Communication from the Commission - Structural indicators
Date: 2003-10-08
Institutions: European Commission
Subjects: EU statistics, data processing, economic indicator, statistical method

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 8.10.2003
COM(2003) 585 final

COMMUNICATION FROM THE COMMISSION

Structural indicators

COMMUNICATION FROM THE COMMISSION

Structural indicators

EXECUTIVE SUMMARY

Proposal for the list of
indicators for the
Spring Report 2004.

This  Communication  presents  the  Commission’s  proposal  for
the list of structural indicators for the Spring Report 2004. The
Communication also describes the progress made over the last
year in improving the structural indicators.

A shortlist of structural
indicators.

A publicly-accessible
database and website.

Unlike in earlier years, the Commission is proposing a shortlist
of only 14 structural indicators. The shortlist makes it easier to
present  policy  messages  and  the  Member  States’  positions
relative  to  the  key  Lisbon  targets  in  the  Spring  Report  thus
helping  to  maintain  the  momentum  of  the  Lisbon  strategy.  In
keeping  with  the  recent  streamlining  of  documents  for  the
Spring  European  Council  it  is  proposed  that  the  list  of
indicators is agreed for three years.

To accompany the shortlist of indicators, a publicly-accessible
database  and  website  contain  a  longer  list  of  structural
indicators.  This  will  allow  the  Spring  Report  to  draw  on  a
wider set of indicators and ensure that  the  public continues to
have  access  to  the  detailed  Eurostat  database  and  website  on
structural  indicators  which  have  been  put  together  since  the
Lisbon European Council. The database indicators should play
an important role in the EU’s policy processes.

Much progress has
been made on
developing and
improving indicators.

The  Commission  services  have  continued  to  develop  new
indicators and to improve the quality of the existing indicators.
The country coverage, length of time series and quality of the
increased.  In  addition,
existing  structural 
progress  has  been  made  in  developing  new  indicators  for
possible  inclusion  in  the  database  reflecting  the  EU’s  policy
priorities.  The  Commission  services  will  continue  to  develop
indicators across a wide range of areas over the next year.

indicators  has 

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COMMUNICATION FROM THE COMMISSION

Structural indicators

INTRODUCTION

The  Lisbon  European  Council  invited  “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.” (§36). In each of
the last three years the Commission and the Council have agreed a set of structural
indicators.  This  annual  Communication  on  structural  indicators  presents  the
Commission’s  revised  approach.  The  final  list  of  structural  indicators,  agreed  with
the Council, should be approved at the European Council in December 2003.

The  content  of  this  Communication  is  as  follows:  section  II  presents  the  revised
approach  to  the  structural  indicators;  section  III  presents  the  Commission’s
recommendation  for  the  list  of  structural  indicators  for  the  2004  Spring  Report;
section  IV presents the database  and the Commission’s ongoing  work  on  structural
indicators;  and  section  V  provides  a  short  conclusion.  Annex  1  provides  technical
details  on  the  list  of  structural  indicators.  Annex  2  provides  more  details  on  the
Commission’s work to improve the structural indicators.

THE REVISED APPROACH TO THE STRUCTURAL INDICATORS

The structural indicators have been successful in several ways. They have been used
in  the  Commission’s  Spring  Report  and  other  Commission  documents  to  provide
statistical  support  for  policy  messages  and  to  measure  progress  towards  the  Lisbon
objectives  (as  expanded  at  Gothenburg  and  refined  at  subsequent  European
Councils).  The  structural  indicators  have  also  attracted  a  lot  of  outside  attention
being one of Eurostat’s most popular websites. Indeed, the Member States have used
the structural indicators in their own reports, such as their national “Cardiff” reports
on economic reform.

However, the number of structural indicators has tended to increase over the past 3
years thus making  it more  difficult to draw a clear picture  on  progress  towards  the
Lisbon  objectives.  Recognising  this  issue  the  Spring  2003  European  Council
Conclusions  noted  the  Commission’s  intention,  in  close  co-operation  with  the
European  Statistical  System,  “to  report  in  time  for  the  2004  Spring  European
Council  on  how  the  use  of  structural  indicators  and  other  analytical  tools  for
assessing  progress  on  Lisbon  strategy  could  be  strengthened”  (§18).  As  a  first
response to this request, the Commission is proposing its set of structural indicators
in the form of a shortlist of only fourteen indicators.

The indicators on this shortlist have been chosen from last year’s 42 agreed structural
indicators. Last and previous years’ structural indicators are maintained by Eurostat
in  its  publicly-accessible  database  New  Cronos  and  on  the  structural  indicators
website.  The  shortlist  of  indicators  and  the  database  will  continue  to  be  the  main
statistical tools the Commission uses when drafting the Spring Report. This approach
involves  a  high  degree  of  continuity  with  previous  years  which  at  the  same  time

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reflects  the  great  effort  which  has  been  put  into  improving  the  quality  of  the
structural indicators and developing new indicators.

The  Commission  also  proposes  to  agree  the  shortlist  of  structural  indicators  every
three years. This is in accordance with the recent streamlining of documents for the
Spring  European  Council,  whereby  the  main  implementation  documents  for  the
Lisbon strategy (the Broad Economic Policy Guidelines, the Employment Guidelines
and the  Internal Market Strategy) are agreed  for three  years. However, the shortlist
could be modified if an important new policy priority was identified.

The proposed shortlist of indicators has several advantages. First, the main purpose
of the structural indicators, as stated in the Lisbon European Council conclusions, is
to  allow  for  an  assessment  of  progress  towards  the  Lisbon  objectives  in  the
Commission’s Spring Report. A shortlist of indicators makes it easier to present a
clear picture of the Member  States’ positions  relative to the  most  important Lisbon
targets.  This  clarity  will  help  to  maintain  the  momentum  of  the  Lisbon  strategy.
Using a smaller number of indicators it is also possible to achieve a better coverage
of the acceding and candidate countries and to present information on both levels and
changes in performance more easily.

Second, the proposed list of indicators includes well-known and easy-to-understand
indicators.  These  indicators  are  more  accessible  to  the  general  public  as  they  are
familiar and their drawbacks are also better known.

Third,  the  shortlist  of  indicators  has  a  clearer  logic.  Therefore  the  policy  messages
drawn  from  the  progress  assessment  based  on  the  structural  indicators  will  be
soundly  based.  Last  year’s  list  of  42  indicators  had  lost  much  of  its  original  logic
through revisions over the past 3 years.

Fourth,  agreeing  the  list  of  indicators  every  three  years  fits  with  the  streamlined
procedure for the Broad  Economic Policy Guidelines, the Employment  Guidelines
and  the  Internal  Market  Strategy.  To  avoid  a  loss  of  flexibility  the  shortlist  of  14
indicators  will  be  supplemented  by  the  structural  indicators  database  and,  when
necessary, the more detailed indicators used in the streamlined policy processes.

Finally, the stability of the list will be ensured by agreeing it once every 3 years. As
structural  issues develop only  slowly over time  and  as  several  of  the  indicators  are
key  Lisbon  targets,  it  seems  wise  not to  reconsider  the  list  each  year.  On  the  other
hand  there  will  be  more  flexibility  to  allow  newly  developed  indicators  to  be
included in the database of structural indicators.

THE LIST OF INDICATORS

This section presents the Commission’s proposed list of 14 structural indicators. The
list  is  based  on  the  political  priorities  of  the  Lisbon  strategy  as  elaborated  by  the
European Council.

The  list  of  structural  indicators  meets  the  criteria  which  have  been  used  for  the
structural  indicators  over  the  last  3  years.  The  indicators  are:  (1)  easy  to  read  and
understand;  (2)  policy  relevant;  (3)  mutually  consistent;  (4)  available  in  a  timely
fashion;  (5)  available  for  most,  if  not  all  Member  States,  acceding  and  candidate
countries; (6) comparable between these countries and, as far as possible, with other

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countries;  (7)  selected  from  reliable  sources;  and  (8)  do  not  impose  too  large  a
burden on statistical institutes and respondents.

The structural indicators proposed

for the Spring Report 2004

Indicators

1. GDP per capita

2. Labour productivity

3. Employment rate*

4. Employment rate of older workers*

Country coverage
Full coverage1

Full coverage

Full coverage

Full coverage

5.  Spending  on  human  resources  (public
expenditure on education)

15 MS + 12 ACC

6. Research and Development expenditure

15 MS + 12 ACC

7. Information Technology expenditure

15 MS + 11 ACC

8. Financial market integration (convergence
in bank lending rates)

Not applicable (measured
by the variation across
available countries)

9. At risk-of-poverty rate*

10. Long-term unemployment*

11. Dispersion of regional employment rates

12. Greenhouse gases emissions

13. Energy intensity of the economy

14. Volume of transport
* Indicators disaggregated by gender.

Full coverage

Full coverage
12 MS + 6 ACC2

Full coverage

Full coverage

15 MS + 11 ACC

14.

15.

The  list  of  indicators  is  balanced  to  reflect  the  importance  that  Lisbon  and
Gothenburg  placed  on  the  domains  of  employment,  innovation  and  research,
economic  reform,  social  cohesion  and  the  environment.  The  following  paragraphs
explain the reasoning behind the choice of each indicator for the shortlist.

GDP per capita is the most common measure of the standard of living. If the EU is
“to  become  the  most  competitive  and  dynamic  knowledge-based  economy  in  the
world”, the gap in GDP per capita with our main competitors needs to be eliminated.
A high level of GDP per capita is also important to provide the resources to promote
social  cohesion  and  to  protect  the  environment.  It  is  therefore  important  that  we
understand the underlying causes of our GDP growth performance and whether it is
sustainable. Other indicators in the list cover the most important factors driving GDP
growth.

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2

“Full  coverage”  means  data  are  available  for  all  15  Member  States  (MS)  and  all  13  acceding  or
candidate countries (ACC).
Calculated using NUTS2 regions and hence not applicable for 3 MS and 6 ACCs.

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18.

19.

20.

21.

22.

Labour productivity per person is a main indicator of EU competitiveness. Output
can  be  raised  through  more  labour  input  or  more  output  per  unit  of  labour  input
(labour  productivity),  which  is  driven  by  capital  and  technology.  Raising  labour
productivity is particularly important for sustaining growth during a period of ageing
populations.

The employment  rate is a  summary measure of the use  of  labour in  the  economy.
There  is  considerable  scope  for  the  EU  to  raise  its  employment  rate  and  hence  to
raise output and living standards. Lisbon set a target of raising the EU’s employment
rate to 70 per  cent by  2010, which  reflected the  broader  goal of  achieving “growth
with  more  …  jobs”.  Moreover,  employment  promotes  social  cohesion,  which  was
clearly recognised in the Lisbon European Council conclusions: “the best safeguard
against social exclusion is a job” (§32).

The employment  rate of  older workers is particularly low in the EU. Raising  the
employment  rate  of  older  workers  is  essential  in  order  to  achieve  a  higher  overall
employment rate (hence raising output and living standards). It also increases social
cohesion through a better integration of older workers in the labour force and helps
ensure the sustainability of economic growth by tackling the problems resulting from
ageing populations. Lisbon set a target of raising the EU’s employment rate of older
workers to 50 per cent by 2010.

Spending  on  human  resources,  here  defined  as  public  expenditure  on  education,
measures  the  amount  of  resources  devoted  to  improving  human  capital.  If  the
resources  are  used  efficiently,  spending  on  human  resources  increases  the
productivity of workers contributing to higher living standards. In addition, spending
on human resources  is important for social  cohesion by ensuring that  everyone  has
access  to  the  education  and  training  they  need  to  participate  in  an  increasingly
knowledge-based society.

Research  and  development  spending  is  essential  for  making  the  transition  to  a
knowledge-based  economy  as  well  as  for  improving  production  technologies  and
raising growth. Recognising the benefits of R&D for growth and aware of the rapidly
widening gap between Europe’s R&D effort and that of our principal partners in the
world,  the  Barcelona  European  Council  set  the  EU  a  target  of  increasing  R&D
expenditure to 3 per cent of GDP by 2010, two thirds of which should come from the
private sector.

IT  expenditure  is  included  in  the  shortlist  to  reflect  the  importance  of  IT  for
productivity  growth  in  the  knowledge-based  economy.  Research  is  continuing  into
the  explanations  for  the  differences  in  productivity  growth  since  the  mid-1990s
between the EU and the US and among the EU’s Member States. However, there is a
consensus emerging that the United States’ superior productivity performance has to
a  large  extent  been  driven  by  IT-producing  and  IT-using  industries.  This  finding
supports the emphasis the Lisbon European Council put on making the EU “the most
competitive and dynamic knowledge-based economy in the world” by 2010.

Financial  market  integration  is  a  key  part  of  the  Lisbon  agenda  of  economic
reform.  An  integrated  financial  market  facilitates  access  to  finance  and  reduces  its
cost.  Market  integration  of  financial  service  markets  should  bring  about  a
convergence in bank lending rates. This indicator will be significantly improved by

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24.

25.

26.

27.

28.

IV.

29.

the entry into force of Regulation ECB/2001/18 that will allow the European Central
Bank to collect harmonised time series across countries.

The at-risk-of-poverty rate, which is defined as the share of the population below a
defined poverty line according to equivalised disposable income, measures the risks
of  poverty  and  social  exclusion.  This  indicator  is  in  accordance  with  the  Lisbon
European Council's high priority on social cohesion.

Reducing  long-term  unemployment  is  important  for  achieving  the  Lisbon  goal  of
“greater  social  cohesion”,  because  the  long-term  unemployed  face  a  high  risk  of
social exclusion. The long-term unemployment rate also reflects structural problems
in  the  labour  market,  which  lead  to  an  under-utilisation  of  human  resources.  In
addition,  reducing  long-term  unemployment  is  important  from  a  human  capital
perspective,  because  the  long-term  unemployed  become  detached  from  the  labour
market and lose their skills.

Increasing  regional  cohesion  by  reducing  regional  disparities  as  measured  by  the
dispersion  of  regional  employment  rates  has  long  been  an  aim  of  EU  policy.
Ensuring  all  regions  enjoy  high  levels  of  employment  is  important  both  for  raising
employment and output across the economy and for improving social cohesion.

A degradation of the natural environment has negative effects on the sustainability of
economic  growth.  In  addition,  it  may  have  a  direct  negative  effect  on  welfare.
Climate  change  may  cause  significant  disruption  to  economic  activity  with
consequent  social  effects,  and  may  also  threaten  environmental  resources  such  as
biodiversity. The indicator greenhouse gases emissions measures whether the EU’s
growth is sustainable in terms of its potential impact on climate change. The EU has
clear targets for reducing greenhouse gases emissions.

The energy intensity of the economy measures the decoupling of energy use from
GDP growth and shows the extent to which energy is being used more efficiently in
the  creation  of  wealth.  Energy  use  from  non-renewable  resources  can  have  a
damaging  effect  on  the  environment  and  on  the  sustainability  of  economic  growth,
therefore it is important to use energy resources efficiently.

The volume of transport to GDP ratio measures the decoupling of freight transport
growth  from  real  GDP  growth.  Rising  volumes  of  traffic  can  damage  the
environment  and  economic  growth  through  rising  levels  of  congestion,  noise  and
pollution. The full internalisation of the social and environmental costs of transport
should promote a significant decoupling of transport growth and GDP growth.

THE DATABASE AND IMPROVEMENTS TO THE STRUCTURAL INDICATORS

Since  last  year’s  Communication  the  Commission  has  continued  to  improve  the
quality  of  the  structural  indicators  used  in  the  Spring  Report  2003;  to  integrate  the
acceding and candidate countries more fully into the structural indicators; to develop
new  indicators  on  structural  issues;  and  to  develop  a  more  detailed  quality
assessment procedure for the structural indicators.

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31.

32.

33.

34.

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Last  year’s  list  of  42  structural  indicators,  consisting  of  107  indicators  when
including disaggregations and sub-indicators, will be kept in a database managed by
Eurostat3 and on the structural indicators website4. The database will be a statistical
tool for the Commission to use when drafting the Spring Report but the shortlist of
indicators  will  provide  the  main  framework  of  statistical  reference  for  the  Spring
Report. The proposal for the database consolidates current practice because Eurostat
already maintains a structural indicators database.

The database has several other advantages. Firstly, decisions to include indicators or
remove  them  from  the  database  will  be  based  on  technical  criteria,  taking  into
account  policy  relevance  and  the  work  done  by  the  Commission  services,  Eurostat
and the Council working groups. This will help improve the overall statistical quality
of  the  indicators  in  the  database.  The  Commission  working  group  on  structural
indicators  will  reassess  the  contents  of  the  database  annually  in  line  with  this
approach.  Secondly,  there  will  be  more  flexibility  in  the  contents  of  the  database
because  not  all  of  the  indicators  will  have  to  be  presented  in  the  Spring  Report.
However, there will still be a need for stability in the content of the database to allow
for the measurement of progress over time as requested by the Council and to allow
for a process of continuous improvement of the indicators. Thirdly, the database will
be  more  transparent  to  the  public  because  merged  indicators,  for  example  “market
integration”  (consisting  of  “the  convergence  of 
interest  rates”  and  “trade
integration”)  and  “protection  of  natural  resources”  (consisting  of  “fish  stocks  in
European  marine  waters”  and  “protected  areas  for  biodiversity”),  can  be  split  into
their  constituent  indicators  which  have  more  self-explanatory  names.  Fourthly,  the
database  means  that  sub-indicators  will  not  be  required  in  the  shortlist  because
disaggregations can be kept in the database.

As regards improvements to the quality of the structural indicators, Eurostat has been
working  closely  with  the  other  Commission  services  and  with  the  European
Statistical  System  on  a  wide  range  of  indicators.  Over  the  last  year  Eurostat  has
improved the country coverage (especially for the acceding and candidate countries),
time  series  and  quality  of  the  data  for  many  of  the  existing  structural  indicators.
Moreover,  Eurostat  has  continued  to  improve  its  publicly  accessible  internet  site
which contains detailed methodological information as well as time series data for all
the structural indicators. More details are provided in annex 2.

The Commission Communication on structural indicators (October  2002) presented
twenty-one  indicators  to  be  developed.  A  summary  of  the  progress  made  since  the
last Communication is provided in annex 2. Some of the indicators to be developed
could  be  included  in  the  database  of  structural  indicators.  The  decision  on  which
indicators to include in the database will be based upon technical criteria.

Finally,  Eurostat  in  co-operation  with  the  European  Statistical  System  is  currently
working on  a procedure to attach a quality profile to the structural indicators based
on  a  set  of  user-oriented  quality  criteria5.  It  would  be  issued  by  Eurostat  in  co-
operation  with  the  European  Statistical  System  making  use  of  existing  working

To access Eurostat’s New Cronos database please contact Estat-DataShopSupport@cec.eu.int.
http://europa.eu.int/comm/eurostat/structuralindicators
These quality criteria are derived from the joint Eurostat and European Statistical System definition of
quality.

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structures.  The  profile  will  help  to  base  decisions  for  including  or  removing
indicators from the database on technical criteria.

V.

35.

CONCLUSION

The  approach  presented  in  this  note  has  the  twin  advantages  that  (1)  the  list  of  14
indicators makes it easier to present the results in the Spring Report and increases the
political visibility of the structural indicators and (2) the database with a longer list of
structural  indicators  allows  the  Commission  more  flexibility  in  selecting  indicators
for its analysis in the Spring Report.

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ANNEX 1 – Definition, Source, Availability and Policy Objective behind the 14 structural indicators

Indicator

Definition

Source

Availability #

Coverage: all MS, all ACCs, US, Japan, Iceland
and Norway.

Time series: 1991-2001 (forecasts for 2002-04).

Coverage: all MS, all ACCs, US, Japan, Iceland
and Norway.

Time series: 1991-2001 (forecasts for 2002-04).

Coverage: all MS, all ACCs, Iceland and Norway.
No comparable data for the US and Japan.

Time series: 1990 – 2001.

Coverage: all MS, all ACCs, Iceland and Norway.
No comparable data for the US and Japan.

Time series: 1990 – 2001.

Coverage: All MS, all ACCs (except SI), US,
Japan, Iceland and Norway.

Time Series: 1993-2001.

Overall policy
objective

Standard of living.
Social and
environmental
welfare.

Overall efficiency
of the economy.

Full employment.
Combating social
exclusion.

Full employment.
Combating social
exclusion.

Quality of human
resources.

1. GDP per capita in PPS

GDP per capita in Purchasing
Power Standard (PPS), EU15
=100.

Eurostat; National Accounts.

2. Labour productivity per

person employed

GDP in PPS per person employed,
EU15=100.

Eurostat; National Accounts
and OECD.

Employed persons aged 15-64 as
a share of the total population of
the same age group.

Eurostat; Labour Force
Survey.

Employed persons aged 55-64 as
a share of the total population of
the same age group.

Eurostat; Labour Force
Survey.

Total public expenditure on
education as a percentage of GDP.

Joint Unesco / OECD /
Eurostat questionnaire.

3. Employment rate *

4. Employment rate of
older workers *

5. Spending on human
resources (public
expenditure on
education)

6. R&D expenditure

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

* Indicator disaggregated by gender.

MS = EU Member States, ACCs = Acceding and candidate countries.

10

Gross domestic expenditure on
research and development
(GERD) as a percentage of GDP.

Eurostat questionnaire.

Coverage: all MS, all ACCs (except MT), US,
Japan, Iceland and Norway.

Time Series: 1991-2000 (2001 and 2002 for some
MS).

R&D effort.

Indicator

Definition

Source

Availability

Overall policy
objective

7. IT expenditure

Expenditure on Information
Technology as a percentage of GDP.

8. Financial market

integration
(convergence in bank
lending rates)

9. At risk-of-poverty rate*

Coefficient of variation across
countries on annual interest rates
charged on short-term corporate debt.

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

OECD / World
Information Technology
and Services Alliance
(WITSA) / International
Data Corporation (IDC) /
European Information
Technology Observatory
(EITO)

DG MARKT and Eurostat
based on data from the
European Central Bank
and national central banks.

Eurostat; European
Community Household
Panel (ECHP)

Coverage: All MS, all ACCs (except CY and
MT), US, Japan and Norway.

Time Series: 1991-2002.

Diffusion of ICT.

Coverage: 12 MS.

Time series: 1993-2002.

Coverage: All MS, all ACCs.

No data for US and Japan.

Time series :1995-2000 (2001 for some countries)

Financial market
integration.

Combating poverty
and social
exclusion.

10. Long-term

unemployment rate *

Total long-term unemployed (over 12
months) as a percentage of the total
active population aged 15-64.

Eurostat; based on Labour
Force Survey.

Coverage: All MS, all ACCs, US, Japan, Iceland
and Norway.

Time series: 1990-2001.

Full employment.
Combating social
exclusion.

11. Dispersion of regional
employment rates

Coefficient of variation of
employment rates across regions
(NUTS 2 level) within countries.

Eurostat; based on Labour
Force Survey.

Coverage: All MS except DK, IRL and LUX. No
data for French DOM. Data on BG, CZ, HU, PL,
RO and SK of the ACCs. No US, Japan, Iceland
and Norway data.

Cohesion.

Time series: 1996-2001.

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Indicator

Definition

Source

Availability

Overall policy
objective

12. Total greenhouse
gases emissions

 Percentage change in emissions of 6
main greenhouse gases (CO2, CH4,
N2O, HFCs, PFCs and SF6) since
base year and targets according to
Kyoto Protocol / EU Council
Decision for 2008-2012. Index base
year = 100, expressed in CO2-
equivalents.

European Environment
Agency.

Coverage: all MS, all ACCs, US, Japan, Iceland
and Norway.

Time series: 1990-2000

Limit climate
change and
implement the
Kyoto Protocol.

13. Energy intensity of the

economy

Gross inland consumption of energy
divided by GDP (at constant prices,
1995 = 100).

Eurostat; energy statistics.

14. Volume of freight
transport relative to
GDP

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

Eurostat; transport
statistics

Coverage: all MS, all ACCs, US, Japan, Iceland
and Norway.

Time series: 1991-2001.

Coverage: all MS, all ACCs (except CY and MT),
US, Japan, Iceland and Norway.

Time series: 1991-2001.

Use energy more
efficiently.

Decouple transport
growth from
economic growth.

12

ANNEX 2 – IMPROVING THE STRUCTURAL INDICATORS

1.

2.

3.

4.

This  annex  describes  progress  made  with  respect  to  improving  the  structural  indicators
since  last  year’s  Commission  Communication  was  published  in  October  2002.  It  also
presents the new list of indicators to be developed.

Eurostat has been working with the other Commission services and with Member States’
National  Statistical  Institutes  to  improve  the  quality  of  last  year’s  list  of  42  indicators.
Over the last year Eurostat has improved the country coverage (especially for the acceding
and  candidate  countries),  time  series  and  quality  of  the  data  for  many  of  the  existing
structural indicators.

Eurostat has continued to improve its publicly accessible internet site which now contains
detailed methodological information as well as the data for all the structural indicators. The
structural indicators website has consistently ranked among the most visited at Eurostat’s
website.

Eurostat and the Commission services have also continued their work on last year’s list of
indicators to be developed. Details on the indicators are provided below.

Composite indicators

5.

6.

The  Commission  services,  including  Eurostat  and  the  Joint  Research  Centre,  have
continued their work on  composite indicators since last  year.  In particular,  progress has
been  made  in  the  domain  of  innovation  and  research  on  two  composite  indicators:
“investment in the knowledge-based economy” and “performance in the transition towards
the  knowledge-based  economy”.  These  two  composite  indicators  were  included  in  DG
Research’s  Key  Figures  2002  report  which  was  published  in  November  2002  and  in  the
Third European Report on Science and Technology Indicators published in March 20036.
These  reports  presented  an  analysis  of  the  two  composite  indicators  and  the  conclusions
which could be drawn from them.

The  Commission  services  are  also  developing  a  composite  indicator  on  “e-business
readiness”  which  comprises  sub-indicators  on  how  much  use  businesses  make  of  digital
technologies for various business processes such as banking, managing orders, buying and
selling.  The  methodological  work  is  underway  and  the  first  data  for  constructing  the
indicator should be available early in 2004. Work on other composite indicators such as the
Internal Market Index7 has continued.

General Economic Background

7.

6

7

Indicators on potential output and total factor productivity calculated using a production
function approach have now been developed. However, a small number of Member States
still have some problems with the use of these indicators in the EU’s policy processes.

http://www.cordis.lu/rtd2002/indicators/home.html
Internal Market Scoreboard No. 11, DG MARKT publication, November 2002.
http://europa.eu.int/comm/internal_market/en/update/score/score11/im-index-2002_en.pdf

13

                                                
Employment

8.

9.

10.

11.

Following  the  adoption  by  the  Council  in  July  2003  of  the  new  Employment  Guidelines
2003-2006,  the  Employment  Committee  is  currently  reviewing  the  list  of  employment-
related indicators to be  used to monitor the Guidelines’ implementation. A revised list is
expected.

The Employment Committee is in particular reviewing the indicator on vacancies, which
could give indications of bottlenecks and labour shortages on the labour market by sector.
Progress is being made on the Eurostat Job Vacancy survey. Eurostat has started to collect
quarterly data on job vacancies on the basis of a business survey with back data from the
first quarter of 2001. Coverage of the Member States will be improved between now and
mid-2004.

The  Commission,  working  with  the  OECD,  has  now  developed  an  indicator  of  the
marginal  effective  tax  rate  relating  to  the  unemployment  trap  for  a  single  individual
moving  from  unemployment  to  work  earning  67%  of  the  average  production  worker’s
wage. The  Commission is still developing  an  indicator on the  marginal effective tax rate
relating to the poverty trap.

The  Barcelona  European  Council  established  targets  for  childcare  facilities.  A  study  on
comparable  statistics  in  the  area  of  childcare  will  soon  be  finalised  covering  the
development of a methodology for data collection and common definitions as well as the
collection  of  national  statistics.  A  variable  on  childcare  will  be  included  in  the  new  EU-
SILC (European Union Statistics on Income and Living Conditions) survey with questions
on the type of childcare and the number of hours of care per week. This will allow for the
calculation  of  the  indicator  from  a  Community  source,  probably  by  the  end  of  2003  for
some Member States and a large number of  countries by the end of 2005. Some national
data on childcare are already available from Member States’ National Action Plans.

12.

Several indicators of the quality of work are already included in the database of structural
indicators  such  as  life-long  learning  and  accidents  at  work.  Nevertheless,  work  is
continuing to develop indicators on other aspects of the quality of work.

Innovation and Research

13.

14.

15.

Eurostat is currently in the process of consulting national authorities on the possibility to
develop  a  consistent  times  series  covering  public  and  private  expenditure  on  human
capital.

Several  indicators  on  e-commerce  are  being  used  in  the  e-Europe  framework,  all
stemming from official statistics. The data currently cover the existing Member States but
are expected to cover the acceding and candidate countries from 2004 onwards.

As  stated  in  last  year’s  Communication  the  indicator  e-government  is  defined  as  the
average  percentage  of  public  services  available  on-line.  The  indicator  has  been  used
successfully in the Commission’s e-Europe benchmarking process. Data for October 2001

14

and  April  2002  are  already  available  at  the  Commission’s  website8  and  an  update  of  the
data is currently underway.

A  project  is  under  way  at  Eurostat  to  construct  a  coherent  conceptual  framework  for
measuring ICT expenditure and investment. The project aims at defining the variables to
be  collected  and  identifying  the  vehicles  for  collecting  the  data.  First  results  from  the
piloting phase should be available by the end of 2004. Moreover, an appraisal of existing
sources and recommendations for future data collection are expected by the end of 2003.

An  indicator  measuring  broadband  internet  access  is  being  developed.  Widespread
availability of broadband internet access is a main  objective  of  the  eEurope  2005  Action
Plan which was endorsed by the Seville European Council.

16.

17.

Economic Reform

18.

19.

Harmonised  data  on  business  demography  were  first  published  by  Eurostat  in  March
2003.  In  the  most  recent  publication  there  are  data  on  “enterprise  births”,  “the  survival
rates of newly-born enterprises” and “enterprise deaths” covering 10 Member States for the
years 1997 to 2000.

As  regards  the  cost  of  capital  and  financial  integration,  the  Commission  services  have
continued efforts to develop indicators for the monitoring of financial services and capital
markets.  The  biannual  implementation  reports  of  the  Financial  Services  Action  Plan
include  other  indicators  mapping  integration  in  these  markets  (for  example,  cross-border
bank deposits or portfolio diversification) as well as other key aspects of performance such
as  efficiency  in  stockmarkets  (bid-ask  spreads),  mergers  and  acquisitions  and  financial
stability indicators.

Social Cohesion

20.

The Social Protection Committee’s “Report on Indicators in the field of poverty and social
exclusion”,  containing  a  list  of  18  common  indicators,  was  endorsed  by  the  Laeken
European  Council  in  December  2001.  Following  from  this  work,  indicators  are  being
developed  on,  for  instance,  health,  housing  and  living  conditions.  For  the  Spring  Report
2004, data for 2001 for the social cohesion indicators based on the European Community
Household Panel are expected to be available. In the future, such indicators will be based
on  the  “Statistics  on  Income  and  Living  Conditions”  (EU-SILC)  which  is  expected  to
provide data with a shorter (two-year) lag.

21.

Regional GDP per capita in PPS is available and used by the Commission in its policy
processes.  However  no  progress  has  been  made  regarding  the  development  of  regional
price indices due to the high estimated cost.

Environment

22.

Six  indicators  to  be  developed  on  the  environment  were  included  in  last  year’s
Communication.  The  March  2003  European  Council  conclusions  (§57)  placed  particular
emphasis on the importance of “improving environment-related structural indicators” as a

8

http://europa.eu.int/information_society/eeurope/benchmarking/list/2002/index_en.htm

15

                                                
23.

24.

25.

26.

27.

way  of  helping  to  deliver  the  full  set  of  reforms  proposed  at  the  Gothenburg  European
Council.

Consumption  of  toxic  chemicals,  is  being  developed  as  part  of  Eurostat’s  on-going
project on a set of chemicals indicator. A group of experts is currently working to identify
appropriate indicators and methodology to measure the risk posed by the use of chemicals
in society. The indicator is dependent on information on chemicals becoming available via
the  REACH  database.  Therefore  any  delay  in  implementing  REACH  (Registration,
Evaluation and Authorisation of Chemicals – the system to implement the EU’s “Strategy
for a future Chemicals Policy”) will affect the feasibility of this indicator. A final report is
expected by the end of 2004. To reflect better the content of the indicator, it is proposed to
rename it “chemicals”.

In  July  2003,  the  newly  established  Network  of  Competent  Authorities  on  Health
Information and Knowledge studied a proposal for a recommended set of first phase core
indicators on health status. The set includes an indicator to measure healthy life years. The
final endorsement of the definition of the indicator is expected later in 2003. The elements
to  calculate  this  indicator  are  now  contained  in  the  Minimum  European  Health  Module
included in EU SILC (Statistics on Income and Living Conditions) for which routine data
collection will start in 2004 in the Member States and 2005 in the acceding and candidate
countries.  Before  having  EU  SILC  data  available,  for  a  transition  period,  some  national
sources could be used.

Work  on  a  biodiversity  index  is  continuing  under  the  Biodiversity  Implementation
Indicators  for  the  Community  Biodiversity  Action  Plans  (BIO-IMPS  project).  This
indicator  differs  from  the  existing  structural  indicator  “protected  areas  for  biodiversity”
which itself is being improved to include more qualitative aspects.

Data  on  resource  productivity  for  certain  resources  such  as  electricity  generation  are
already  available.  The  Commission  will  launch  a  study  on  indicators  to  support  the
Integrated Product Policy (IPP) in  2003.  The  forthcoming  strategy on  resources will also
consider developing similar indicators.

As  regards  both  the  recycling  rate  of  selected  materials  and  generation  of  hazardous
waste  the  recently  adopted  Waste  Statistics  Regulation  should  provide  harmonised
statistics with improved country coverage, timeliness and quality from 2006 onwards.

New list of indicators to be developed

28.

The new list of indicators to be developed consists of indicators retained from last  year’s
list which have not yet been fully developed. Those indicators which are sufficiently well
developed  have  been  included  in  the  database  of  structural  indicators.  This  concerns  the
unemployment trap, business demography and e-commerce.

16

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. Poverty trap (marginal 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-government
10. ICT investment
11. Broadband internet access
III. Economic Reform
12. Cost of capital
13. Financial integration
IV. Social Cohesion
14. Regional GDP per capita in PPS.
Indicators will continue to be developed by the Social Protection Committee
and the Commission services.
V. Environment
15. Consumption of toxic chemicals
16. Healthy life years
17. Biodiversity index
18. Resource productivity
19. Recycling rate of selected materials
20. Generation of hazardous waste

17