Notes on the Lisbon process: An analysis of the impacts of reaching the Lisbon targets for skills, R&D and the administrative burden in the European Union

This paper describes the National Institute of Economic and Social Research’s (NIESR)approach to the analysis of the implementation of the Lisbon Agenda. It forms the background to the European Commission Competitiveness Report chapter on spillovers and the Lisbon Process. The paper describes the assumptions that have been made and discusses in more depth the outline results presented in that chapter. The paper discusses both synergies and spillovers, and looks first at the impacts from policies taken unilaterally in each country one at a time and then all simultaneously in all the European Union countries. Simulations show there are a number of spillovers from the various policies and targets within the Lisbon Agenda. Our analysis suggests that if the administrative burden were to be reduced by 25 per cent then the aggregate EU unemployment rate would be ¾ percentage point lower than baseline. The results suggest synergies are strongest between the policies to increase skills and to raise R&D expenditure. Overall the effective implementation of the Lisbon Agenda would be to increase the level of output by 0.6 per cent.