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Crossing Cultures by Ian Buruma |
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The Statesmen's Debate by Castaneda, Haass, Rocard |
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Anatomy of the Global Economy by J. Bradford DeLong |
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The Rebel Realist by Joschka Fischer |
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Capitalism Then and Now by Harold James |
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Global Warning by Bjorn Lomborg |
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European Observer by Dominique Moisi |
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Of Might and Right by Joseph S. Nye |
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History in Motion by Chris Patten |
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Roads to Prosperity by Dani Rodrik |
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The Unbound Economy by Kenneth Rogoff |
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Economics and Justice by Jeffrey D. Sachs |
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Finance in the 21st Century by Roubini, Shiller |
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The Ethics of Life by Peter Singer |
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Transatlantic Perspectives by Feldstein, Sinn |
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I Dissent: Unconventional Economic Wisdom by Joseph E. Stiglitz |
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Against the Current by Robert Skidelsky |
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Awakening India by Shashi Tharoor |
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The Next Wave by Naomi Wolf |
LJUBLJANA – At the Spring European Council meeting on March 13-14, EU member states’ leaders will launch the second cycle of the Lisbon Strategy for Growth and Jobs, a strategy launched in 2000 with the aim of making the EU the most competitive knowledge-based economy in the world. The EU’s current economic upturn suggests that the strategy is working, particularly after its renewal in 2005. But some areas in which Europe could gain a competitive advantage have been neglected. One such area is creativity.
The Lisbon Strategy owes much to the Austrian economist Joseph Schumpeter, who claimed that profit results from innovation. This is an appropriate European compromise between the theory that profit comes from exploitation (Marx) and the view that it results from transactions that make both parties happier than they were before (Friedman). It is also appropriate for an economy where goods and services fulfill people’s needs and where products compete on their technical or functional features.
But in post-industrial societies, consumers look for more in a product than just functionality. Relatively prosperous Europeans tend not to purchase a car merely to get from point A to point B, shoes to keep their feet dry, a watch just to tell the time, or a bottle of water only to quench their thirst. We buy things that mean something more to us than what we use them for.
The intangible characteristics that make a product more than simply useful are what differentiate expensive products from cheap products, and include design, brand name, and environmental friendliness. We may also be willing to pay more for products that are manufactured at home, in a safe workplace, without child labor, etc. These characteristics are intimately linked to the values and morals – to the general culture – prevailing in the market.
Companies apparently recognize this. According to the popular business writer Daniel Pink, giving meaning or sense to a product or a service is increasingly becoming the main source of added value. This is all the more true as Asian universities turn out vast numbers of engineers and other knowledge workers who are just as qualified as their European colleagues, and as brilliant in technical design as they are in optimizing the manufacturing process.
Adding value in this non-functional sense is a quintessentially European strength. It is at least as much an art as it is a science, and it goes beyond technical and business innovation. World-class design and brands already have a foothold in Europe, where creative industries are stronger that the car industry. There are good reasons for that.
Europe gave the world Hippocrates, da Vinci, Voltaire, Beethoven, Florence Nightingale, Dostoyevski, Nobel, John Lennon, and many others who have shaped world culture. Today, Europe is defending the moral high ground when it comes to values such as human rights, peaceful conflict resolution, social welfare, and care for the environment. Far from being actual or potential obstacles to material success, it is precisely such values that should be celebrated and actively projected into Europe’s economy.
Embedding Europe’s cultural and ethical background in goods and services that reflect these values would not only set the European economy apart from the rest of the world, but would also strengthen these values globally. Perhaps the most urgent example is Europe’s moral leadership on climate change, which, supported through policies such as the Lisbon Strategy, should be translated into technical leadership and early entry into lucrative markets for low-carbon products.
The “soft power” of goods and services reflects the cultural environment that creative individuals require for their work and growth. In addition, such goods and services require properly cultivated consumers. As the urban studies theorist Richard Florida has argued, it is technology and tolerance that attract talents. Europe should therefore become a magnet for creative people from all over the world and should, based on its rich cultural heritage, raise its own.
Creating meaning and preserving values is probably the one task that Europe has to undertake on behalf of the entire world. If the EU focuses on infusing its goods and services with Europe’s guiding ideas and values, its economy will reap significant rewards. This will require an explicit emphasis on ensuring the conditions that promote and sustain creativity, and the updated Lisbon Strategy that is to be launched in March should include a commitment that Europe will move in this direction.
Žiga Turk is Minister for Growth and National Lisbon Strategy Coordinator in Slovenia, which currently holds the EU’s rotating presidency.
Copyright: Project Syndicate, 2008.
www.project-syndicate.org
