The G8 Summit that will take place in the United States May 19-20, 2012 will likely exhibit the same urgency that has attended other recent G8 and G20 meetings. Slow growth, high unemployment, foreign debt concerns, financial disarray, and mounting social unrest mean that the global economy will once again take center stage at the upcoming G8 meeting. Although a global depression may have been averted, recession in Europe and a further global slowdown are likely. Recovery remains uncertain and protracted at best. The situation has left leaders groping for a “desperate optimism,” as Christine Lagarde, managing director of the International Monetary Fund, recently described it. Leaders of developed economies, struggling with their own high levels of sovereign debt, are unlikely to generate new approaches to current problems without the help of others. Emerging economies like China and Brazil - which have remained relatively immune to the ongoing crisis and may hold the key to a more stable future - are themselves put at risk by adverse conditions and are not yet in a position to drive solutions. The 2012 G8 Summit, along with Mexico City’s G20 Summit that will follow only weeks later in June 2012, are poised to serve as a crucial juncture in the unfolding global economic crisis, one that either begins to chart a new path toward stability, or one that fails to produce the mechanisms needed to avert future turmoil. In advance of the G8 Summit, The Chicago Council on Global Affairs, in partnership with the Federal Reserve Bank of Chicago, the Center for Macroeconomics at Northwestern University, the Initiative on Global Markets at the University of Chicago’s Booth School of Business, the Kellogg School of Management and Indian Council for Research on International Economic Relations (ICRIER), the Chinese National School of Development (CCER), the European Bruegel Institute, the Japan Economic Foundation, the Brazilian Fundação Getulio Vargas, and the Mexican Center for Research and Teaching in Economics (CIDE) will host in Chicago a two-day international conference in early May 2012 on “Searching for Strategies to Restore Global Economic Stability and Growth." The conference will bring together senior policy practitioners, business leaders, academics, and thought leaders from select G8 and G20 countries to address key challenges confronting the global political economy including: sustained financial turmoil, renewed recessionary fears, persistent macro-imbalances, continued popular protest over damaged social compacts, and rising political populism. The conference will produce a summary report that will be released around the G8 Summit to help inform conversations at the Summit and the June 2012 G20 meeting to be held in Mexico City.
The revival in US productivity growth since the mid-1990s is linked to a surge in investment in information and communication technologies (ICT). Against the backdrop of a weakening link between productivity and traditional innovation inputs (e.g. R&D expenditure), digitization has spurred productivity through innovations in management techniques, business models, work processes and human resource practices. More fundamentally, digitization is changing the way innovation itself is done, opening the prospect of a long-term increase in the overall rate of innovation. Over time, this will dwarf the benefits from any particular innovation. Digitization is transforming innovation in four ways:
This Finance Focus Breakfast discussed the economic impact of venture capital investment in Europe. The presentation by Massimo Colombo was followed by comments by Karen Wilson and an open discussion moderated by Reinhilde Veugelers.
This session of the Finance Focus Breakfast series was devoted to venture capital (VC) funds and their economic role in the EU. It was focused on the presentation and discussion of results from a large EU-funded research endeavor (VICO project), including the impact of VC funding on firm growth performance and the importance of VC investments from the view point of the innovation policy community as well as from the financial markets’ perspective.
The meeting was organised in two sessions. One was institutional and looked at the new performance-oriented EU cohesion policy, its rationale and previous experiences with impact assessment. The other one aimed to assess the growth effects of EU cohesion policy with an eye at the different methodologies that have been used to measure them.
Across ministries, businesses, think tanks, universities, newspapers and blogs, the world is busy trying to analyse the implications of a changing international economic order, triggered by the rise of emerging Asia in general, and of China in particular. What will this reallocation in the distribution of financial power from the traditional players to the new powers mean for the developed world? Mark Thirlwell, Director of the International Economy program at the Lowy Institute, Australia’s leading international policy think tank, will describe how Australia’s recent experience provides an interesting case study of life in China’s economic orbit. Last year, more than one in every four dollars Australia earned in exports came from sales to China, and the country is by far the single biggest recipient of Chinese non-financial investment. Economic engagement with China has helped transform Australia’s economic fortunes and contributed to turning the country into one of the world’s best performing developed economies. But it has also forced policymakers to grapple with a series of challenges, ranging from setting policies to deal with Chinese investment through adapting to significant structural change on to juggling the complex three-way relationship between Canberra’s traditional security ally in Washington and its new economic partner in Beijing.
At this event the report by Rhodium Group’s Daniel H. Rosen and Thilo Hanemann on Chinese investment in Europe will be presented. Opening remarks will be given by EU Commissioner for Trade Karel de Gucht. This will be followed by a presentation of the report’s findings from Daniel H. Rosen and Thilo Hanemann. A distinguished panel of experts and practitioners, including Bruegel Senior Fellow André Sapir and Frank Xu, will discuss the state of Chinese investment and the implications of the study. Europe is waking up to the both the promise and potential impacts of Chinese investment: $10 billion in direct investment in 2011 alone practically doubled China’s presence in the EU. European leaders, industry and civil society are not sure what to make of these figures. Is Europe doing well or poorly in attracting attention from China? Are these new Asian competitors simply recognising the attractions of Europe as a marketplace, or exploiting a fire sale? Can current policy and regulatory frameworks accommodate the rise of China as major investor? The study to be presented at this event will help answer these questions.
