ON HOW BEST TO HELP THE DEVELOPMENT OF ENTERPRISES OF THIS CATEGORY .
THE PROPENSITY TO INVEST AND THE SUPPLY OF CAPITAL TO THE ENTERPRISE SECTOR DEPEND IN PART UPON THE STATE OF DEMAND AND ACTIVITY IN THE ECONOMY BUT SEVERAL ELEMENTS OF THE SYSTEM OF TAXATION AND FINANCING SUCH AS TAXATION OF PROFITS AND DIVIDENDS , DEPRECIATION RULES , PREFERENTIAL FINANCING , DIRECT SUBSIDIES , ETC . MAY ALSO EXERT A STRONG INFLUENCE UPON THE INVESTMENT CLIMATE . EXISTING POLICIES IN THESE RESPECTS ARE HIGHLY DIFFERENT AS BETWEEN MEMBER STATES AND EXTREMELY COMPLEX . SEVERAL MEMBER STATES HAVE RECENTLY ADAPTED THEIR AIDS OR TAX SYSTEMS AFFECTING INVESTMENT , AND A MORE EXTENSIVE ENQUIRY AT THE COMMUNITY LEVEL INTO THE MOST EFFECTIVE TECHNIQUES IN THIS AREA WOULD SEEM WARRANTED . IN SOME MEMBER STATES THERE ARE GROUNDS ALSO FOR REMOVING SUBSIDIES TO SAVINGS THAT GO INTO RISKLESS GOVERNMENT BONDS AND OTHER FORMS OF PASSIVE INVESTMENT , WHICH HAVE THE EFFECT OF DEPRESSING THE RELATIVE PROFITABILITY OF RISK-TAKING CAPITAL .
( G ) MANPOWER POLICY
IN THE IMMEDIATE FUTURE , THE COMBINATION OF FACTORS AFFECTING THE LABOUR MARKET ARE BOUND TO CAUSE SOME INCREASE IN UNEMPLOYMENT . ON THE ONE HAND , THE DEMOGRAPHICALLY DETERMINED INCREASE IN THE POTENTIAL LABOUR FORCE WILL BE RISING THROUGHOUT THE EARLY 1980S AT A MAXIMUM RATE OF TWO AND A HALF TO THREE MILLION YOUNG PEOPLE ENTERING THE LABOUR FORCE EACH YEAR . ON THE OTHER HAND , THE NEW OIL SHOCK HAS CAUSED A SIGNIFICANT LOSS IN ECONOMIC POTENTIAL , WHICH WILL TAKE TIME , INVESTMENT , RETRAINING AND REORGANIZATION TO MAKE GOOD . SINCE THIS NEW PHASE OF ADJUSTMENT IS ALSO COUPLED TO THE NEED TO REDUCE INFLATION , THE COMBINATION OF CIRCUMSTANCES WOULD , SPONTANEOUSLY , CREATE A SHARPLY RISING TREND IN OVERALL UNEMPLOYMENT . THIS WOULD HIT YOUNG PEOPLE , BEING NEW ENTRANTS INTO A WEAK LABOUR MARKET , PARTICULARLY HARD .
THESE CONDITIONS CALL FOR A PARTICULAR SET OF PRIORITIES TO GUIDE THE DEVELOPMENT OF MANPOWER POLICIES . THESE MUST BE ADRESSED TO :
( I ) THE SPECIAL PROBLEMS OF INCREASED YOUTH UNEMPLOYMENT ,
( II ) THE ADAPTATION OF VOCATIONAL SKILLS TO THE NEW PATTERN OF DEMAND , AND
( III ) ACHIEVING A BETTER BALANCING OF SUPPLY AND DEMAND IN THE LABOUR MARKET IN WAYS THAT ARE NOT PREJUDICIAL TO THE COMPETITIVENESS OF INDUSTRY NOR TO THE NEED FOR FLEXIBLE ADJUSTMENT OF ECONOMIC STRUCTURES .
SOME MEMBER STATES , NOTABLY GERMANY , HAVE INTRODUCED LARGE-SCALE VOCATIONAL TRAINING AND WORKEXPERIENCE SCHEMES FOR SCHOOL LEAVERS . SUCH SCHEMES COULD BE DEVELOPED MORE EXTENSIVELY ELSEWHERE , AND THERE IS A STRONG CASE FOR DIRECTING THEIR EXPANSION TOWARDS SKILLS IN NEWLY INCREASED DEMAND LIKE ENERGY SAVING AND MANY SERVICE SECTOR ACTIVITIES . BUDGETARY CONSTRAINTS ON PUBLIC EXPENDITURE ARE OF COURSE SEVERE ; HOWEVER , THE DESIRABILITY OF EXPENDITURE OF THE TYPE HERE IN QUESTION , COMPARED TO INCREASES IN EITHER THE VOLUME OR RATES OF UNEMPLOYMENT BENEFITS , IS AN EXAMPLE