Communication from the Commission - Structural indicators
Date: 2002-10-16
Institutions: European Commission
Subjects: economic and social cohesion, economic indicator, economic reform, environmental policy, innovation, labour market, research and development

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 16.10.2002
COM(2002) 551 final

COMMUNICATION FROM THE COMMISSION

Structural indicators

COMMUNICATION FROM THE COMMISSION

Structural indicators

EXECUTIVE SUMMARY

This Communication
presents the
Commission’s proposal
for the list of indicators
to be used in the Spring
Report 2003.

The new list comprises
a high degree of
stability and allows for
some flexibility.

The list remains short
and balanced between
the domains.

The main change is the
inclusion of the
candidate countries.

Much progress has
been made on
developing and
improving indicators.

This  Communication  presents  the  Commission’s  proposal  for
the list of indicators whose main purpose is to support the key
messages of the Spring Report 2003. The Communication also
describes  the  progress  the  Commission  services  have  made
over the last year in developing new indicators, improving the
quality of last year’s list of structural indicators and integrating
the candidate countries into the structural indicators process.

This is the third year in which the Commission has chosen a set
of structural indicators. There have been limited changes to the
list  to  ensure  a  high  degree  of  stability.  This  is  important  for
assessing  progress  in  the  achievement  of  objectives  from  one
year to the next, and it allows the reliability and the quality of
the  indicators  to  continue  to  be  improved.  However  there  has
also  been  some  flexibility  in  the  list  to  incorporate  indicators
reflecting new political priorities or when better indicators have
become available.

The list of indicators has also been kept short with no increase
in the number from the 42 indicators used in last year’s Spring
Report.  A  shorter  list  allows  one  to  better  focus  the  policy
messages drawn from the indicators. The balance between the
domains has been retained with seven indicators for each of the
domains.

In  response  to  the  request  from  the  Gothenburg  European
Council  all  13  candidate  countries  will  be  integrated  into  the
structural indicators this year so that they can be assessed in the
Commission’s Spring Report. The Communication presents the
expected availability  of  data  for the candidate countries at the
time of the next Spring Report.

The  Commission  services  have  made  good  progress  on
developing  new  indicators  and  improving  the  quality  and
presentation of the existing indicators. Progress has been made
in developing indicators in several areas: composite indicators,
potential  output,  marginal  (and  average)  effective  tax  rate,
facilities,  e-commerce,  e-government,  business
childcare 
integration,
demography,  company 
recycling rate of selected materials and hazardous waste. From
this work two new indicators have been added to the list. The
Commission services will continue to develop indicators across
a  wide  range  of  areas  over  the  next  year.  Two  composite
indicators  on 
the  knowledge-based  economy  have  been
developed and  will be used in relevant  policy discussions  and

registration, 

financial 

2

Communications. The Commission continues to  reflect on  the
use  of  composite  indicators  within  the  framework  of  the
structural indicators.

3

I.

1.

2.

3.

II.

4.

(i)

(ii)

(iii)

(iv)

5.

STRUCTURAL INDICATORS

BACKGROUND

The Lisbon European Council conclusions (paragraph 36) asked for an agreed set of
structural indicators to be used to underpin the analysis in the Commission’s annual
Spring Report to the Spring European Council. The role of the structural indicators is
to  allow  for  an  objective  assessment  of  the  progress  made  towards  the  Lisbon
European Council objectives, expanded at Gothenburg and refined at Stockholm and
Barcelona.

In each of the last two years the Commission prepared a list of structural indicators
and agreed  it  with  the  Council.  These  indicators  cover  six  areas:  general  economic
background,  employment,  innovation  and  research,  economic  reform,  social
cohesion and the environment. The indicators proved useful in the Spring Report for
illustrating  areas  where  more  policy  action  was  needed  and  for  measuring  the
progress made towards the Lisbon goals.

This  Communication  presents  the  Commission’s  recommendation  for  the  list  of
structural indicators which are a key element of the Spring Report 2003. The final list
of structural indicators, agreed with the Council, will be adopted at the Copenhagen
European Council in December 2002.

WORK IN PROGRESS

The  Commission  services’  work  on  structural 
Communication has been directed to four areas:

indicators  since 

last  year’s

to  continue  to  improve  the  quality  of  the  indicators  in  the  list  used  for  the  Spring
Report 2002;

to  integrate  the  candidate  countries  into  the  structural  indicators,  following  the
request of the Gothenburg European Council;

to  produce  precise  definitions  and  data  for  the  agreed  list  of  indicators  to  be
developed; and

to assess whether there is a need to modify the list of indicators taking into account
the  progress  made  on  the  indicators  to  be  developed  and  the  policy  priorities
identified at recent European Councils.

Eurostat  has  been  working  with  the  other  Commission  services  and  with  Member
States’ national statistical institutes to improve the quality of the structural indicators.
Over  the  last  year  Eurostat  has  improved  the  country  coverage,  time  series  and
quality  of  the  data  for  many  of  the  existing  structural  indicators.  In  particular,
considerable  progress  has  been  made  with  regard  to  providing  official  data  for
structural  indicators  which  have  previously  been  based  on  unofficial  sources.

4

Moreover,  Eurostat  has  continued  to  improve  its  publicly  accessible  internet  site1
which now contains detailed methodological information as well as  the data  for  all
the  structural  indicators.  Improving  the  quality  of  the  indicators  improves  the
robustness of the policy conclusions drawn in the Spring Report.

6.

This  Communication  represents  the  main  outcome  of  the  Commission’s  work  on
structural indicators over the last year. Section III sets out the main principles for the
new  list  of  indicators.  Section  IV  presents  the  new  list  of  structural  indicators  and
explains  why new indicators have been included in  this  year’s  list  and  why  certain
indicators have had to be dropped. Section V sets out how the candidate countries are
being integrated into the structural indicators this year.  Finally section VI describes
the  progress  made  by  the  Commission  services  in  developing  new  indicators  since
last year, with more details and the new list of indicators to be developed presented
in annex 1.

III.

PRINCIPLES FOR THE NEW LIST OF INDICATORS

7.

8.

9.

This  is  the  third  year  in  which  the  Commission  has  chosen  a  set  of  structural
indicators whose main purpose is to support the key messages of the Spring Report
2003. There is a high degree of stability in the list of indicators in order to allow for
the measurement of progress over time as requested by the Council. This stability is
also appropriate as most structural problems usually show  considerable  persistence.
At  the  same  time  this  allows  for  a  process  of  continuous  improvement  of  the
indicators  in  terms  of  reliability  and  quality.  Changing  the  indicators  from  year  to
year  would  render  this  task  much  more  difficult  for  both  Eurostat  and  national
statistical institutes.

There  has  also  been  flexibility  in  the  list  of  indicators  as  new  priorities  have  been
identified  and  improved  indicators  have  become  available.  However,  this  has  been
balanced  by  the  need  for  a  sufficient  degree  of  stability  to  ensure  that  a  consistent
and  well  founded  assessment  of  the  progress  towards  the  Lisbon  and  subsequent
European Councils’ objectives can be made in each year’s Spring Report.

The list of indicators should be kept short in order to send clear, simple and focussed
policy messages but it should also be balanced to reflect the equal importance that
Lisbon  and  Gothenburg  placed  on  the  domains  of  (1)  employment,  (2)  innovation
and  research,  (3)  economic  reform,  (4) social cohesion and (5)  the environment.  In
addition, some general economic background indicators are included to illustrate the
economic context in which the structural reforms are taking place. To that end, this
Communication  presents  42  indicators,  a  number  which  is  unchanged  from  the
Spring Report 2002. There are 7 indicators in each domain to ensure that each policy
domain can be covered in equal depth.

10.

In principle any new indicators should be taken from the set of indicators which the
Commission  services  have  been  developing  since  last  year’s  Communication,  or
should be justified in the light of a new major objective set by the European Council.
In  addition,  these  new  indicators  should  be  drawn  from  the  different  indicator  and
benchmarking processes going on at the sectoral level where they have already been

1 www.europa.eu.int/comm/eurostat/structuralindicators

5

                                                
11.

12.

IV.

13.

14.

15.

16.

tested. It is important to ensure the consistency between these sectoral processes and
the overarching structural indicators.

Any  new  indicators  should  also  meet  the  criteria  used  for  the  original  choice  of
indicators.  The  indicators  should  be:  (1)  easy  to  read  and  understand;  (2)  policy
relevant;  (3)  mutually  consistent;  (4)  available  in  a  timely  fashion;  (5)  comparable
across  Member  States,  the  candidate  countries  and  as  far  as  possible  with  other
countries; (6) selected from reliable sources;  and  (7) should  not impose too large  a
burden on Member States and respondents.

The main change to the  structural  indicators  this  year  is that  their  coverage will be
expanded to all 13 candidate countries, as requested by  the Gothenburg  European
Council. This will allow the candidate countries to be included step by step into the
Lisbon strategy starting with the Spring Report 2003. Eurostat has been working in
conjunction  with  the  statistical  institutes  in  the  candidate  countries  to  improve  the
availability and quality of  the  structural indicators  for  these  countries.  More  details
are given in section V.

THE NEW LIST OF INDICATORS

The new list of indicators  has  been  drawn  up  in  accordance  with  the  principles  set
out above. In total 3 indicators have been added to the list and 3 indicators dropped
out of the 42 indicators.

The  list  includes  new  indicators  where  there  has  been  sufficient  progress  on
developing the data such as the “effective average exit age”, “company registration”
and “financial integration”. New political priorities are also reflected in the list. For
example “R&D expenditure” is now disaggregated by “R&D financed by industry”
rather  than  by  “Business  R&D  expenditure”  to  reflect  the  objective  set  by  the
Barcelona European Council. The inclusion of the “effective average exit age” also
reflects  the  importance  attached  to  this  issue  at  the  Barcelona  European  Council.
Whenever  new  indicators  have  been  added  to  the  list  they  have  had  to  fulfil  the
quality criteria set out in section III above.

With  the  inclusion of new indicators  it  has  been  necessary  to  drop  some  indicators
from  last  year’s  list.  This  is  an  increasingly  difficult  process  as  more  and  better
indicators  become  available.  New  indicators  were  included  when  they  were  more
politically relevant compared to the previous indicator, when the quality of the data
for the new indicators was better and when the previous indicator duplicated to some
extent another indicator in the list.

The disaggregation by gender is a general principle of the structural indicators. This
disaggregation  has  been  extended  this  year,  where  good  quality  data  are  available
and where a gender disaggregation is meaningful. It is expected that data by gender
will be available for “effective average exit age”, “life-long learning”, “accidents at
work”  (serious,  but  not  fatal  accidents)”,  “risk-of-poverty  rate”,  “persistent-risk-of-
poverty 
“long-term
regional 
unemployment”,  “science  and  technology  graduates”  and  “early  school  leavers”  by
the Spring Report 2003.

“dispersion  of 

employment 

rates”, 

rate”, 

General Economic Background

6

17.

The general economic background indicators illustrate the overall economic context
in which the structural reforms are taking place. No changes have been made to the
indicators in this domain. A new indicator has been developed to measure increases
in potential output, which is the ultimate objective of structural reform. However, it
has been decided not to include potential output growth in the list this year to allow
time to resolve any issues which may arise from the indicator’s use.

Employment

18.

19.

The employment indicators address several of the key aims of the Lisbon European
Council  namely:  to  strengthen  employment  in  the  Union;  the  importance  of  equal
employment  opportunities  for  men  and  women;  and  the  importance  of  an  “Active
Employment policy” such as focussing on life-long learning. It is important to note
that  the  Barcelona  European  Council  refined  the  Lisbon  objectives  concerning
employment and social cohesion.

An  indicator  on  the  average  effective  exit  age  has  been  included  in  the  list  of
structural  indicators  to  monitor  the  Barcelona  European  Council’s  objective  of  a
progressive  increase  of  about  5  years  in  the  effective  average  age  at  which  people
stop  working  in  the  European  Union  by  2010.  This  indicator  replaces  the
employment  rate  of  older  workers  which  will  now  be  included  as  part  of  the
employment rate indicator.

Innovation and Research

20.

The innovation and research indicators measure Lisbon’s emphasis on the transition
to a knowledge-based economy through better policies for R&D, education and the
information society. No changes are being proposed to the indicators in this domain.
However  the  indicator  R&D  expenditure  will  now  be  disaggregated  by  source  of
finance  rather  than  the  sector  carrying  out  the  R&D  expenditure.  This  reflects  the
objective  set  at  the  Barcelona  European  Council  to  raise  overall  spending  in  the
Union  on  R&D  with  the  aim  of  approaching  3%  of  GDP  by  2010  and  increase
efficiency  of  R&D.  Two-thirds  of  this  investment  should  come  from  the  private
sector. The composite indicators developed in this area will be used in the first stage
in the sectoral policy processes.

Economic Reform

21.

22.

The  indicators  on  economic  reform  respond  to  the  Lisbon  European  Council’s
emphasis  on  product  and  capital  market  reform.  They  look  at  market  integration,
progress  in  liberalising  the  network  industries  and  possible  distortions  in  the
functioning of product markets caused by public intervention.

The  indicator  convergence  of  interest  rates  has  been  included  in  the  list  of
structural indicators to  replace  capital  raised  on  stockmarkets.  The  new  indicator
allows  to  better  measure  progress  in  financial  market  integration.  Compared  to
capital  raised  on  stockmarkets,  convergence  of  interest  rates  is  less  narrowly
focussed as it covers several financial markets and it is not distorted by privatisation
programmes or cyclical fluctuations in stock markets. In addition, data are available
with a short time lag and convergence of interest rates is a well established and easy
to interpret indicator.

7

23.

An  indicator  on  company  registration  has  been  added  to  the  list  of  structural
indicators  reflecting  the  Lisbon  European  Council’s  request  that  the  time  and  cost
involved  in  setting  up  a  company  be  monitored.  The  total  number  of  procedures
required  for  registering  a  new  company  and  the  average  period  of  time  needed  for
going through this process are good indicators of progress made in economic reform.
This  indicator  replaces  business  investment  which  is  a  less  precise  measure  of
progress in economic reform.

Social Cohesion

24.

25.

The social cohesion indicators provide measures of the degree and the persistence of
the risk of poverty, income dispersion and the associated risk of social exclusion in
accordance with the Lisbon European Council’s high priority on social cohesion. The
open  method  of  co-ordination  in  the  field  of  social  inclusion  was  endorsed  at  the
Laeken European Council. Seven of the ten primary indicators agreed in Laeken for
this process have been included in the list. Others, such as “life expectancy” at birth
are used in the sectoral processes.

In  the  social  cohesion  domain  some  changes  have  been  made  to  the  definitions  of
inequality  of  income  distribution,  risk-of-poverty  rate,  persistent-risk-of-
poverty  rate,  and  population  living  in  jobless  households.  The  definition  of
regional  cohesion  has  been  changed  from  the  variation  in  regional  unemployment
rates to the variation in regional employment rates and the name has been changed to
dispersion of regional employment rates.

Environment

26.

27.

V.

28.

The environment indicators reflect the Gothenburg European Council’s integration of
sustainable development issues into the Lisbon process. The indicators cover the four
main  areas  identified  by  the  Gothenburg  European  Council:  climate  change,
sustainable transport, threats to public health and managing natural resources.

No  changes  are  proposed  to  the  environment  indicators  this  year.  However  the
indicator  greenhouse  gases  emissions  has  been  modified  by  including  the  policy
targets  set  by  the  Kyoto  protocol  and  the  EU  Burden  Sharing  Agreement.  These
targets  require  certain  Member  States  to  reduce  their  emission  while  others  are
permitted  to  increase  their  emissions  in  comparison  to  1990  levels.  Comparing  the
difference  between  present  emissions  and  the  individual  target  values  for  each
Member State is an effective way of assessing the effects of climate change policies.

INCLUSION OF THE CANDIDATE COUNTRIES IN THE STRUCTURAL INDICATORS

As  requested  by  the  Gothenburg  European  Council  the  13  candidate  countries
(Bulgaria,  Cyprus,  Czech  Republic,  Estonia,  Hungary,  Latvia,  Lithuania,  Malta,
Poland, Romania, Slovenia, Slovakia and Turkey) will be included in the structural
indicators exercise step by step starting this year. Preference will be given to a wide
country-coverage  of  a  sub-set  of  the  structural  indicators  which  will  permit  an
appropriate comparison with and between the candidate countries. Any proposals for
new structural indicators should take into account the need for data on the candidate
countries.

8

29

30.

Eurostat  has  been  working  in  conjunction  with  the  statistical  institutes  in  the
candidate countries to improve the availability and quality of the structural indicators
for these countries. Considerable progress has been made in this work. Eurostat has
based its work on the deadline of the Spring Report and at present most data for the
structural indicators for the candidate countries are still being collected and quality-
assessed. Data for the candidate countries are therefore not included in the statistical
annex of graphs attached to this Communication.

The  expected  availability  of  data  for  the  candidate  countries  is  set  out  in  table  1
below. At this stage it is difficult to provide precise details on which countries  and
which  years  will  be  available  for  the  Spring  Report  2003  because  Eurostat  and  the
candidate countries’ national statistical institutes are working hard to ensure as wide
a coverage as possible, taking into the account the need for good quality data while
respecting  the  foreseen  development  plans  of  the  statistical  system  of  the  country
concerned.  Inclusion  of  the  candidate  countries  in  the  structural  indicators  exercise
should not result in placing a heavy burden on them.

Table 1: Expected data coverage of the candidate countries
for the Spring Report 2003

Indicator

Coverage

General economic background
a. GDP per capita and GDP growth
b.  Labour  productivity  (per  person

only)

c. Employment growth
d. Inflation rate
e. Unit labour cost growth
f. Public balance
g. General government debt
I. Employment
1. Employment rate
2. Effective average exit age
3. Gender pay gap
4. Tax rate on low-wage earners
5. Life-long learning
6. Accidents at work
7. Unemployment rate

II. Innovation and research
1. Spending on human resources
2. R&D expenditure
3. Level of Internet access

(households only)

4. S&T graduates
5. Patents (EPO only)
6. Venture capital
7. ICT expenditure

Yes
Yes

Yes
Yes
Yes
Yes
Yes

Yes
Yes
No
Yes
Yes
Yes
Yes

Yes
Yes
Yes

Yes
Yes
No
Yes

Indicator
III. Economic Reform
1. Relative price levels
2. Prices in the network industries
3.  Market  structure  in  the  network

industries (electricity)

4. Public procurement
5. Sectoral and ad hoc State aid
6. Convergence of interest rates
7. Company registration
IV. Social Cohesion
1. Inequality of income distribution
2. Risk-of-poverty rate
3. Persistent-risk-of-poverty rate
4. 

Dispersion 
employment rates
5. Early school-leavers
6. Long-term unemployment
7.  Population 
in 
households
V. Environment
1.  Greenhouse  gases  emissions
including targets (CO2 only)
2. Energy intensity of the economy
3.  Volume  of  transport  (freight

regional

jobless

living 

of 

only)

4.  Modal  split  of  transport  (freight

only)

5. Urban air quality
6. Municipal waste
7. Share of renewables

Coverage

Yes
No
*

No
*
Yes
No

Yes
Yes
No
Yes

Yes
Yes
Yes

Yes

Yes
Yes

Yes

No
Yes
Yes

Key:

Yes
No

= Data available for all or a high proportion of candidate countries.
= Data available for none or very few candidate countries

9

31.

32.

VI.

33.

34.

35.

*

=

Pending.  Decision  to  be  taken  during  the  autumn  on  basis  of  data
coverage and quality.

The  table  shows  that,  in  general,  some  information  on  most  of  the  indicators  is
expected to be available in time for the Spring Report 2003 at least for a majority of
candidate  countries,  although  data  coverage  is  poorest  for  the  economic  reform
domain. In some cases, when data are available they will need to be interpreted with
care  given  the  recent  collection  of  the  data  and  the  specific  characteristics  of  the
candidate  countries.  For  some  of  the  structural  indicators  covering  the  candidate
countries  more  fully  is  likely  to  be  a  lengthy  process  but  one  which  has  a  high
priority.

It should also be noted that the EEA / EFTA countries (Iceland, Liechtenstein and
Norway) will be included in the statistical annex of  the Spring Report 2003, where
data are available.

INDICATORS UNDER DEVELOPMENT

Twenty-one  indicators  to  be  developed  were  presented  in  last  year’s  Commission
Communication  on  structural  indicators.  Since  the  last  Communication  was
published in October 2001 the Commission services have made a lot of progress in
developing  indicators.  In  particular  progress  has  been  made  with  regard  to  the
following  indicators:  potential  output,  marginal  (and  average)  effective  tax  rate,
childcare  facilities,  e-commerce,  e-government,  business  demography,  company
registration,  financial 
toxic  chemicals,  resource
productivity, recycling rate of selected materials and hazardous waste. A summary of
the progress made in each of the areas is provided in annex 1.

integration,  consumption  of 

in  areas  such  as 

The Commission services have made considerable progress in developing composite
the  knowledge-based  economy,
indicators,  particularly 
entrepreneurship  and  the  Internal  Market.  Composite  indicators  are  calculated  by
weighting together a set of well chosen sub-indicators to provide a summary of each
Member  State’s  progress  in  a  particular  policy  area.  Composite  indicators  would
have  the  advantage  of  providing  a  broader  coverage  of  information  than  can  be
included  in  the  current  list  of  structural  indicators  and  they  would  also  allow  for  a
reduction  in  the  number  of  indicators  presented  in  the  list.  However,  because
composite indicators invite strong policy messages to be concluded they need to be
robust and based on a sound methodology.

The Commission has therefore worked on the basis that composite indicators should
be assessed  on  a  case  by  case  basis  and  should  meet  the  following  quality  criteria.
The  composite  indicators  should:  add  value  compared  to  the  use  of  simpler
indicators; include only sub-indicators which  are  relevant to  the  phenomenon  to  be
measured;  be  based  on  high  quality  data  for  all  the  sub-indicators;  the  inter-
correlation  between  the  sub-indicators  should  be  investigated;  the  method  for
weighting  the  sub-indicators  should  be  transparent,  simple  and  statistically  sound;
and the composite indicators should be tested for robustness and sensitivity.

36.

Over the last year two composite indicators on “investment in the knowledge-based
economy”  and  “performance  in  the  transition  towards  the  knowledge-based
economy” have been developed. These  composite indicators have been  assessed  by

10

external experts and have undergone a detailed review and sensitivity analysis2. The
Commission  now  proposes  to  use  these  composite  indicators  in  the  relevant  policy
discussions  and  Communications.  This  will  also  be  the  case  for  other  composite
indicators being developed by the Commission services. For example, an indicator to
measure  the  e-business  readiness  of  European  enterprises  is  under  development
while composite indicators are already used to measure progress made in the area of
the Internal Market and innovation. In order to improve the quality of the synthesis
brought  forward,  the  Commission  could  consider  the  inclusion  of  composite
indicators  within  the  framework  of  the  structural  indicators  on  the  basis  of  the
assessment of their use in the sectoral processes.

2  State-of-the-art  Report  on  Current  Methodologies  and  Practices  for  Composite  Indicator  Development,  Joint
Research  Centre  –  Applied  Statistics  Group,  Ispra,  June  2002  (www.jrc.cec.eu.int/uasa/prj-comp-
ind.asp)

11

                                                
Table 2: The 42 structural indicators proposed for the Spring Report 2003

General economic background
a. GDP per capita (in PPS) and real GDP growth rate
b. Labour productivity
c. Employment growth*
d. Inflation rate
e. Unit labour cost growth
f. Public balance
g. General government debt
I. Employment
1. Employment rate*
2. Effective average exit age*
3. Gender pay gap
4. Tax rate on low-wage earners
5. Life-long learning
6. Accidents at work*
7. Unemployment rate*
II. Innovation and research
1. Spending on human resources (public expenditure on education)
2. R&D expenditure (by source of finance)
3. Level of Internet access
4. Science and technology graduates*
5. Patents
6. Venture capital
7. ICT expenditure
III. Economic Reform
1. Relative price levels and price convergence
2. Prices in the network industries
3. Market structure in the network industries
4. Public procurement
5. Sectoral and ad hoc State aid
6. Convergence of interest rates
7. Company registration
IV. Social Cohesion
1. Inequality of income distribution
2. Risk-of-poverty rate*
3. Persistent-risk-of-poverty rate*
4. Dispersion of regional employment rates*
5. Early school-leavers not in further education or training*
6. Long term unemployment*
7. Population living in jobless households
V. Environment
1. Greenhouse gases emissions (including targets)
2. Energy intensity of the economy
3. Volume of transport (tonne- and passenger-km) relative to GDP
4. Modal split of transport
5. Urban air quality
6. Municipal waste
7. Share of renewables

Changes are marked in bold. * Denotes indicators which are disaggregated by gender.

12

Table 3: Changes to the list of structural indicators*

General Economic Background

No change.

I. Employment

“Effective average exit age” has replaced “employment rate of older workers”.
The latter is now included as a part of the “employment rate” indicator.

II. Innovation and Research

“R&D  expenditure”  is  now  disaggregated  by  source  of  finance  rather  than  by
the sector carrying out the R&D.

III. Economic Reform

“Convergence of interest rates” has replaced “Capital raised on stockmarkets”.

“Company registration” has replaced “Business investment”.

IV. Social Cohesion

“Regional  cohesion”  is  now  defined  as  the  variation  in  regional  employment
rates,  rather  than  unemployment  rates  and  has  been  renamed  “Dispersion  of
regional employment rates”.

Changes  have  been  made  to  the  definitions  of  “inequality  of  income
distribution” and “population living in jobless households”

V. Environment

“Greenhouse gases emissions” now includes the agreed policy targets.

* In comparison with the list adopted by the Laeken European Council

13

ANNEX 1 – INDICATORS UNDER DEVELOPMENT

1.

Since  last  year’s  Communication  on  structural  indicators  was  published  in  October
2001  the  Commission  services  have  made  considerable  progress  in  developing
indicators. This annex describes where progress has been made. It also presents the
new list of indicators to be developed.

Composite indicators

2.

3.

4.

indicators:  “investment 

The  Commission  services  have  made  considerable  progress  in  the  development  of
composite  indicators  since  last  year,  as  explained  above3.  In  particular,  two
composite 
the  knowledge-based  economy”  and
“performance  in  the  transition  towards  the  knowledge-based  economy”  have  been
developed.  The  Commission  now  proposes  to  use  these  composite  indicators  in
relevant policy discussions and Communications. This will allow further progress in
capturing the various dimensions of the knowledge-based economy.

in 

The composite indicator “investment in the knowledge-based economy” captures the
two  main  aspects  of  knowledge  investment:  creation  and  diffusion.  The  composite
indicator  is  constructed  from  sub-indicators  on  R&D  expenditure,  science  and
technology  doctorates,  researchers,  gross  fixed  capital  formation,  e-government,
education spending and life-long learning.

The  composite  indicator  “performance  in  the  transition  to  the  knowledge-based
economy”  captures  four  important  elements  of  performance:  labour  productivity,
scientific  and  technological  performance,  use  of  the  information  infrastructure  and
the  effectiveness  of  the  education  system.  The  composite  indicator  is  constructed
from  sub-indicators  on  labour  productivity,  patents,  publications,  e-commerce  and
the schooling success rate.

General Economic Background

5.

The  Commission  services  in  co-operation  with  the  Council  have  now  produced  an
indicator of potential output using a production function approach. As stated above
it has been decided not to include this indicator in the list this year to allow time to
resolve any issues which may arise from the indicator’s use.

Employment

6.

7.

8.

The Commission services are analysing the main factors contributing to the gender
pay gap with a view to obtaining further information for analysing pay differentials
between men and women. A Commission policy paper is under preparation.

Development  of  indicators  on  the  marginal  effective  tax  rate  and  the  average
effective tax rate has continued with the OECD. These indicators provide a measure
of poverty and unemployment traps respectively. However, the data are not expected
to be delivered in time for the Spring Report 2003.

The  Barcelona  European  Council  established  targets  for  childcare  facilities.  Some
data are now available from Member States’ National Action Plans on employment.

3 These composite indicators will be assessed through their use in the sectoral processes.

14

                                                
At present data are available from 11 Member States but not in full compliance with
the  agreed  definition.  The  Commission  services  are  working  with  Eurostat  and  the
Member States to improve the coverage of  the  data.  Given  the  political importance
attached to this indicator Member States should redouble their efforts to provide data
on childcare facilities.

Innovation and Research

9.

10.

Eurostat carried out a pilot survey for e-commerce in 2001 and 2002. At present the
survey  does  not  cover  all  15  Member  States.  In  the  meantime,  the  Commission
services  have  collected  data  via  a  Eurobarometer  survey  on  the  percentage  of
companies  selling  on-line  and  the  percentage  of  companies  buying  on-line.  Data
from  the  2001  survey  are  already  available  and  data  from  the  2002  survey  are
expected  in  November  2002.  From  2003  onwards  data  on  e-commerce  will  be
provided  from  the  Eurostat  survey.  As  the  Eurostat  data  do  not  yet  cover  all  the
Member States this indicator remains under development.

The  indicator  e-government  is  defined  as  the  average  percentage  use  of  20  basic
public services available online. The first results for this indicator became available
in 2001 and they have been used successfully in the e-Europe benchmarking process.
Whilst  the  data  are  available  the  Commission  has  decided  not  to  include  e-
government in the structural indicators due to the constraint of keeping the list short.
E-government  is  retained  in  the  list  of  indicators  to  be  developed  as  it  may  be
considered for future inclusion in the list of structural indicators.

Economic Reform

11.

12.

13.

Progress  has  continued  in  collecting  data  on  business  demography.  Harmonised
data on “enterprise births”, “survival rates of newly-born enterprises” and “enterprise
deaths” covering most Member States should be available by late 2002, with the aim
of covering all Member States by 2003.

Indicators  on  company  registration  have  now  been  published  as  part  of  the  Best
procedure  under  the  Multi-annual  Programme  for  Enterprise  and  Entrepreneurship.
Data  on  “the  time  required  to  register  a  private  limited  company”  and  “the  cost  of
registering a private limited company” have therefore been included in the structural
indicators (as explained above).

The Commission services have developed three indicators on financial integration
following a  request from the Ecofin Council in  July  2000.  One  of  these  indicators,
convergence  of  interest  rates,  has  therefore  been  included  in  the  list  of  structural
indicators (as explained above). Work is continuing on other indicators of financial
integration such as the degree of bias towards domestic assets in banks’ or pension
funds’ portfolio allocations.

Social Cohesion

14.

The  Employment  and  Social  Affairs  Council  adopted  the  Social  Protection
Committee’s “Report on Indicators in the field of poverty and social exclusion” on 3
December  2001.  Following  from  this  work,  indicators  are  being  developed  on,  for
instance,  health  and  socio-economic  status,  housing  and  living  conditions.  For  the
Spring Report 2003 data for most of the social cohesion indicators are expected to be

15

available  from  the  European  Community  Household  Panel.  In  the  future,  such
indicators  will  be  based  on  the  new  “Statistics  on  Income  and  Living  Conditions”
(EU-SILC)  which  is  expected  to  provide  data  with  a  shorter  (two  year)  lag.  In
addition,  Eurostat  will  reflect  on  the  development  of  regional  GDP  per  capita  data
based on regional price level data.

Environment

15.

16.

17

18.

Six  indicators  to  be  developed  on  the  environment  were  included  in  last  year’s
Communication.  More  detailed 
indicators,  and  other
environment  indicators  under  development,  are  included  in  Eurostat’s  forthcoming
report to the Environment Council.

information  on 

these 

As  regards  consumption  of  toxic  chemicals  considerable  methodological  and
development work is still required. Eurostat has launched a project to develop a set
of indicators that takes account of the most common toxicological effects on human
and the effects on the ecosystem.

Data  on  resource  productivity  for  electricity  generation  are  already  available,  but
data for apparent consumption of mineral ores still need improvement to fill gaps and
to improve the quality and the timeliness of the data.

As  regards  both  the  recycling  rate  of  selected  materials  and  generation  of
hazardous  waste  the  forthcoming  European  Regulation  on  Waste  Statistics  is
expected  to  provide  harmonised  statistics  with  improved  country  coverage,
timeliness and quality.

New list of indicators to be developed

19.

20.

21.

The  new  list  of  indicators  to  be  developed  includes  indicators  retained  from  last
year’s list which have not yet been fully developed or which would still benefit from
use in sectoral policy processes. This is the case for composite indicators, potential
output, marginal (and average) effective tax rate, childcare facilities, e-commerce, e-
government,  business  demography,  recycling  rate  of  selected  materials  and
hazardous  waste.  Other  indicators  have  been  retained  because  little  progress  was
made, due to the fact that the Commission services had to  restrict their  attention to
developing  a  manageable  number  of  indicators.  In  the  same  context,  further
reflection should be given to the relationship between the indicator to be developed
“healthy life years” and the indicator “life expectancy at birth”.

GDP  per  capita  at  regional  level  has  been  added  to  the  list  of  indicators  to  be
developed.  This  indicator,  which  plays  a  central  role  in  the  definition  of  economic
and social cohesion policy, had been proposed by the Commission in previous years
for the list of structural indicators but it had not been retained by the Council. As a
result, the Commission  services will continue  their  efforts  to  develop  this  indicator
and in particular to express this indicator using purchasing power parities measured
at regional level.

No  other  new  indicators  have  been  added  this  year  to  the  list  of  indicators  to  be
developed.  Developing  indicators  is  a  long  process  and  therefore  the  Commission
has  decided  to  focus  its  attention  on  those  indicators  already  earmarked  for

16

development. The only other change from last year’s list is that company registration
has been removed because it is now included in the structural indicators.

17

Table 4: List of indicators to be developed

Composite indicators

General economic background
1. Potential output
2. Total factor productivity

I. Employment
3. Vacancies
4. Quality of work
5. Marginal (and average) effective tax rate
6. Childcare facilities

II. Innovation and research
7. Composite indicators on the knowledge-based economy
8. Public and private expenditure on human capital
9. E-commerce
10. E-government
11. ICT investment

III. Economic Reform
12. Business demography
13. Cost of capital
14. Financial integration

IV. Social Cohesion
15. Regional GDP per capita in PPS
Indicators will continue to be developed by the Social Protection Committee
and the Commission services.

V. Environment
16. Consumption of toxic chemicals
17. Healthy life years
18. Biodiversity
19. Resource productivity
20. Recycling rate of selected materials
21. Generation of hazardous waste

Indicators where progress has already been made are marked in italics.

18

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

GENERAL ECONOMIC BACKGROUND INDICATORS

Indicator

Definition

Source

Availability*

Overall policy
objective

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

b. Labour productivity

c. Employment growth

d. Inflation rate

e. Unit labour cost growth

f. Public balance

g. General government

debt

GDP per capita in Purchasing
Power Standards (PPS)

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

GDP per person employed

GDP per hour worked relative to
the EU15 (EU15=100)

Annual percentage change in total
employed population. (Total and
by gender).

Harmonised indices of consumer
prices (HICPs). Annual average
rate of change.

Growth rate of the ratio:
compensation per employee in
current prices divided by GDP in
current prices per total
employment.

Net borrowing / lending of
consolidated general government
sector as a percentage of GDP.

General government consolidated
gross debt, as a percentage of
GDP.

Eurostat; National Accounts.

Coverage: all MS, US and Japan

Time series: 1991-2001.

Growth performance,
standard of living.

Eurostat; National Accounts and
OECD.

Coverage: all MS, US and Japan.

Time series: 1991-2001.

Eurostat; National Accounts and
OECD.

Coverage: all MS, US and Japan.

Time series: 1991-2001.

Eurostat; Price statistics.

Coverage: HICP for all MS. US and Japan
data are not strictly comparable.

Time series: 1991-2001.

Eurostat; National Accounts.

Coverage: all MS, US and Japan.

Time series: 1991-2001.

Eurostat, OECD.

Eurostat, OECD.

Coverage: all MS, US and Japan.

Time series: 1991-2001.

Coverage: all MS, US and Japan.

Time series: 1991-2001.

Overall efficiency of
the economy.

Progress towards full
employment.

Sound
macroeconomic
environment.

Sound
macroeconomic
environment.

Sound
macroeconomic
environment.

Sound
macroeconomic
environment.

* ”Time series” describes those years for which data are available in most of the Member States.

19

(I) EMPLOYMENT

Indicator

Definition

Source

Availability

Overall policy
objective

1. Employment rate

Employed persons aged 15-64 as a share
of the total population aged 15-64. Also
employed persons aged 55-64 as a share of
total population aged 55-64. (Total and by
gender for both age groups.)

Eurostat; Labour Force
Survey.

Coverage: All MS. Comparable data not available
for the US and Japan.

Full employment.

Time series: 1991 – 2001.

2. Effective average

exit age

 Average exit age, weighted by the
probability of withdrawal from the labour
market. (Total and by gender).

Eurostat; Labour Force
Survey.

Coverage: All MS. Comparable data not available
for the US and Japan.

Time series: 2001.

3. Gender pay gap

Average gross hourly earnings of females
as a percentage of average gross hourly
earnings of males.

Eurostat; European
Community Household
Panel (ECHP).

Coverage: All MS except L, FIN and UK. No
data for US or Japan.

Time series: 1995 – 1998.

4. Tax rate on low-
wage earners

5. Lifelong learning

6. Accidents at work
(Quality of work)

Income tax plus employee and employer
contributions less cash benefits as a
percentage of labour costs for a low-wage
earner (single person without children with
a wage of 67% of the average production
worker’s wage).

Percentage of population aged 25-64,
participating in education and training in
the 4 weeks prior to the survey. (Total and
by gender.)

Index of the number of accidents at work
(serious and fatal) per 100 thousand
persons in employment (1998=100).
(Total, and by gender for serious accidents
but not fatal accidents)

OECD; Fiscal Affairs
Statistics (for the APW
work)

Coverage: All MS, US and Japan.

Time series: 1996-2000, estimates for 2001.

Eurostat; Labour Force
Survey.

Coverage: All MS. Comparable data not available
for the US and Japan. F uses non-harmonised
methodology.

Full employment. More
and better jobs.

Time series: 1992 – 2001.

Eurostat; European
Statistics on Accidents
at Work (ESAW).

Coverage: All MS, US but not Japan.

Time series: 1994-2000.

Full employment.
Combating social
exclusion.

Combating gender
discrimination.

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

Quality of work.

Full employment.
Combating social
exclusion.

7. Unemployment

rate

Total unemployed individuals as a share of
the total active population. Harmonised
series. (Total and by gender.)

Eurostat;
Unemployment
Statistics.

Coverage: All MS, US and Japan.

Time series: 1991 – 2001.

20

(II) INNOVATION AND RESEARCH

Indicator

Definition

Source

Availability

1. Spending on human
resources (Public
expenditure on
education)

Total public expenditure on education
as a percentage of GDP.

Joint Unesco / OECD /
Eurostat questionnaire.

2. R&D expenditure (by
source of finance)

Total R&D expenditure, broken down
by source of finance (industry, public
or abroad).

Eurostat, OECD.

Coverage: all MS, US and Japan.

Time series: 1995-99 (2000 and 2001 data
available for some Member States, time
series start in 1992 for several MS).

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

Time Series: 1991-99 (2000 for some MS).

3. Level of Internet access

4. Science and technology

graduates

Percentage  of  households  who  have
Internet access at home.

Percentage of enterprises who have
access to the Internet (web).

Tertiary graduates in science and
technology per 1000 of population
aged 20-29 years. (Total and by
gender.)

Joint Unesco / OECD /
Eurostat questionnaire.

Eurobarometer Survey and
Eurostat (households)

Eurostat (enterprises)

Coverage: All MS, US and Japan. No US
data for enterprises.

Time Series: 1998-2002 for households.
2000-01 for enterprises.

Coverage: All MS (except EL), US and
Japan.

Time Series: 1993-2000.

Coverage: All MS, US and Japan.

Time Series: 1991-99 (provisional data for
2000).

Coverage: All MS (except Luxembourg),
US but not Japan.

Time series: 1991-2001

Number of European and US patents
per million inhabitants (EPO and
USPTO patents).

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

Venture capital investments relative
to GDP. Breakdown by investment
stages (early stage and expansion).

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

5. Patents

6. Venture Capital

7. ICT expenditure

ICT expenditure as a percentage of
GDP. Disaggregated into IT and
telecommunications expenditure.

European Information
Technology Observatory
(EITO)

Coverage: All MS, US and Japan.

Time Series: 1991-2000.

21

Overall policy
objective

Quality of human
resources.

R&D effort.

Information society.

Quality of human
resources.

Innovation capacity.

Access to finance, in
particular for start-ups.

Diffusion of ICT.

(III) ECONOMIC REFORM

Indicator

Definition

Source

Availability

1. Relative price levels

and price convergence.

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

Eurostat / OECD (price
statistics: PPP indicators)

2. Prices in the network

industries

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

Eurostat; Energy statistics.
DG INFSO for
telecommunications data.

3. Market structure in the
network industries

Market share of the incumbent in the fixed
and mobile telecommunications markets.
Market share of the largest generator in the
electricity market.

DG INFSO for
telecommunications data.
Eurostat for electricity
data.

4. Public procurement

Value of public procurement which is
openly advertised as a percentage of GDP.

DG MARKT; Eurostat

5. Sectoral and ad hoc

State aid

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

DG COMP

Coverage: all MS, US and Japan.

Times series: 1991-99 for MS. Estimates
for 2000. 1993 and 1996 for US and
Japan plus estimates for other years.

Coverage: all MS. US and Japan data for
telecommunications.

Time series: 1992-2002 for electricity
and gas. 1997-2001 for
telecommunications.

Coverage: all MS, except Lux for
electricity. No US or Japan data.

Time series: 1999-2000 for fixed
telecoms. 2001 for mobile telecoms.
1999 -2000 for electricity.

Overall policy
objective

Product market
integration. Market
efficiency.

Market efficiency

Market efficiency

Coverage: all MS. No US or Japan data.

Time series: 1993-2000

Coverage: all MS. No US or Japan data.

Time series: 3-year averages from 1990-
92 to 1998-2000.

Product market
integration

Distortions in the
Single Market

6. Convergence of interest

rates

7. Company registration

Convergence of annual percentage interest
rates. Calculated for interest rates charged
on mortgages, short-term corporate debt
and medium- to long-term corporate debt.

The average time and financial cost for
complying with the mandatory procedures
required for company registration.

DG MARKT based on
European Central Bank
data.

Coverage: all MS for mortgage rates.
12/13 MS for corporate loan rates.

Time series: 1995-2002.

Study conducted for DG
ENTR.

Coverage: all MS. No US or Japan data.

Time series: 2001.

Financial market
integration.

Promoting
entreprenuership.

22

(IV) SOCIAL COHESION

Indicator

Definition

Source

Availability

Overall policy
objective

1. Inequality of income

distribution

2. Risk-of-poverty rate

3. Persistent-risk-of-

poverty rate

Ratio of total income received by the 20% of
the country’s population with the highest
income (top quintile) to that received by the
20% of the country’s population with the
lowest income (lowest quintile). Income
should be understood as equivalised
disposable income.

Share of persons with an equivalised
disposable income below the risk-of-poverty
threshold before and after social transfers.
The threshold is set at 60% of the national
median equivalised disposable income (after
social transfers). (Total and by gender.)

Share  of  persons  with  an  equivalised
disposable income below the risk-of-poverty
threshold  in  the  current  year  and  in  at  least
two  of  the  preceding  three  years.  The
threshold  is  set  at  60%  of  the  national
median equivalised disposable income (after
social transfers). (Total and by gender.)

Eurostat; European
Community
Household Panel
(ECHP).

Coverage: All MS except L, FIN and UK. No
data on US or Japan.

Time series: 1995-98.

Combating poverty and
social exclusion

Eurostat; European
Community
Household Panel
(ECHP).

Coverage: All MS except L, FIN and UK. No
data on US or Japan.

Time series: 1995-98.

Combating poverty and
social exclusion.

Eurostat; European
Community
Household Panel
(ECHP).

Coverage: All MS except L, FIN,S and UK.
No data for US or Japan.

Time series: 1997-98

Combating poverty and
social exclusion.

4. Dispersion of regional
employment rates

Coefficient of variation of employment rates
across regions (NUTS 2 level) within
countries. (Total and by gender).

Eurostat; Regional
Statistics.

5. Early school-leavers

not in further
education or training

Share of the population aged 18-24 with
only lower secondary education and not in
education or training. (Total and by gender.)

Eurostat; Labour
Force Survey.

Coverage: All MS except DK, IRL and L. No
data for French DOM. No US or Japan data.

Cohesion.

Time series: 1991-2000.

Coverage: All MS except UK. Comparable
data not available for the US and Japan.

Time series: 1992-2001.

6. Long-term

unemployment rate

Total long-term unemployed (over 12
months) as a percentage of total active
population – harmonised series. (Total and
by gender.)

Eurostat; based on
Labour Force Survey.

Coverage: All MS except EL. Comparable
data not available for the US and Japan.

Time series: 1991-2001.

23

Investing in people.
Combating social
exclusion.

Full employment.
Combating social
exclusion.

7. Population living in
jobless households

Persons aged 0-65 (and additionally 0-60)
living in households with no member in
employment as a percentage of all persons
living in eligible households. Eligible
households are all except those where
everyone falls into any one of these
categories: (1) aged less than 18; (2) aged
18-24 in education and inactive; (3) aged 65
(60) and over and not working. (Total and
by gender.)

Eurostat; Labour
Force Survey.

Coverage: All MS except DK, FIN and S.
Comparable data not available for the US and
Japan.

Time series: 1991-2001.

Combating poverty and
social exclusion.

24

(V) ENVIRONMENT

Indicator

Definition

Source

Availability

1. Greenhouse gases

emissions (including
targets)

Progress in emissions control relative to
targets. Aggregated emissions of 6 main
greenhouse gases (CO2, CH4, N2O,
HFCs, PFCs and SF6) expressed in CO2-
equivalents.

European
Environment Agency

Coverage: all MS, US and Japan.

Time series: 1991-99

2. Energy intensity of the

economy

Gross inland consumption of energy
divided by GDP

Eurostat; Energy
Statistics.

3. Volume of transport

relative to GDP (tonne-
and passenger-km)

Index of (freight and passenger) transport
volume relative to GDP . Measured in
tonne-km / GDP and passenger-km /
GDP and indexed on 1995.

Eurostat / DG TREN
/ US Bureau of
Transportation
Statistics.

Coverage: all MS, US and Japan.

Time series: 1991-99.

Coverage: all MS, US and Japan.

Time series: Freight 1991-96; Passenger 1991-
99

4. Modal split of transport

5. Urban air quality

Modal split of freight transport
(percentage share of road in total inland
freight transport) and passenger transport
(percentage share of car transport in total
inland passenger transport).

Indicators based on the concentrations of
ozone and particulates in urban areas
(number of days of pollution exceeding
standards for each of the two selected air
pollutants).

6. Municipal waste

Municipal waste (collected, landfilled
and incinerated). Measured in kg per
person per year

Eurostat;
Environment
Statistics.

Eurostat / DG TREN
/ US Bureau of
Transportation
Statistics.

Coverage: all MS, US and Japan.

Time series: Freight 1991-96; Passenger 1991-
99

European Topic
Centre / Air Quality

Coverage: all MS, except Lux and S for ozone;
except DK, EL, F, Lux, A and S for particulates.
No data for US or Japan.

Time series: 1991-99 (gaps are present)

Coverage: all MS except A for collected; except
EL and IRL for incinerated. No data for US or
Japan. Data for all MS expected by end of 2001.

Time series: 1991-99 (gaps are present)

7. Share of renewables

Contribution of electricity from
renewables to total electricity
consumption

Eurostat; Energy
Statistics.

Coverage: all MS. No data for US or Japan.

Time series: 1991-99.

25

Overall policy
objective

Limit the climate
change and implement
the Kyoto Protocol.

Use energy more
efficiently.

Decouple transport
growth from economic
growth.

Progress towards more
environmentally-
friendly transport
modes.

Improve urban air
quality.

Decrease waste
generation and harmful
disposal.

Sustainable production
of energy.

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