Lisbon Agenda Research Articles

From universalism to selectivism: the ideational turn of the anti-poverty policies in Finland

In the universalistic Nordic welfare states, targeted anti-poverty policies have not been considered as specific aims of social policy. The situation has, however, altered in Finland and there is now a new element in Finnish social policy that can be called ‘anti-poverty policy’. This article explores when, how and why the policy paradigm relating to poverty changed in Finland. It includes an empirical analysis of the documents produced by key actors. Analyses show that the basic idea behind the policy prescriptions for alleviating poverty in Finland has changed from the idea of universalism to the idea of selectivism. The results emphasise that the Church, non-governmental organisations, the European Union’s Lisbon agenda as well as an active opposition politics had an important agenda-setting role behind the ideational turn from universalism to the idea of selectivism.

Tokyo-Brussels Partnership: Security, Development and Knowledge-based Society (review)

Reviewed by: Tokyo-Brussels Partnership: Security, Development and Knowledge-based Society Dimitri Vanoverbeke (bio) Tokyo-Brussels Partnership: Security, Development and Knowledge-based Society. Edited by Takako Ueta and Éric Remacle. Peter Lang, Brussels, 2008. 315 pages. $58.95, paper. This volume is a collection of selected papers from the eighth and ninth Japan-EU Cooperation Conferences. These annual conferences focus on the relationship between these two strategic partners and their wider regions without any restriction on topics or approaches. Beyond their methodological and disciplinary diversity, the conferences and their subsequent publications are noteworthy because they bring together high-level policymakers as well as leading academic specialists on Europe and Japan. Both Europe and Japan face an imperative need to reposition themselves on the rapidly shifting world scene. They increasingly look toward each other to play a prominent role in a newly multipolar world. This volume attempts in particular to cover those issues raised in the Lisbon Agenda that are relevant to the partnership between Japan and Europe, yet for obvious space-related reasons it could only focus on some of them. As the Lisbon Agenda's life span comes to a close, and the time for its critical assessment and renewal draws near, the publication of this book seems timely—in spite of the fact it was published four to five years after the conferences were held. The challenges that prompted the Lisbon Agenda in Europe remain valid today and must be addressed efficiently in the near future. Rather than covering [End Page 479] the relationship between Japan and Europe, the authors of the majority of the chapters analyze issues from the Japanese or European perspective and suggest possible elements of convergence in the future between the two regions. As such, this publication is a faithful reflection of the ambiguous relationship that has emerged between these two so-called "unconventional powers." With the conclusion of the 2001 Action Plan, a decade of intensified cooperation was launched between the European Union and Japan. However, the partnership's evolution has often been criticized as being more "plan" than "action." Nevertheless, as illustrated throughout the book, possible fields for common action remain plentiful. Most chapters of this book are symptomatic of the state of the art in comparative European-Japanese studies. Characterized by its disciplinary openness, the product of the Japan-EU conferences reflects the complex, uneven, and at times contradictory components of the EU-Japan dialogue. This book brings together and confronts a variety of disparate contributions that delve into different academic traditions, all of which have been engaged in analysis of the multifaceted Euro-Japanese relationship. Roughly three ongoing scientific dialogues on Euro-Japanese, and a fortiori Euro-Asian, affairs are reflected throughout the publication: an exercise in comparative area studies articulated through the specific exemplary contribution of the EU's regional experience; comparative analyses of the international political economies and socioeconomic regulatory frameworks on both sides; and issue-specific foreign policy analyses. Those chapters engaged with the comparative area studies effort offer a coherent vision of elements of convergence as well as divergence between the European and Asian experiences. The socioeconomic studies assess the relative merits of various policy options and seek to foster mutual learning dynamics, whereas the foreign policy contributions have squarely focused on the capacities and expectations associated with the EU-Japan partnership. Accordingly, this book offers timely contributions to these various dialogues while tentatively suggesting through its bridging effort a future interdisciplinary research agenda. Both the opening and closing contributions by Ambassador Takekazu Kawamura highlight possible avenues of Euro-Japanese cooperation. Economic reform and demographic changes are rightly pointed out as the issues most suited to the context of the partnership. The first two chapters in this book open with the conclusion of the Lisbon European Council stating that the European Union should strive to become "the most competitive and dynamic knowledge-based economy in the world, capable of providing a sustainable economic growth, a better and greater social cohesion" (p. 53). Both Japan and Europe are trying to increase their economic competitiveness through issues such as "acceleration of accessibility and the improvement in the affordability of knowledge" (p. 25). [End Page 480] Issues like those...

WHY DO SOME COUNTRIES UNDERTAKE STRUCTURAL REFORMS WHEN OTHERS DO NOT?

It is widely accepted that structural, institutional and labour market reforms are essential for the development of the OECD and emerging market economies; and that argument has been incorporated into official policy in the EU as part of the Lisbon agenda. Yet there is little analysis in the economics literature of how these reforms should work, or of which reforms would be most effective. Similarly, there is no explanation of why policy makers extol the virtues of reform, but often fail to carry them out. Or why some countries embrace reform, but others in similar circumstances do not. To explain these differences we develop a general equilibrium model with imperfect competition, extended to include labour market imperfections and tax distortions. We find that fiscal constraints to be the principal reason that reforms do not get undertaken, though labour market regulation can be a serious complicating factor in certain cases. As a result, the reduction of tax distortions, rather than market or institutional reform, is usually the most effective type of reform. The implication is that we need models that combine different reform instruments and different distortions to analyse this kind of problem.

New business formation in a rapidly growing economy: the Irish experience

The extraordinary growth of the Irish economy since the mid-1990s—the ‘Celtic Tiger’—has attracted a great deal of interest, commentary and research. Indeed, many countries look to Ireland as an economic development role model, and it has been suggested that Ireland might provide key lessons for other EU members as they seek to achieve the objectives set out in the Lisbon Agenda. Much of the discussion of Ireland’s growth has focused on its possible triggers: the long-term consequences of the late 1980s fiscal stabilisation, EU structural funds, education, wage moderation and devaluation of the Irish punt. The industrial policy perspective has highlighted the importance of inflows of foreign direct investment, but a notable absence from the discourse on the ‘Celtic Tiger’ has been any mention of the role of new business venture creation and entrepreneurship. In this paper we use unpublished Irish VAT data for the years 1988–2004 to provide the first detailed look at national trends in business birth and death rates in Ireland over the ‘take-off’ period. We also use sub-national VAT data to shed light on spatial trends in new venture creation. Our overall conclusions are that new business formation made no detectable contribution to the acceleration of Ireland’s growth in the late 1990s, although we do find evidence of spatial convergence in per capita business stocks.

Public administrations and SEPA: A win–win situation

The Single Euro Payments Area (SEPA) initiative from the European banking sector is designed to take the European Union internal market and monetary union to a next stage. It is strongly politically motivated by the European Council and the European Commission, as a means of contributing to the Lisbon agenda and increasing the overall competitiveness of the European economy. From a political point of view, it may thus be expected that the public sector will act as a launching customer of the new SEPA payment services. Whereas in the Netherlands the central government has shown its SEPA initiatives and is well advanced in its SEPA preparations, local and regional public bodies have not yet shown themselves as front runners. Local administrations have stated that they are orienting on SEPA, but are looking at SEPA in terms of a business case and the propositions of banks. Given the considerable cost savings that could be realised in the future SEPA area in terms of increased efficiency and servicing, public administration should have an argument to accelerate the SEPA migration process. But a marriage between banks and the public sector has to come from both sides. Banks should therefore act as the payments service facilitator, delivering the required and attractive business propositions at the public sector’s request. By doing so, they can create a catalyst for making SEPA a success for all stakeholders.

How Can the EU Emulate the Positive Features of the East Asian Model?

The spectacular, sustained economic growth experienced in several East Asian countries leads to the question what Europe can learn from the East Asian economic model. Three advantages of the East Asian model stand out: small social transfers, low taxation and free labor markets. The superiority of such policies is now widely accepted, and the question is how they can be emulated by Europe. Traditionally, the EU has taken a top-down approach to decision making and policy implementation, which is characteristic of the Lisbon Agenda, which has not made much progress. However, after the powers of the European Commission have been weakened in the last few years competition between national governments has spurred swift tax cuts and faster deregulation of labor markets. Bottom-up reforms arising from competition should be more readily accepted in the EU.

Investing in Health: A Contribution to the Achievement of the Lisbon Agenda

In the Lisbon Agenda, the European Union’s member States have committed themselves to invest in becoming the most competitive economy in the world. In this paper we review the evidence on whether investment in health should be part of this process. Concentrating on microeconomic studies, we show how better health can increase productivity and labour supply. In addition, there is an indirect positive effect through the investment that healthy people make their own education. Governments pursuing sustainable economic growth – broadly defined – should include the health of their population along with education and physical infrastructure in a balanced investment strategy.

Subsidy Policy for Innovation: A Way to Reach Objectives of Both Higher Growth and Equity?

Since the Lisbon Agenda (2000), the European Union policies are in- creasingly oriented towards innovation as attested to by the deep change of the new Regional Policy. This paper proposes an analysis of an innovation subsidy policy in an agglomeration and growth model a la Martin and Ottaviano (1999). In this two-regions model, we assume that the policy is implemented by a central authority that taxes the profit of industrial firms to subsidy employment in innovative activities. We show that the positive effects on growth and equity of such a policy, as highlighted by Martin (1999), hold in the case where the policy is not geographically differentiated. In the case where the government however grants larger subsidies to the poorer region in order to reduce the concentration of the innovative sector, we show that the policy can be inefficient if it is not of sufficient magnitude.

The Career of the Open Method of Coordination: Lessons from a ‘Soft’ EU Instrument

This article examines the career of the Open Method of Coordination (OMC) as a policy instrument. Looking at the European Employment Strategy and the Lisbon Agenda, it shows that more has been accomplished than is often realised. It argues that the OMC's apparent fragility reflects an intrinsic tension, termed here the ‘soft-law dilemma’: it must ensure a constant supply of items to feed the EU agenda, whilst at the same time guaranteeing a level of institutional stability sufficient to allow effective policy delivery. To maintain both legitimacy and effectiveness, the OMC has learned to navigate between the extremes of all-out policy activism and bureaucratisation. As a result, the OMC has become an established form of socio-economic governance at EU level. A decade later, EU actors have the resources to take action in areas long associated with national sovereignty, thereby widening the scope and potential for a politicisation of the EU.

COMPETITIVENESS OF NATIONS IN THE GLOBAL ECONOMY. IS EUROPE INTERNATIONALLY COMPETITIVE

The Lisbon Agenda from 2000 aims to make the European Union the most competitive economy in the world in 2010. This paper discusses the concept of international competitiveness of nations. While journalists and politicians believe that it is important for a country to be competitive, economist have often a different opinion. The World Economic Forum (WEF) presents two indices: the Global Competitiveness Index (GCI) and the Business Competitiveness Index (BCI). While Europe and the EU on average seem to be not very competitive, several of the European countries are internationally highly ranked. For the WEF a consequence of competitiveness is high standard of living. The paper shows that several of the European countries belong to the ones with the highest living standard in the world. In the sample, 40 European and 4 non-european countries are included. Finally, it could be shown that the correlation coefficients between the rankings of GCI, BCI and living standards are high and positive.

The Future of the European Union: A Critical Trade Union View

This paper offers a radical critique of the current framework of economic policy within the European Union and its negative effect on social cohesion. It defends the aspirations of the “Social Europe” model but suggests this model is now withering on the vine, not least because employers and governments no longer support it and have withdrawn from genuine social partnership. The paper asserts that the undemocratic nature of European policy making institutions is a fundamental bloc to progressive reform of the EU, and criticises the economic philosophy inherent in the Lisbon Agenda and recent controversial European Court of Justice decisions that have expanded that agenda. Lastly, it sketches some alternatives to this direction of travel, drawn from successful models within and outside Europe.

New actors within the European Employment strategy (EES): the presence of the legislative power and trade unions in a coexistent dialogue in Luxembourg (2005-2008)

The appropriation of the Lisbon agenda 2010 by the legislative power and its participation in the elaboration of the National Reform Programmes (NRP) of 2005 and 2008 go hand in hand with an increasing parliamentary involvement in EU dossiers. In the context of the Lisbon treaty, this involvement will potentially increase. As regards the debates that have surrounded the Lisbon Strategy, it is shown that Luxembourg’s House of Representatives brought together both representatives from the government and the legislative power with the civil society to generate a debate on the future reforms to be put forward. Considering the panoply of actors involved, it is further argued that the resulting dialogue does coexist with more traditional and institutionalized instruments of dialogue that have embodied the consensus-seeking “Luxembourg social model”.

What we don't know can, and will, hurt us

There is an old saying (at least in English) that what you don't know can't hurt you. In science it is the reverse. So how much are we thinking about the deep unknowns in the life sciences, compared with gathering data? The European Commission set the tone for research with its launch of the “Information Society,” and proclamation (made in 2000 and known as the “Lisbon Agenda”) to make Europe the world-leading knowledge-based economy by 2010. With the rapid technological advances in molecular biology (particularly genome sequencing), some of this knowledge was practically in the bag, so it seemed. It was a “known” entity with predictable growth prospects. Thinking about what we already know, and know how to do, enables us to build on knowledge in an evolutionary, incremental, sense. Thinking about what we don't know, and don't know how to do, on the other hand, raises the truly fascinating questions in biology that are likely to culminate in revolutions in understanding. But at a more practical level, carefully thinking about what we don't know can help us make the right decision as to which data to gather, how to interpret them, and which other advances we need to support this endeavor. It is not necessarily easy to get the concept across these days, because large sectors of the life sciences are concerned with massive data collecting and interpretation projects. It might very well have been more implicitly understood 50 years ago, for instance, when we had but a fraction of the biological data to ponder that we do today. How to sequence (this has been known, in principle, for a very long time) How to decode the sequence (this has also been known for a very long time) But the ambitious aim of understanding the data needed to be matched by ambitious thinking about the unknowns. What we did not know was how to embed the knowledge of the sequence into the model of gene interactions as complex networks with phenotypic outputs that tend to be unpredictable. However, network biology as a discipline had been around for quite some time already. Now we tend to call it systems biology, and systems biology has been a defined discipline for probably more than 40 years: Mihajlo Mesarovic defined it as a research field in 1966 with an international symposium “Systems Theory and Biology” (though Ludwig von Bertalanffy's book “General Systems Theory in Physics and Biology” was published in 1950). Concerted funding for systems biology only really started in the late 1990s. If discovery of information advances faster than the rate at which we are developing the means to understand that information, it is inevitable that we will start misunderstanding it, and – even worse – misapplying it. A hackneyed example is the concept that the human genome sequence would give us the “genes for X, Y, Z”. Unfortunately, this worked against a positive trend in perception that individual genes were not determinants of phenotype.

Application of the SEA Directive to EU structural funds: Perspectives on effectiveness

The European Union (EU) has two potentially conflicting policy goals: the Lisbon Agenda and the Cardiff process which, respectively, aim to make the EU most competitive and dynamic knowledge-based economy in the world, and integrate the environment into all EU policies. This research uses two case studies of Operational Programmes drawing on EU structural funds. Such programmes have recently been made subject to Strategic Environmental Assessment (SEA) under the EU SEA Directive, and allowed an assessment of the substantive (does it achieve its goals) and transactive (is it cost efficient) effectiveness of the SEA process, (i.e. does it support the Cardiff process or the Lisbon agenda?). Documentary review and interviews were the primary method drawing on actors involved both in the two case studies, and within the EU. The results indicate that transactive and substantive effectiveness are intrinsically linked and that both cases demonstrated some substantive effectiveness, but only one was transactively effective. Effectiveness was judged to be a function of design, procedure, substance as well as transaction, influenced by political issues. As with other research, we find that perspectives of effectiveness are very much driven by individual expectations, suggesting that a true measure of effectiveness might be the extent to which SEA can change expectations.

Perspectives for the Lisbon Strategy: How to Increase the Competitiveness of the European Economy?

The main message of this contribution is that lean times are here to stay for the old member states. The principal reasons are deep seated: Deteriorating demographics continue with the ratio of working age population to total population falling. There are thus fewer and fewer producers for every consumer and recipient of transfers. On top of this, productivity growth is declining as labour quality is falling and investment growth is slowing. In the new member countries the demographic trends are also unfavourable, but they are (more than) compensated for by catch-up growth as a relatively well educated work force finds its place in the internal market. What does this diagnosis imply for the role of structural policies? No Lisbon agenda can change demographic trends, nor can it change the declining capital/labour ratio due to insufficient investment growth. But structural reforms might counteract the impact of these two negative trends. Moreover, the performance gap between big and small member countries suggests that policy can make a difference. Daniel Gros is Director of the Centre for European Policy Studies, Brussels. This paper was first presented at a conference on Europe after the Enlargement, organised by CASE (Centre for Social and Economic Research), in Warsaw, 8 April 2005.

Decent work: indexing European working conditions and imposing workplace tax

This article indexes working conditions using data from the Fourth European Working Conditions Survey 2005 for three purposes. (1) Benchmarking countries and social groups. This reveals poor qualification and career opportunities, and modest incomes. Atypical workers have less advantageous working conditions than those in permanent full-time jobs. This shows that Europe is still far from creating ‘better jobs’ as advocated in the Lisbon agenda. (2) Analysing the flexicurity concept as proposed by the European Commission. Our study disproves the assertion that European workers are less interested in remaining with the same employer but need more flexibility combined with ‘upward mobility’ and lifelong learning. Moreover, Europe has a shortage of training possibilities and workers demonstrate latent resistance to learning. The basis for the Commission's promotion of flexicurity would thus seem questionable. (3) Proposal of a workplace tax for bad working conditions. As with ‘green taxes’, the workplace tax would encourage employers to improve working conditions. Indexing individual working conditions with reference to a checklist, as developed in the article, could be a prototype for measuring ‘social pollution’ to determine the amount of workplace tax.

Total Factor Productivity, Intangible Assets and Spatial Dependence in the European Regions

Dettori B., Marrocu E. and Paci R. Total factor productivity, intangible assets and spatial dependence in the European regions, Regional Studies. The aim of this paper is to analyse the determinants of the efficiency levels across the European regions. Firstly, a regression-based measure of regional total factor productivity is derived by estimating a spatial Cobb–Douglas production function. Secondly, the role played by intangible factors (human capital, social capital and technological capital) on total factor productivity levels is investigated by applying the spatial two-stage least-squares (2SLS) method and the spatial heteroskedasticy and correlation consistent (SHAC) estimator to account for both heteroskedasticity and spatial autocorrelation. It turns out that a large part of total factor productivity differences across the European regions is explained by disparities in the endowments of these intangible assets. Dettori B., Marrocu E. and Paci R. 欧洲地区总要素生产力、无形资产以及空间依赖，区域研究。本文旨在分析欧洲区域决定其效率等级的不同要素。首先，通过估测空间生产职能本研究对区域总要素生产力进行了基于回归的测量。其次，通过应用空间两阶段最小二乘算法 （2SLS）以及考虑了异方差以及空间自相关的SHAC估算，研究考察了无形要素（人力资本、社会资本以及技术资本）对于总要素生产力水平的影响。 总要素生产力 人力资本 社会资本 技术 欧洲 Dettori B., Marrocu E. et Paci R. La productivité des facteurs de production globaux, les immobilisations incorporelles et la dépendance géographique dans les régions européennes, Regional Studies. Cet article cherche à analyser les déterminants des niveaux d'efficacité à travers les régions européennes. Primo, on établit une mesure de la productivité des facteurs de production globaux basée sur la régression en estimant une fonction de production géographique du type Cobb–Douglas. Secundo, on examine le rôle joué par les immobilisations incorporelles (à savoir, le capital humain, le capital social et le capital technologique) sur les niveaux de la productivité des facteurs de production globaux en appliquant la méthode géographique des moindres carrés à deux degrés (appelée 2SLS) et l'estimation SHAC pour tenir compte à la fois de l'hétéroscédasticité et de l'autocorrélation géographique. Il s'avère qu'une part non-négligeable des écarts de la productivité des facteurs de production globaux à travers les régions européennes s'explique par des disparités de la dotation de ces immobilisations incorporelles. Productivité des facteurs de production globaux Capital humain Capital social Technologie Europe Dettori B., Marrocu E. und Paci R. Gesamtfaktorproduktivität, immaterielle Vermögenswerte und räumliche Abhängigkeit in den europäischen Regionen, Regional Studies. In diesem Beitrag werden die Determinanten des Effizienzniveaus in verschiedenen europäischen Regionen analysiert. Zu Beginn wird ein regressionsbasierter Maßstab der regionalen Gesamtfaktorproduktivität durch Schätzung einer räumlichen Cobb–Douglas-Produktionsfunktion abgeleitet. Anschließend wird die Rolle von immateriellen Faktoren (Humankapital, Sozialkapital und technologisches Kapital) für das Niveau der Gesamtfaktorproduktivität untersucht, indem die Methoden der räumlichen zweistufigen Kleinstquadrat-Schätzung (2SLS) und des SHAC-Schätzers angewandt werden, um sowohl die Heteroskedastizität als auch die räumliche Autokorrelation zu berücksichtigen. Es stellt sich heraus, dass sich ein Großteil der Unterschiede bei der Gesamtfaktorproduktivität in den verschiedenen europäischen Regionen auf Disparitäten hinsichtlich der Ausstattung mit diesen immateriellen Vermögenswerten zurückführen lässt. Gesamtfaktorproduktivität Humankapital Sozialkapital Technologie Europa Dettori B., Marrocu E. y Paci R. Productividad total de factores, activos intangibles y dependencia espacial en las regiones europeas, Regional Studies. El objetivo de este artículo es analizar los determinantes de los niveles de eficacia en las regiones europeas. En primer lugar, derivamos una medición basada en la regresión de la productividad total de los factores regionales al calcular una función espacial de producción Cobb–Douglas. En segundo lugar, analizamos el papel desempeñado por los factores intangibles (capital humano, capital social y capital tecnológico) sobre los niveles de productividad total de los factores aplicando el método espacial de mínimos cuadrados en dos etapas (2SLS) y el estimador SHAC para tener en cuenta la heteroscedasticidad y la autocorrelación espacial. Parece ser que una gran parte de las diferencias en la productividad total de los factores en la regiones europeas se explica por las desigualdades en las dotaciones de estos activos intangibles. Productividad total de los factores Capital humano Capital social Tecnología Europa

Pitfalls in Estimating the Returns to Corporate R&D Using Accounting Data

Does RD have an impact on firm growth, profits, and value? To most observers, the obvious answer is yes. However, the recent report by Booz-Allen-Hamilton (BAH 2006) seems to conclude that the share of spending devoted to research has no relationship to the economic performance of an enterprise, and offers support to the view that it is possible to compete successfully in the modern economy without investing in RD This issue is an important one because the large corporations they considered are responsible for the vast majority of private RD spending in developed economies, and are therefore important actors in achieving the Lisbon agenda. Challenged by the results and recommendations of the BAH report, in this paper we assess some of the pitfalls to be avoided in using accounting data to estimate corporate RD returns and illustrate a proper use of such data. We first offer a critique of important aspects of the methodology and of some of the main conclusions in the BAH report. Using similar data and a comparable approach, we then present our own estimates of the impact of RD on the growth, profitability, and market value of public corporations, and contrast our interpretations and conclusions with that of the report.

European Lifelong Learning Educational Policy in the Light of the “Lisbon Agenda”: The Greek Case

Investment in human capital emerged as core priority for European Union (EU) policies at the Lisbon European Council of 23 and 24 March 2000, shifting the perspective as regards the correlation between economic and social capital, and providing for strategic goals in order to strengthen employment, economic reform and social cohesion. Hence, novel priorities have emerged for Greek educational policy, accrediting exceptional significance to lifelong learning so as to raise compatibility with the “knowledge based society” mandates. The present paper attempts a policy impact analysis through thorough review of Greek education and training policies undertaken to respond to the European challenges. In the light of the evolving Lisbon agenda, it takes account of the legal context and underlying principles of Greek educational policy with respect to lifelong learning, to draw upon the impact of an EU convergence policy activating educational initiatives and objectives to attain sustainable growth development.

Liberalization of EU telecommunications and trade: theory, gravity equation analysis and policy implications

The liberalization of telecommunications has contributed to considerable price reductions in international telephony and to rising volumes of telecommunications. This raises the issue of the economic impact of international telephony. Falling international information and transaction costs should stimulate competition and enlarge the market radius for producers in the tradables sector—this lets us to expect trade creation effects of international telecommunications; this in turn should raise output provided that more intensive international telecommunications stimulates international diffusion of knowledge or brings about trade-related specialization gains. Based on a modified gravity equation which is taking into account the role of international telecommunication volumes—based on new ITU data—we show that international telephony has a significant positive impact on trade volume: A rise of the international telecommunications volume by 10% raises trade by 2% in Europe. At the same time the coefficients of the traditional variables, GDP in the exporting and the importing country, are smaller than in traditional approaches. Thus from a policy perspective the modernization and growth of the international telecommunications network—within a system of enhanced competition—is crucial for Europe: economic integration will be reinforced. From this perspective the Lisbon Agenda is right to emphasize the importance of creating a digitally networked knowledge society.