“Job creation is the key to competitiveness,” says finance expert
Arturo Bris discusses job creation, competitiveness and Germany’s performance ahead of event series in the country
Arturo Bris, IMD Professor and Director of the IMD World Competitiveness Center, is headed to Germany to shed light on "Generating Long-Term Sustainable Growth" in Düsseldorf at midday and Frankfurt in the evening on 29 October.
IMD spoke with him ahead of the events to find out some of the major trends in competitiveness.
IMD: Where are some of the most competitive economies today?
Arturo Bris: "Competitiveness, and hence economic growth, is coming gradually back to traditional economies like the US, the UK, continental Europe, and even Japan. For centuries they have built the right economic institutions such as education, healthcare, values and business culture, which are the pillars of long-term prosperity. There are certainly some challenges, especially for Europe, but not as many as there are for emerging economies like China, India, or those in Latin America. In all regions, job creation is the key to competitiveness."
IMD: Why is job creation essential to competitiveness?Arturo Bris: "Competitive economies are those which are able to generate sustainable value for their people and enterprises. The virtuous cycle of competitiveness therefore relies on job creation. When people get jobs, they save and spend. They support the government through taxes. They improve their living standards. Governments in countries that create jobs are then able to finance schools and hospitals, roads and access to water, all leading to more prosperity and welfare. When a government forgets that its main objective is to promote job creation, it is leading the country toward failure in the long-term."
IMD: How can a government encourage mass job creation?
Arturo Bris: "First of all, governments do not create jobs—they facilitate the conditions for the private sector to do it. Our lessons from the past show that governments that promote public jobs are too fat and inefficient. The government should therefore: (i) enact business-friendly regulation; (ii) encourage entrepreneurship and risk-taking; and (iii) generate the necessary infrastructure for a business sector to flourish, which in turn requires a focus on education, health and scientific progress."
IMD: How is Germany doing in this regard and what could it do better?
Arturo Bris: "Germany's economic performance has been, relatively speaking, stellar in recent years. The pillars of German competitiveness are a very strong private sector and amazing infrastructure, especially in the fields of science and technology. However, as with most European countries in 2015, Germany's public sector is still not completely focused on business creation and job promotion, and is instead trying to recover from the European and global crises. Once these clouds disappear, Germany will certainly be a growth engine for the world economy."
Join Professor Bris for the event series "Generating Long-Term Sustainable Growth: The Challenge of Competitiveness" in Düsseldorf at 12:00 and in Frankfurt at 18:00 on October 29th to discuss these issues and more.
These events are organized by the IMD Alumni Club Germany.
Business Lunch: 12:00 – 14:00
Wirtschaftsclub Düsseldorf GmbH, Blumenstrasse 14, 40212 Düsseldorf
Evening Event: 18:00 – 20:30
Allianz Versicherungs AG, Thordor-Stern-Kai 1, 60596 Frankfurt