Competitive systems: Discover how digitalisation of manufacturing increases labour productivity - Paper
report
Economies of the Netherlands and the EU face a confluence of pressing challenges. Emissions need to be reduced, and geopolitical developments urge action to build more resilient and autonomous economic systems, while demanding consumers require higher output within shorter timeframes. These challenges require economies to be highly productive to stay competitive. Yet, the active labour population is shrinking (Draghi, 2024) and labour productivity growth continues to decrease (Figure 1),1 posing a significant constraint on one of the most vital resources. 1 With decreasing fertility rates and increasing life expectancy, about 22% of the global population will be over 60 years old by 2050. 2 Draghi (2024) highlighted also a widening innovation gap, particularly in Europe. Factors include risk-averse mindsets, strict regulations, and a brain drain, with Europe lagging in GDP growth behind the US. The regulatory maze in the EU, for example in AI adoption, further hampers innovation, which risks economic stagnation and discourage investment. Competitiveness in this context is a systemic attribute, deeply rooted in the institutional, regulatory, and structural foundations of an economy to support long-term earning capacity in the Netherlands and EU. It goes beyond individual firm performance or cost efficiency, reflecting the capacity of a society as a whole to support productivity, innovation, and sustainable development over time. Draghi (2024) emphasized that enhancing competitiveness is more than reducing costs or improving market efficiency; it is fundamentally about strengthening the underlying systems that enable innovation, investment, and strategic autonomy.
TNO Identifier
1015535
Publisher
TNO Vector
Collation
13 p.
Place of publication
Den Haag