EU KLEMS Growth and Productivity Accounts: First Launch

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EU KLEMS Growth and Productivity Accounts First
Launch

• Brussels, 15 March 2007
• Bart van Ark (Groningen Growth and Development
  Centre, University of Groningen)
• This project is funded by the European
  Commission, Research Directorate General as part
  of the 6th Framework Programme, Priority 8,
  "Policy Support and Anticipating Scientific and
  Technological Needs".

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Main characteristics of EU KLEMS

• EU KLEMS project is 3-year statistical and
  analytical research project funded by 6th
  Framework Programme
• Purpose is to create a database on growth and
  productivity accounts by industry (NACE 60) for
  EU member states with a breakdown into
  contributions from capital (K), labour (L),
  energy (E), materials (M) and service inputs (S)
• 16 research institutes, with country
  contributions from consortium partners and
  coordination, harmonization and processing at RUG
  Groningen and NIESR/Univ. of Birmingham
• Strong co-operation with national statistical
  institutes, Eurostat and European Commission
  services (DG EFCIN)
• In final phase conduct a number of analytical
  research projects on labour market skills,
  technology and innovation, and links to
  micro/firm level research

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Growth accounts decomposes output growth in
inputs and productivity
Gross output, GDP or industry value added
Energy, Materials Service inputs
(skill, gender, age)
Multi factor productivity
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What is new in EU KLEMS?

• Systematic data collection based on national
  accounts and complementary official sources (LFS
  and other surveys)
• Long time coverage 1970-2004, with greatest
  detail for post-1995 Harmonized methodologies on
  industry classification, capital and labour
  input, deflation and aggregations (e.g. market
  economy, market services, ICT producing vs.
  using)
• Decomposition of capital and labour input
• Capital assets in 7 asset types
• Labour input in 18 categories (3 x skill 3 x age
  and gender)
• Broad coverage of EU countries
• Growth accounts coverage of old EU-10 (excl.
  GR, IR, LU, SE, PT) plus 5 new member states
  (incl. PL, SK, HU, CZ and SI)
• Limited coverage of other 5 other old EU
  countries and 5 new member states (CY, MT, LT, LV
  and EE)
• Also comparisons with U.S. and Japan
• Distinction between analytical module for all
  countries (with feedback from NSIs but not
  official statistics) and statistical modules for
  individual countries (validated by NSIs)

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Sector Contributions to Labour Productivity
Growth in Market Economy Confirm Existing View
1995-2004
The EU-US differential is not in manufacturing

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Sector Contributions to Labour Productivity
Growth in Market Economy Confirm Existing View
1995-2004

and minor in ICT production
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Sector Contributions to Labour Productivity
Growth in Market Economy Confirm Existing View
1995-2004
but huge in market services

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Sector Contributions to Labour Productivity
Growth in Market Economy Confirm Existing View
1995-2004
Transitional productivity growth in new member
states in manufacturing, agriculture, utilities
and distribution

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Sector Contributions to Labour Productivity in
Market Economy Drive Cross Country Differences
Typical catching up countries (Ireland and
Greece) at top of growth range
1995-2004

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Sector Contributions to Labour Productivity in
Market Economy Drive Cross Country Differences
Several Nordic countries (Finland and Sweden)
also at higher end notably due to (ICT production
1995-2004

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Sector Contributions to Labour Productivity in
Market Economy Drive Cross Country Differences
Market services account for productivity growth
differential between UK and France/Germany
1995-2004

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Sector Contributions to Labour Productivity in
Market Economy Drive Cross Country Differences
Growth in Spain and Italy is keeping EU average
down and is across the board
1995-2004

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Sources of Growth to GDP in Market Economy also
Confirms Existing Views
Acceleration in EU labour input growth

EU15ex excludes Portugal, Luxembourg, Ireland,
Sweden and Greece
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Sources of Growth to GDP in Market Economy also
Confirms Existing Views
Slightly smaller contribution from ICT to
growth compared to US

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Sources of Growth to GDP in Market Economy also
Confirms Existing Views
But EU-US differential Is largely in MFP

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Market services make up important part of the
EU-US story
Collapse of MFP in EU vs. strong acceleration in
US market services

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Country variation in sources of growth in market
economy points at role of employment and MFP
1995-2004
Germany and Spain are at opposite ends on scale
of employment creation

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Country variation in sources of growth in market
economy points at role of employment and MFP
1995-2004
but MFP contribution makes the big difference
between fast and slow growth

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Future steps in EU KLEMS

• Implementation phase
• Development of statistical modules for individual
  countries
• Maintenance and prolongation of analytical module
• Extension of database (more country detail,
  intangibles incl. human capital, link with micro
  data)
• Development of WORLD KLEMS
• Other OECD US, Japan, Canada, Australia
• Link to existing projects Asian ICPA
• Emerging economies China, India, Russia, Latin
  America
• Challenges ahead
• Measurement of non-market services
• Extended integration with input-output framework
• Extended integration with trade and FDI flows
• What does MFP really mean? (intangibles,
  regulations, innovation)