Sustainable growth in the EU: enhancing productivity growth while respecting the planetary boundaries

In the light of global megatrends such as ageing, globalisation, technological transformation and climate change, the 2019 ESDE is dedicated to sustainability.

One of the major sustainability challenges is sluggish productivity growth despite accelerating technological change and the increasing qualification levels of the EU labour force. We explore the preconditions for sustained economic growth, based on region-level and firm-level data analysis, focusing on complementarities between efficiency, innovation, human capital, job quality, fairness and working conditions. We identify policies that could boost productivity without increasing inequality.

We examine the impact of climate action on the economy and on employment, income and skills. In the light of EU welfare losses from climate inaction, we examine the sectors in which employment and value generation are taking place in the EU economy, estimate the overall impact of climate action in EU Member States, following a full implementation of the Paris agreement, on GDP and employment, as well as its potential impact on job polarisation.

Our main conclusion is that tackling climate change and preserving growth go hand in hand. We highlight a number of policy options to preserve the EU's competitiveness, sustain growth and spread its benefits to the entire EU population, while pursuing an ambitious transition to a climate-neutral economy.

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