Assessing European competitiveness : the contribution of CompNet research

Restoring competitiveness is broadly acknowledged as the critical building block for achieving sustainable growth, but defining competitiveness, both in terms of tools as well as objectives, is a matter of debate. • The Competitiveness Research Network (CompNet) adopts a pragmatic approach, defining "a competitive economy [as] one in which institutional and macroeconomic conditions allow productive firms to thrive... [thus supporting] the expansion of employment, investment and trade" (Draghi, 2012). • This approach requires handling (i) firm-level features, most notably productivity, (ii) macroeconomic factors, and (iii) cross-border aspects related to the operation of global value chains (GVCs). • While at first concentrating solely on the original mandate of explaining export competitiveness, the Network has extended the scope of its research to broader aspects related to productivity drivers. • The above is also in view of the fact that "structural and cyclical policies - including monetary policy - are heavily interdependent. Structural reforms increase both potential output and the resilience of the economy to shocks. This makes structural reforms relevant for any central bank, but especially in a monetary union" (Draghi, 2015). • The objective of the Network is to identify the factors which contribute to raising the economy's potential, by establishing a tight relationship between instruments, mechanisms and outcomes (such as regarding trade, per capita income, productivity and employment). To do so, it has developed novel indicators and databases, and it has undertaken original research.