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Europe Trails The US In Productivity

EUROPE TRAILS THE US IN PRODUCTIVITY • Europeans work on average, 5 weeks less than people in the United States • In 1995-2005, manufacturing drove 37% of productivity growth in the EU-15 • Per capita GDP is 24% lower in the E.U. than the U.S. • Productivity in 2009 is lower in the U.E. than the U.S. • Labor market participation by 55-64 year-olds is 37% in Italy compared to 65% in the U.S. • 70% of Europe's 1995-2005 productivity growth gap with the U.S. is from local services. • In 1995-2005, manufacturing drove 37% of productivity growth in the EU-15 Productivity: Europe Vs. The United States of America Labor productivity in Europe was growing rapidly for 25 years and approaching that of the U.S., but has fallen off considerably over the last 15 years. United States 100% 95% 90% 85% 80% Europe* 75% 70% 65% 1970 1975 1980 1985 1990 1995 2000 2005 2010 "European Productivity as a Percent of United States Compound Annual Growth Rate United States Europe 1970-80 Per capita GDP in Europe also trails behind the U.S. at 1980-90 an average of $11,250. The total GDP gap is an estimated $4.5 trillion. 1990-2000 However, Europe has made more progress in GDP growth than the U.S. between 2000 2000-2010 and 2008. .5% 1.5% 2% 2.5% Here's Why Europe Is Behind On average, Europeans work less hours than Americans. Average hours worked per capita in 2008: Average hours worked per capita in 2008: Americans work on average 180 hours more than Europeans. 733 913 Annual Hours Worked Per Employee |United States Europe 2,100 2,000 1,900 1,800 1,700 1,600 1,500 1,400 1,300 1970 1975 1980 1985 1990 1995 2000 2005 2009 On average, Europeans worked five weeks less than Americans in 2007. Senior and Female Participation in The European Labor Force Lag Behind The U.S. Senior Paticipation Rate (Ages 54-64) I Holidays And Vacations Other Absences 1 year (52 Weeks) 65% +9%* 46 Total Weeks 41 Total Worked Weeks 51% +10%* Worked * % Change since 1990 Paticipation Rate of Females Part-Time in the Labor Force 88% 81% The European Service Sector Is Weak ......* European manufacturing and utilities have remained on par with the United States, and account for 60 percent of total productivity growth. However, the growth in the European local services sector, which includes retail, wholesale, hotels and restaurants, private and other community services, and rental, still lag behind the U.S. considerably. Compound Annual Growth Rate (1995-2005) I Market Services Primary Resources / Manufacturing / Utilities IOther ..................... . GDP Growth Rate Productivity Growth 2.9% 2.0% . ....... .. .......... . 2.1% 1.3% 1% 2% 3% 4% 1% 2% 3% 4% The U.S. Spends More On Innovation And Has a More Developed Entrepreneurial Mindset Spending on Research And Development as a % of GDP (2007) Comparison of Entrepreneurial Mindset as % of the Adult Population I Industry Financed Government Financed Other Description 4% Adult Population 58% 66% 2.7% 3% Interested in Entrepeneurship 20% 22% 1.9% 2% Intentions to 47% 55% start a business 1% Actively committing resources to 2.8% 4.9% start a business Owning and managing a new business 2.6% 3.1% (Less than 3.5 Years) How Can Europe bounce back and compete with the U.S.? 1. Labor Market Reforms: 2. Service Sector Reforms: 3. Innovation Growth Reforms: • Boost participation of older workers • Reduce structural unemployment • Reduce regulation in the service sectors in order to open up competition • Re-prioritizing funds and allocate them in news ways to increase R&D • Boost productivity and efficiency by wisely regulating retail products, land, and labor markets and construction and innovation • Reduce unemployment of • Develop larger-scale clusters • Improve the general link between academia and business young workers • Balance the mix of part-time and • Increase growth by providing crucial enablers like standards, education, and infrastructure in the business services, full-time work for women in order to increase the average totals • Foster a more entrepreneurial mind-set tourism and telecommunications • Ensure a European scale across national borders Source: Mckinsey | US Department of Labor | Wikipedia FOCUS

Europe Trails The US In Productivity

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The population of Europe eclipses that of the U.S. by two and a half times, yet their overall productivity still trails the U.S. In this infographic, designed for Focus.com, we explore some of the rea...

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