies, and the comparisons will be made between Member States within
each group.

Indicator 2 : Relative price levels and price convergence.

If price levels in a Member State are well above those observed in others, this may be
an indication of insufficient competition or other forms of market inefficiency, even
taking into account the other factors which can cause high relative price levels such as
income and tax levels. Furthermore, large differences in price levels between the EU
Member States can be an indication that markets are not yet fully integrated. Progress
in EU market integration may be assessed by looking at price convergence. However,
even in integrated markets such as the US, sizeable price differences continue to exist.

Indicator 3 : Prices in network industries

The efficiency of the economic reform process can best be measured by tracking price
levels in network industries such as telecommunications, energy and transport,
because these sectors are currently being liberalised. This indicator will include data
on telecommunications, gas and electricity prices. If suitable data is available, prices
in the transport sector will also be included. Particular attention will be paid to price
levels in telecommunications because in this sector the liberalisation process is
already quite
available. The
telecommunications sector also plays a particularly important role in the economy
because its services are increasingly important inputs into the production processes of
other sectors, especially in the knowledge economy.

advanced and sufficient

therefore

data

are

Indicator 4 : Public procurement

This is an indicator of transparency in public procurement which is a necessary
condition to encourage entry, competition and avoid discrimination and fragmentation
on national grounds in public procurement markets. The focus is on such markets,
because the public sector's purchases of supplies, services and works are important to
the EU economy (estimated at around 14% of GNP). In addition, this is one area
where the Single Market has been particularly slow to develop. This is the reason why

15

the Lisbon Council asked for a speedy update of Community public procurement rules
aimed at making public procurement more accessible to SMEs.

Indicator 5 : Sectoral and ad-hoc State aids

The Lisbon Council conclusions underline the further efforts needed to promote
competition and reduce the general level of State aids, shifting the emphasis from
supporting individual companies or sectors towards tackling horizontal objectives of
Community interest. Sectoral and ad-hoc State aids introduce distortions into the
market place, leading to inefficiencies, and as a consequence a reduction in European
competitiveness and growth. State aid is of particular interest because it is under the
direct control of government.

Indicator 6 : Cross-border banking penetration

At Lisbon, Heads of State and Government recognised the central role of efficient
capital markets for long-term European competitiveness. As stressed in the Financial
Services Action Plan, market integration is key to their efficiency. As banks play a
major role in the financing of the economy, an indicator of their cross-border activity
will be a good indicator of financial market integration.

Indicator 7 : Capital raised on stock markets

As already mentioned, access to finance is a major determinant of sustainable
economic growth. European stock markets are underdeveloped, compared to the US,
due to a set of barriers. These barriers are analysed and addressed in the Financial
Services Action Plan and the Risk Capital Action Plan. Their development and the
effectiveness of the measures undertaken under the above mentioned plans should be
monitored through an analysis of the amount of capital raised on stock markets. When
interpreting this indicator account will need to be taken of the effect of the business
cycle as well as structural factors, together with the fact that the figures can be easily
distorted in small capital markets.

V.4

Indicators of social cohesion

Along with the development of a new knowledge-based society, the Lisbon
35.
European Council accorded a high priority to social cohesion. This priority
acknowledges the fact that the development of the knowledge-based economy carries
with it the potential to enhance social cohesion through the participation of the largest
number of people. On the other hand, it also reflects the concern that this potential
might only be realised if the existing problems of unemployment, exclusion and
poverty are tackled. Efforts in the fields of employment and education, as called for
by Lisbon, are also expected to strengthen social cohesion - it is recognised that the
best safeguard against exclusion is a job.

36.
One of the three pillars of the strategy outlined by the Lisbon European
Council calls for the modernisation of the European social model, for investment in
people, and for the fight against social exclusion. Social protection systems should be
modernised to ensure their long-term financial sustainability in the face of changing
demographic patterns, and to promote social inclusion and tackle poverty. Investing in
people is also seen to be key to efforts in this pillar. Particular stress was laid by the
European Council on the adaptation of education and training systems to the needs of
the knowledge-based society. As part of the efforts to promote and monitor

16

improvements in social cohesion, attention is being devoted to the evaluation of
inequalities in terms of standard of living and quality of life within society across age,
gender and population groups. Instruments are being developed to reduce these
inequalities, and to support the social participation and increased contribution of the
individual.

37.
The key indicators included here are intended firstly to provide measures of
the degree of poverty and income dispersion and the associated risk of social
exclusion. Also included is an indicator for regional cohesion, as regional disparities
are one contributing factor to poor social cohesion. Finally, the inclusion of an
indicator on educational outcomes, highlights the importance paid to investment in
people by the Lisbon Council, and reflects the importance of poor educational
attainment as one contributing factor to social exclusion. It should be noted however,
that work on indicators in the social field is still at an early stage, and more suitable
indicators are likely to emerge in the coming months and years. In particular, the
Lisbon European Council asked the High Level Group on Social Protection to work
on the development of indicators, and this work is not yet complete. Moreover, data
for the social indicators included below do not yet cover all Member States.

Indicator 1 : Distribution of income (income quintile ratio)

The income quintile ratio is one measure of the degree of income inequality in a
country. It compares the share of a country’s income received by the highest-earning
20% of a country’s population with that share earned by the lowest-earning 20%
(S80/S20). Wide disparities in income share between these groups, can reflect poor
levels of social cohesion, and the heightened risk of social exclusion for those at the
lower end of the income distribution.

Indicator 2 : Poverty rate before and after social transfers

The poverty rate measures the share of the population below a defined poverty line,
thus measuring the extent of poverty, the risks of social exclusion, and the impact of
social transfers (excluding pensions).

Indicator 3 : Persistence of poverty

The indicator for the persistence of poverty measures the share of the population
consistently living below the poverty line over the longer term. It gives an indication
of the depth of the poverty problem and of its dynamics; the longer people remain in
poverty the greater the likelihood of their permanent social exclusion.

Indicator 4 : Jobless households

This indicator measures the extent to which whole households might be at risk of
poverty and social exclusion due to the lack of employment. Jobless households are
working age households, that have no person in employment. Here, working age
households are defined as households in which at least one person is aged 25-55. In
the interpretation of such an indicator, its sensitivity to the business cycle should be
taken into account.

Indicator 5 : Regional cohesion (variation in GDP per capita in PPS across
regions)

17

Reducing disparities between regions has since long been an aim of the Community’s
policies. Moreover, wide regional disparities in economic activity can be one of the
factors contributing to the exclusion of certain parts of society within a country.

Indicator 6 : Early school-leavers not in further education or training

This indicator, which measures the share of people aged 18-24 with only lower
secondary education and not in education or training, reflects the importance attached
to investment in people in the strategy proposed by the Lisbon European Council. It
highlights the need for a good level of basic education to enhance the employability of
school-leavers, and to ensure their social inclusion. The European Council has also set
a target of halving, by 2010, the number of 18-24 year olds with only lower secondary
education that are not in further education or training.

VI.

INDICATORS TO BE DEVELOPED

38.
Some of the indicators necessary for monitoring progress in the policy
domains considered may not be available for different reasons. The indicators may not
be defined precisely or may not be harmonised across Member States, or the data
necessary for their quantification may not be complete or may be out-of-date.

39.
In order to cope with this problem, a number of indicators have been selected
for which an additional statistical effort is most urgently needed. They are listed
below. The list aims to identify the most important shortcomings and to avoid placing
too much of a burden on the Member States. Each of these proposed indicators will
have to be assessed in the context of possible future inclusion in the European
In this context, consideration could also be given to the
Statistical System.
development (and continuous updating) of a database on performance and policy
measures since this information constitutes the vital starting point for any analysis.
The database would be intended as a way of drawing together the information to be
used in the Synthesis Report and to help ensure consistency in the on-going process.
The database would not be intended to duplicate existing work or to introduce
inflexibility in the further improvement of the indicators.

VI.1

General economic background indicators

Indicator a : Potential output

Potential output is a composite performance indicator, which provides a summary
indication of the overall health of the supply side of an economy. It can be measured
in a number of different ways. One method would be to use simple detrending
methods to calculate a trend GDP series. Another would be to use a production
function approach to calculate potential output (assuming that at the aggregate level a
technical relationship exists linking output to various factor inputs – multiplied by
their respective degree of utilisation – and the level of total factor productivity).

Indicator b : Total factor productivity

Total factor productivity (TFP) is a comprehensive indicator of market efficiency,
reflecting developments in labour, capital and product markets. Both levels and
growth rates of total factor productivity are worth calculating. Relative TFP levels
measure residual labour productivity levels taking into account the impact of cross

18

country differences in fixed capital. TFP growth rates are indicative of changes in the
quality of labour and capital inputs and technical change arising from process or
product innovations or organisational change. The main problem with the indicator is
that it is difficult to arrive at a commonly agreed methodology for calculating TFP;
only slight differences in methodology may lead to significantly different results.

VI.2

Employment indicators

Indicator 1 : Long-term unemployment flows

Flows into and out of long-term unemployment would provide a useful means of
assessing the nature of the problem facing the long-term unemployed, as well as
progress in implementing more active and preventative policies for the unemployed.
Such data are currently available for a majority of Member States but some problems
of comparability remain.

Indicator 2 : Quality of work

The conclusions of the Lisbon European Council mention the need for “more and
better” jobs. As such, it might be useful to include an indicator on the quality of work
in the set of key indicators. However, quality of work has not yet been clearly defined,
and as a result there is not yet any consensus on useful indicators. Moreover, existing
indicators in this area suffer from patchy data.

Indicator 3 : Vacancies

New and unfilled vacancies would be useful to measure labour market tightness and
to identify skill shortages. At present these data are only available through a number
of different national sources - coverage differs and so comparability is difficult to
assess.

Indicator 4 : Marginal effective tax rate

An indication of marginal effective tax rates (which take into account both taxation
and withdrawal of means-tested benefits as gross income rises) would be useful in
order to assess the combined incentive effects of tax and benefit systems, and in
particular the extent of poverty traps.

VI.3

Innovation and research indicators

Indicator 5 : Public and private expenditure on human resources

Public and private expenditure on human resources as a share of GDP would be useful
to measure total (as opposed to public) resources devoted to education and training in
Member States. This indicator is in line with the priority given to investment in people
in the conclusions of the Lisbon European Council. The problem is that at present the
data on private expenditure on education and training is missing for some Member
States and is not strictly comparable for the remaining Member States.

Indicator 6 : Business demography

High rates of company creation and destruction are indicative of the dynamism of an
economy, allowing a shift from slow- to rapid-growth sectors. Low rates of creation,
on the other hand, may reflect obstacles to entry or a deficient business environment.
The creation rates should be examined in combination with the survival rates and

19

enterprise growth to get a more complete picture of the effects of enterprise creation.
Eurostat has initiated a project aimed at producing data on enterprise creation, their
survival and growth for the year 2002. Other demographic data on business will be
added later on. The introduction of such indicators in the list of key indicators may be
considered from then on.

Indicator 7 : E-commerce

The development of the Internet has led to the creation of a whole new market place
where products are traded from business to consumer (B2C) or from business to
business (B2B). The development of this new market, which affects the whole supply
chain including subcontracting, procurement, product development, marketing,
logistics and distribution, is essential to assure the continued competitiveness and
growth of European industry. An increased involvement
in electronic commerce
creates the potential for a more dynamic and productive European economy. Reliable
and comparable statistical data in this area are thus urgently needed.

VI.4

Indicators of economic reform

Indicator 8 : Company registration

Governmental regulation may at times hinder the operation of business enterprises. In
recent years, governments have made an effort to eliminate regulations that serve no
useful purpose and to simplify procedures. The Lisbon conclusions argue that further
efforts are required to lower the costs of doing business and remove unnecessary red
tape. The total number of procedures required for registering a new company, and the
average period of time needed for going through this process may be good indicators
of progress made in regulatory reform. A study was conducted to calculate such
indicators for 1996. An update of this study would be most welcome.

Indicator 9 : Regulatory environment

The Lisbon Council asked for further coordinated action to simplify the regulatory
environment, including the performance of public administration, at both national and
Community level. There is no easy way of measuring the quality of the regulatory
to collect and analyse
environment. The OECD has made a significant effort
comparative data on regulatory environments in the product market in 1998, focusing
on economic and administrative regulations. The outcome of this analysis was
presented in the form of summary statistics, which gave rise to much discussion.
Nevertheless, it may be useful to further develop the OECD work in this area.

Indicator 10 : Number of operators in network industries

Another way of measuring progress in liberalising the network industries, in addition
to prices, is to look at the number of operators in each network industry. This
indicator could be broken down by the number of operators serving either domestic or
industrial users. We would expect the data to cover at least the telecommunications,
electricity and gas sectors and if possible the transport sector. In this area, further
work is needed on the coverage and comparability of these data.

Indicator 11 : Cost of capital

An indicator of the cost of capital for EU companies, with a comparison between
Member States, as well as between large enterprises and SMEs would be very useful

20

in the framework of enterprise policy, permitting an assessment of financing
conditions and of the investment capacity of enterprises. However, at present no such
indicator is available due to the lack of an agreed definition of such an indicator as
well as a lack of data (especially at SMEs level).

VI.5

Indicators of social cohesion

Social exclusion is a multidimensional phenomenom and indicators must be
developed accordingly. In addition to issues of low income, unemployment and access
to the labour market, it refers to particular difficulties regarding access to resources,
rights, goods and services in a number of areas including education,
training,
employment, housing, health, etc. Eurostat has started work on non-monetary
indicators of deprivation and social exclusion relating to individual means, perception
and satisfaction. Measuring the effectiveness of social protection is another important
aspect
to be developed under social cohesion. There is a need to strengthen
cooperation at Community level to make progress in these respects. These are issues,
where the important contribution of the Committee for Social Protection (currently the
High Level Group on Social Protection) is expected. For this reason, we do not
provide any detailed list of indicators to be developed in this area.

21

ANNEX 1 – SELECTED INDICATORS

General economic background indicators

General economic background indicators to
be developed

a. GDP per capita (in PPS) and real GDP growth rate
b. Energy intensity of the economy
c. Labour productivity (per person employed and per

a. Potential output
b. Total factor productivity

hour worked)
d. Inflation rate
e. Cyclically adjusted budget balance

List of 27 indicators

List of 11 indicators to be developed

I. Employment
1. Employment rate
2. Female employment rate
3. Employment rate of older workers
4. Unemployment rate
5. Long-term unemployment rate
6. Tax rate on low-wage earners
7. Life-long learning (adult participation in education

and training)

I. Employment
1. Long-term unemployment flow
2. Quality of work
3. Vacancies
4. Marginal effective tax rate

II. Innovation and research
1. Public expenditure on education
2. R&D expenditure
3. ICT expenditure
4. Level of Internet access
5. Patents in high-tech areas
6. Exports of high-technology products
7. Venture capital

III. Economic Reform
1. Trade integration
2. Relative price levels and price convergence
3. Prices in network industries
4. Public procurement
5. Sectoral and ad hoc State aids
6. Cross-border banking penetration
7. Capital raised on stock markets

IV. Social Cohesion
1. Distribution of income (income quintile ratio)
2. Poverty rate before and after social transfers
3. Persistence of poverty
4. Jobless households
5. Regional cohesion (variation in GDP per capita in PPS

across regions)

6. Early school-leavers not

in further education or

training

II. Innovation and research
5. Public and private expenditure on human resources
6. Business demography
7. E-commerce

III. Economic Reform
8. Company registration
9. Regulatory environment
10. Number of operators in network industries
11. Cost of capital

IV. Social Cohesion
Indicators will be developed by the High Level Group on
Social Protection

22

ANNEX 2 – Definition, Source, Availability and Policy Objective behind the Selected Indicators

General Economic Background Indicators

Indicator

Definition

Source

Availability

Overall
objective

policy

Eurostat; National Accounts.

Coverage: all MS, US. Japan (for GDP
growth)

Growth performance,
standard of living

Time series: 1991-1999, EU aggregates for
1995-1999

Coverage: all MS, US.

Time series: 1985-98.

Coverage: all MS, US, Japan.

Time series: 1991-1999, EU aggregates for
1995-1999.

Time series: monthly, from 1995 onwards

Coverage: All MS, EU aggregates

Time series: 1960-1998/9.

Sustainable
development.

Overall efficiency of
the economy

Sound
macroeconomic
environment

Assess the soundness
of public finances.

Eurostat; Price statistics.

Coverage: HICP for all MS, EU aggregates.

a. GDP per capita in PPS
and real GDP growth
rate

GDP per capita in Purchasing
Power Standard (PPS)

Growth rate of GDP at constant
prices (base year 1995)

b. Energy intensity of the

economy

(Gross inland consumption of
energy) / GDP

Eurostat.

c. Labour productivity

Per hour worked or per person
employed

Eurostat; National Accounts.
OECD for per hour worked
data.

d. Inflation rate

Annual percentage change in
Harmonized Index of Consumer
Price (HICP)

e. Cyclicallyadjusted
budget balance

The budget balance adjusted for
the impact of the business cycle.

Commission Services. DG
ECFIN Ameco database.

23

(I) EMPLOYMENT

Indicator

Definition

Source

Availability

1. Employment rate

Employed persons aged 15-64 as a
share of the total population aged 15-
64

2. Female employment

rate

Employed females aged 15-64 as a
share of the total female population
aged 15-64

3. Employment rate of

older workers

Employed older (aged 55-64)
workers as a share of total population
aged 55-64

4. Unemployment rate

5. Long-term

unemployment rate

6. Tax rate on low-
wage earners

7. Lifelong learning

(adult participation
in education and
training)

Total unemployed individuals as a
share of the -total active population -
Harmonised series

Total long-term unemployed (over 12
months) as a share of total active
population – Harmonised series.

Income tax plus employee and
employer contributions for low-wage
earners (i.e. with a wage of 67 % of
the average production wage, or
100% for married couples with two
children) as a share of labour costs.

Percentage of population, aged 25-64,
participating in education and
training. (Adult participation in
training over the 4 weeks prior to the
survey).

Eurostat (Labour Force
Survey)

All MS, EU aggregates. Comparable data not
available for the US.

Time series: 1983 – 1999

Eurostat (Labour Force
Survey)

All MS, EU aggregates. Comparable data not
available for the US.

Time series: 1983 – 1999

Eurostat (Labour Force
Survey)

All MS, EU aggregates. Comparable data not
available for the US.

Time series: 1983 – 1999

Eurostat (Unemployment)

All MS, EU aggregates, US and Japan.

Time series: 1983 – 1999

Eurostat (Labour Force
Survey)

All MS, EU aggregates. Comparable data not
available for the US.

Time series: 1983 – 1999

OECD, Taxing Wages
(Table 5, 2000 edition)

All MS, comparable data for US and Japan.

Time series : 1995-98, estimates for 1999.

Overall policy
objective

Full employment

Full employment.
Equal opportunities for
all.

Full employment.
Combating social
exclusion.

Full employment.
Combating social
exclusion.

Full employment.
Combating social
exclusion.

To measure the tax
pressure on labour,
especially the low-paid
and the relatively
unskilled.

Eurostat (Labour Force
Survey)

All MS, EU aggregates. F, NL, P use non-
harmonised methodologies. Comparable data not
available for the US.

Full employment. More
and better jobs.

Time series: 1992 – 1999

24

(II) INNOVATION AND RESEARCH

Indicator

Definition

Source

Availability

Overall policy
objective

1. Public expenditure on

education

Total public expenditure on education
as a percentage of GDP.

Joint Unesco / OECD /
Eurostat questionnaire.

Coverage: all MS, EU aggregates, US and
Japan

Quality
resources

of

human

2. R&D expenditure

Total R&D expenditure, broken down
by government, enterprises and other.
(GERD/GDP and BERD/GDP)

Eurostat R&D statistics,
OECD (main science and
technology indicators).

3. ICT expenditure

ICT expenditure as a percentage of
GDP.

European Information
Technology Observatory
(EITO)

4. Level of internet access

Internet on-line active accounts (both
residential and business users) per
100 inhabitants.

European Information
Technology Observatory
(EITO)

5. Patents in high-tech

areas

World share of European and US
patents in high-tech areas (EPO and
USPTO patents).

European Patent Office
(EPO) and US Patent Office
(USPTO).

Time series: 1995/6/7 (1998 available by
end-2000).

Coverage: all MS (except Luxembourg), US
and Japan.

R&D effort

Time Series: 1990-99 (1998 and 1999 for
most MS)

Coverage: All MS, EU aggregates, US and
Japan.

Information society

Time series: 1994-1999

Coverage: All MS, US and Japan.

Information society

Time Series: 1998

Coverage: All MS, US and Japan.

Innovation capacity

Time Series: 1991 to 1998

6. Exports of high-

technology products

Share of exports of high-tech
products in total exports.

Eurostat (Comext), UN
(Comtrade)

Coverage: all MS (BLEU for B and L), EU
aggregates, US and Japan.

Impact of R&D and
innovation policy.

Time series: 1990-99

7. Venture Capital

Venture capital investments (ie
private equity minus buyouts),
relative to GDP.

Breakdown by investment stages.

European Venture Capital
Association (for EU), Price
waterhouse Coopers (for
US).

Coverage: All MS (no data for
Luxembourg), US, but not Japan.

Time series: 1995-99

Access to finance

25

(III) ECONOMIC REFORM

Indicator

Definition

Source

Availability

Overall policy
objective

1. Trade integration

(Intra-EU exports of goods + intra-EU
imports of goods) / (2 * GDP)

Eurostat (Comext). UN
Comtrade.

Coverage: All MS (BLEU for B and L),
EU aggregates, US and Japan.

Product market
integration

(Total exports of goods + total imports of
goods) / (2 * GDP)

2. Relative price levels

and price convergence.

Relative price levels of private final
consumption including indirect taxes
(EU=100).

Eurostat / OECD (price
statistics: PPP indicators)

Time series: 1990-99

Coverage: all MS, US.

Times series:

MS: 1980, 1985, 1991-98

US: 1993, 1996

Product market
integration. Market
efficiency.

3. Prices in network

industries

Price level and evolution in the
telecommunications, electricity and gas
markets.

Eurostat. DG INFSO for
telecom-munications data.

Coverage: all MS and EU aggregates.
Some US and Japan data for
telecommunications.

Market efficiency.

4. Public procurement

(Value of public procurement which is
openly advertised) / (total value of public
procurement)

DG MARKT

Coverage: all MS. No US or Japan.

Time series: 1998-2000

Time series: 1993-1998 (P, S no data for
1993)

5. Sectoral and ad hoc

State aids

State aids (sectoral and ad hoc) as a
percentage of GDP

DG COMP

Coverage: all MS. No US or Japan data.

Time series: 1990-1998

Product market
integration

Distortions in the
Single Market

6. Cross-border banking

penetration

Share of deposits from, and loans to, non-
resident non-bank private sector (including
households) in total of deposits and loans
overseen by credit institutions to non-bank
private sector (including households).

Eurostat, structural
Business Statistics, ECB,
Money and Banking
Statistics

Coverage: Each MS from euro area, plus
probably other MS.

Financial market
integration

Time series: 1997-99

7. Capital raised on stock

markets

Capital raised on stock markets as a
percentage of GDP.

Fédération Internationale
des Bourses de Valeurs
(FIBV).

Coverage: All MS, US, Japan.

Growth financing

Time series: 1998 and 1999

26

(IV) SOCIAL COHESION

Indicator

Definition

Source

Availability

All MS except Sweden and Finland, EU
aggregates. No data on US and Japan.
Time series: 1993, 1994, 1995, (1996 available
by end 2000 including Sweden)

Overall policy
objective

Combating poverty and
social exclusion

All MS except Sweden and Finland, EU
aggregates. No data on US and Japan.
Time series: 1993, 1994, 1995, (1996 available
by end 2000 including Sweden)

Combating poverty and
social exclusion.

Eurostat, ECHP.

All MS except Austria, Finland and Sweden,
EU aggregates. No data on US and Japan.

Combating poverty and
social exclusion.

Time series : 1993, 1994, 1995 (1996 available
by end 2000 including Sweden).

All MS except Denmark, Finland and Sweden,
EU aggregates. Comparable data not available
for the US

Time series: 1985 – 1999

Combating poverty and
social exclusion.

Only NUTS 2 level for Italy. No data for French
DOM. 1995-1997 in ESA 95 format (and 1991
to 1996 in ESA 79 format).

Cohesion.

All MS, EU aggregates.

Comparable data not available for the US

Time series: 1992 - 1999

Investing in people.
Combating social
exclusion.

1. Distribution of income
(income quintile ratio)

2. Poverty rate before and
after social transfers

3. Persistence of poverty

The ratio of the share of the total
equalised income received by the highest
earning 20% of the country's population
and the lowest earning 20% (S80/S20
ratio).

Share of population below the poverty
line. Poverty line defined as (50% or)
60% of the median-equalised disposable
income.

Share of population consistently below
the poverty line for a three year period.
Poverty line defined as (50% or) 60% of
median-equalised disposable income.

Eurostat, ECHP.

Eurostat, ECHP.

4. Jobless households

Share of households in which no member
is in employment among all households
in which at least one person is aged 25-
55.

Eurostat (Labour
Force Survey).

5. Regional cohesion

Coefficient of variation of GDP per
capita in PPS at the NUTS 3 level for
regions.

6. Early school-leavers not
in further education or
training

Share of people aged 18-24 with only
lower secondary education and not in
education or training

Eurostat, Regional
Statistics.

Eurostat (Labour
Force Survey)

27

(V) INDICATORS TO BE DEVELOPED

General Economic Background

Indicator

Definition

a. Potential Output

Measure of the potential output of the
economy.

Total productivity of all factors.

b. Total factor
productivity

Employment

Indicator

Definition

Current
Source

OECD, IMF and
Commission
services

AMECO
database.

Current
Source

Problem with indicator

Purpose

There is no agreed methodology for
calculating potential output and measures
vary between the OECD, IMF and the
Commission.

Data is available in AMECO but there is
difficulty in arriving at a commonly
agreed methodology.

To assess changes in the output
potential of economies.

To assess overall efficiency of the
economy.

Problem with indicator

Purpose

1. Long-term

unemployment
flows

Flows into and out of long-term
unemployment.

National sources
only.

Data is currently only available for
certain Member States. Moreover, it is
not presented in a comparable fashion.

To assess the nature of the problem
facing the long-term unemployed.

2. Quality of work

To be defined.

-

3. Vacancies

New and unfilled vacancies.

4. Marginal effective

tax rate

Share of any increase in gross wages not
(effectively) received by the worker because
of higher tax payments and withdrawal of
means-tested benefits, by wage level and
family type.

National sources
only

OECD “Taxing
wages”

28

There is little consensus on useful
indicators in this area, and data coverage
is patchy at the moment

Data is only provided by a number of
different national sources; coverage
differs and so comparability is difficult
to assess.

OECD “Taxing wages” gives marginal
tax rates, taking into account cash
benefits such as child allowances.
However, other benefits, such as housing
allowances, in-work income supplements
and so on, would need to be included.

The need for “more and better” jobs.

To measure labour market tightness
and to identify skill shortages.

Assessment of the incentive effects of
tax and benefit systems, and in
particular the extent of the poverty
trap.

(V) INDICATORS TO BE DEVELOPED (CONTINUED)

Innovation

Indicator

Definition

Current
Source

Problem with indicator

Purpose

5. Public and private
expenditure on
human resources

Public and private expenditure on human
resources (education expenditure) as a share
of GDP

-

6. Business

demography

Creations, survival rate and destructions of
enterprises.

7. E-commerce

E-commerce revenue.

Eurostat
(demography of
enterprises
project).

Studies.
Eurostat (pilot
studies with
Member States
in 2001).

Data on private expenditure on education
is missing for some Member States, and
is not strictly comparable for the
remaining Member States.

Data on a harmonised basis available
from 2002 onwards. Only non-
harmonised data is currently available.

To measure total (as opposed to
public) resources devoted to
education in Member States.

To measure entrepreneurship

Only partial data from studies are
available at the moment.

Information society

29

(V) INDICATORS TO BE DEVELOPED (CONTINUED)

Economic reform

Indicator

Definition

8. Company

registration

Total number of procedures and weeks
lapsed between the application for and
completed registration of a new company.

9. Regulatory

environment

-

Current
Source

Logotech study
1996.

OECD analysis
in 1998

10. Number of
operators in
network industries

Number of companies offering services
available to a certain class of users (e.g.
domestic or industrial) in a network
industry.

See next
column.

Problem with indicator

Purpose

Last data was for 1996.

To measure barriers to
entrepreneurship

No easy way of measuring the quality of
the regulatory environment. The OECD
has presented summary statistics, which
although they can be questioned might
be worth developing further.

Full data only available for telecoms at
the moment from 4th and 5th Report on
the Implementation of the Telecom-
munications Regulatory Package.

Simplifying the regulatory burden.

Market efficiency, market access.

11. Cost of capital

Cost of capital for EU companies (both large
enterprises and SMEs).

-

At present no agreed definition and a
lack of data.

To assess EU’s firm’s access to
capital.

30

ANNEX 3:

General Economic Background

Indicator a1: GDP per capita

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

EU-15

US

0

Source: Eurostat

1995

1998

200

50

100
GDP per head in 1995 PPS (EU-15=100)

150

31

1998

1999

General Economic Background

Indicator a2: Real GDP growth rates

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

EU-15

US

Japan

-5

0

5

10

Real GDP growth, percentage change on preceding year

Source: Eurostat

32

General Economic Background

Indicator b: Energy Intensity of the Economy

1990

1998 (for
US: 1997)

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

EU

US

0

100

200

300

400

500

Gross inland consumption of energy / GDP
(tonnes of oil equivalent / 1995 million euro)

Source: Eurostat

33

General Economic Background

Indicator c1: Labour productivity (per employee)

1992
1998

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

EU-15

US

Japan

0

50

100

150

GDP per person employed (EU-15=100)

Source: Eurostat and OECD

34

1992

1998

General Economic Background

Indicator c2: Labour productivity (per hour worked)

B

DK

D

EL

E

F

IRL

I

NL

A

P

FIN

S

UK

US

Japan

0

20

40

60

80

100

120

Level of productivity per hour worked
(US=100)

Source: OECD

35

1998

1999

General Economic Background

Indicator d: Inflation rate

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

EU-15

US

0

1

2

3

4

5

Annual percentage change in Consume r Price Index
(HICP for EU, CPI for US)

Note: US data are not strictly
comparable with EU harmonised indices.

Source: Eurostat

36

General Economic Background

Indicator e: Cyclically-adjusted budget balances

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

EU-15

1998
1999

-4

-2

0

2

4

Cyclically-adjusted budget balance* (as a % of GDP)

Source: Com mission services

*Cyclically-adjusted net lending (+) or net borrowing (-)
general governm ent (as a percentage of GDP).

37

Employment

Indicator I.1: Employment rate

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

1995

1999

EU-15

US

Comparable data not available for the US

0

20

40

60

80

100

as a percentage of population aged 15-64

Source: Eurostat

38

Employment

Indicator I.2: Female employment rate

1995
1999

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

EU-15

US

Comparable data not available for the US

0

20

40

60

80

percentage of female pop. 15-64

Source: Eurostat

39

Employment

Indicator I.3: Employment rate of older workers

1995
1999

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

EU-15

US

Comparable data not available for the US

0

20

40

60

80

percentage of pop. 55-64

Source: Eurostat

40

Employment

Indicator I.4 Unemployment rate

B

DK

D

EL *

E

F

IRL

I

L

NL

A

P

FIN

S

UK

EU-15

US

0

5

10

15

20

25

unemployed as a % of active pop.

* 1999 data not yet available for Greece

Source: Eurostat

41

1995
1999

Employment

Indicator I.5 Long-term unemployment rate

1995

1999

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

EU-15

US

Comparable data not available for the US

0

5

10

15

as a percentage of active population

Source: Eurostat

42

Employment

Indicator I.6 Tax rate on low-wage earners#

1997

1999

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

US

0

10

20

30

40

50

Incom e tax plus employer and employee contributions, as a % of labour costs

# Family type is married couple w ith one earner on 100% APW, w ith tw o children.

Source: OECD

43

Employment

Indicator I.7.: Life-long learning

B

DK

D

EL

E

F $

IRL *

I

L

NL $

A *

P $

FIN

S

UK #

EU-15

US

0

5

10

15

20

25

30

Index of participation of the 25-64 population in education and training.
Adult participation in training over the 4 w eeks prior to the survey.

$ Data for F, NL, P is not comparable due to methodological diff erences.
* 1999 data not available for IRL and A. # The earlier f igure f or UK is 1994.

Source: Eurostat

44

1995

1999

Innovation and research

Indicator II.1: Public expenditure on education

B (fl*)

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

EU-15

US

1995

1997

0

1

2

3

4

5

6

7

8

9

Total public expenditure on education as a percentage of GDP

Source: Eurostat and OECD

*Data covers the Flemish Community only

45

Innovation

Indicator II.2: R&D expenditure
B

DK

D

EL

E

F

IRL

I

NL

A*

P

FIN

S

UK

EU-15

US

Japan

1995

1997

Business
expenditure
on R&D
(BERD)

Non-business
expenditure
on R&D
(GERD -
BERD)

0

1

2

3

4

R&D expenditure as a percentage of GDP

Source: Eurostat, OECD

* No breakdow n of GERD for Austria

46

Innovation and research

Indicator II.3: ICT expenditure

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

EU-15

US

Japan

0

Source: EITO 2000

1996

1999

2

8
Expenditure on Information and Communication
Technology (ICT) as a percentage of GDP

6

4

47

Innovation and research

Indicator II.4: Level of internet access

1998

1999

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

EU-15

US

Japan

0

5

15
Number of internet users per 100 inhabitants (both residential
and business users)

25

20

30

10

Source: EITO 2000

48

Innovation and research

Indicator II.5a: Share of high-tech patents
applied for at the European Patent Office
(EPO), 1998.

Other
6%

Japan
22%

EPC states
36%

USA
36%

Source: EPO

EPC states = EU15 plus Switzerland,
Cyprus, Liechtenstein and Monaco

49

Innovation and research

Indicator II.5b: Share of high-tech patents applied for at the
United States Patent Office (USPTO), 1998.

EPC states
9%

Other
12%

Japan
22%

USA
57%

Source: USPTO

EPC states = EU15 plus Switzerland,
Cyprus, Liechtenstein and Monaco

50

1997
1998

Innovation and research

Indicator II.5c: Patents in high-tech areas

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

EU-15

US

Japan

0

10

20

30

40

50

60

70

Number of high-tech patent applications per million inhabitants

Source: EPO, JPO and USPTO

51

Innovation and research

Indicator II.6: Exports of high-technology products

BLEU

DK

D

EL

E

F

IRL

I

NL

A

P

FIN

S

UK

EU-15

US*

Japan

0

*1998 for the US

*1998 for the US

Source: Eurostat, UN

1995

1999

40

10

20
As a percentage of total exports

30

52

Innovation

Indicator II.7: Venture Capital

1998

1999

early stage

exp & rep*

B

DK

D

EL

E

F

IRL

I

NL

A

P

FI

S

UK

US

0,0

0,1

0,2

0,3

0,4

Venture capital investme nt (by investment stage) as a percentage
of GDP

* exp & rep = expansion and replacement

Source: EVCA (for EU), PricewaterhouseCoopers (for US)

53

Economic reform

Indicator III.1a: Trade integration (Intra-EU trade)

BLEU

DK

EL

IRL

NL

A

P

FIN

S

Small MS

D

E

F

I

UK

Large MS

EU average

Source: Eurostat

0

10

1994
1998

50

60

20

30
Intra-EU trade GDP ratio (% )

40

54

Economic reform

Indicator III.1b: Trade integration (Total trade)

1994

1998

BLEU

DK

EL

IRL

NL

A

P

FIN

S

Small MS

D

E

F

I

UK

Large MS

EU-15

US

0

60
40
20
Total trade to GDP ratio (%)

80

Note: The data includes intra-EU trade for each Member State, but includes
only extra-EU trade for the EU-15.

Source: Eurostat

Note: The data include intra-EU trade for each Member State but only extra-EU trade for the EU-15

55

Economic reform

Indicator III.2a: Relative price levels

(incl. indirect taxes, EU-15=100)

1994
1998

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

US*

0

50

100

150

*US data is for 1993 and 1996

Source: Eurostat

56

Economic Reform

Indicator III.2b: Price level dispersion in the EU-15

n
o

i
t
p
m
u
s
n
o
c

l
a
n

i
f

e
t
a
v
i
r
p

r
o
f

s
l
e
v
e
l

e
c
i
r
p

f
o

n
o

i
t
a
i
r
a
v

f
o

t
n
e
i
c
i
f
f
e
o
C

25

20

15

10

5

0

1990

1991

1992 1993

1994

1995 1996

1997

1998

Source: Eurostat

Data is for EU-12 up to 1992, then EU-15

57

Economic reform

Indicator III.3a: Prices in telecommunications, 1999

Local

National

Call to USA

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

Japan

USA

0

50

100

150

200

250

Price relative to EU-15 = 100

Source: Commission services, DG INFSO

58

Indicator III.3a: Prices in telecommunication, 1997

Call to USA

National

Local

B

DK

D

EL

F

E

IRL

I

L

NL

A

P

FIN

S

UK

Japan

0

50

100

150

200

250

Price relative to EU-15 = 100

Source: Commission services, DG INFSO

59

Economic Reform

Indicator III.3b: Electricity prices (Industry users)

Jan. 98

Jan. 00

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

0

2

4

6

8

10

Electricity prices in euro per kWh (excl. taxes)

Source: Eurostat

Data is for medium consumers: annual
consumption of 2000 MWh.

60

Economic Reform

Indicator III.3b: Electricity prices (households)

Jan. 98
Jan. 00

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

0

5

10

15

20

Electricity prices in euro per 100 kWh (excl. taxes)

Source: Eurostat

Data is for medium consumers:
annual consumption of 3500 kWh

61

Economic Reform

Indicator III.3c: Gas prices (households)

Jan. 98
Jan. 00

B

D

E

F

IRL

I

L

NL

A

FIN*

S

UK*

0

2

4

6

8

10

Gas prices (excl. taxes) in euro per Gigajoule

Source: Eurostat

*FIN and UK data for Jan 98 and Jan 99
Data is for medium consumers
annual consumption 83.7 GJ

62

Economic Reform

Indicator III.3c: Gas prices (industry users)

Jan. 98
Jan. 00

B

DK

D

E

F

IRL

I

L

NL

A

FIN

S

UK

0

2

4

6

Gas prices (excl. taxes) in euro per Gigajoule

Source: Eurostat

Data is for medium consumers: annual consumption 41,600
GJ; load factor: 200 days - 1,600 hours.

63

1996

1998

Economic reform

Indicator III.4: Public Procurement

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

EU-15

0

10

20

30

40

50

Tenders published in the Official Journal
as a percentage of total public procurement

Source: Commission services, DG MARKT

64

Economic reform

Indicator III.5: State Aid

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

EU-15

1994-1996

sectoral
ad-hoc
others

1996-1998

0,0

0,5

1,0

1,5

2,0

2,5

State aid (by category) as a percentage of GDP

Source: Commission Services, DG COMP

65

Economic Reform

Indicator III.6: Cross-border banking penetration

No data available until
autumn 2000

1997

1998

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

EU-15

0,0

0,2

0,4

0,6

0,8

1,0

Banks' cross border assets and liabilities as a percentage of total
assets and liabilities

Source: BIS

66

Economic Reform

Indicator III.7 Capital raised on stock markets

1998

1999

B

D

DK

E

EL

F

IRE

I

NL

A

P

FIN

S

UK

EU-15

NYSE

NASDAQ

Japan

0

5

10

15

20

25

30

Amount of new capital raised by domestic companies as a
percentage of GDP

Source: FIBV

67

Social cohesion

Indicator IV.1: Distribution of income

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

EU-13

1994
1995

0

2

4

6

8

S80/S20 ratio ( ratio of highest-earning 20% to lowest-earning 20%)

* Data for FIN and S not available.

Source: Eurostat

68

Social cohesion

Indicator IV.2: Poverty rate before and after social
transfers, 1995

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN *

S *

UK

EU13

Before

After

0
Share of population below the poverty line. Poverty line defined as 60% of the median
equivalised incom e.

30

20

40

10

Share of population below the poverty line. Poverty line defined as 60%
of the median equivalised incom e.

* Data not available for FIN and S.

Source: Eurostat

69

Social cohesion

Indicator IV.3: Persistence of Poverty (1995)

B

DK

D

EL

E

F

IRL

I

L

NL

A *

P

FIN *

S *

UK

EU-12

0

5

10

15

Share of population consistently below the poverty line for 3 years.
Poverty line defined as 60% of m edian-equivalised incom e.

* Data not available f or Austria, Finland and Sw eden.

Source: Eurostat

70

Social cohesion

Indicator IV.4: Jobless households

B

DK

D

EL

E

FR

IRL

I

L

NL

A

P

FIN

S

UK

EU-15

DATA AVAILABLE BY THE END OF THE YEAR

Share of population consistently below the poverty line for 3 years.
Poverty line defined as 60% of m edian-equivalised incom e.

Share of population below the poverty line.
Poverty line defined as 60% of the median equivalised income.

Share of population below the poverty line.
Poverty line defined as 60% of the m edian equivalised incom e.

* Data not available for Austria, Finland and Sw eden.

* Data not available for FIN and S.

Source: Eurostat

71

Social cohesion

Indicator IV.5: Regional Cohesion

B

DK

D

EL

E

F

IRL

I (NUTS 2)

NL

A

P

FIN

S

UK (1)

UK (2)

0%

10%

20%

30%

40%

50%

Coefficient of variation of GDP/capita in PPS (NUTS 3 level)

UK(1) relates to all of UK, UK (2) excludes the Inner London region.

Source: Eurostat

72

1995

1997

Social cohesion

Indicator IV.6: Early school leavers not in further
education or training

B

DK

D *

EL

E

F

IRL *

I

L *

NL *

A *

P

FIN

S

UK *

EU-15 *

0

10

20

30

40

50

% of 18-24 y-olds with lower secondary education and
not in education or training

* 1998 data not available for IRL, L, NL, UK and EU.
1999 data not available for D, IRL, A, UK and EU.

Source: Eurostat

73

1998
1999

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