Policy Strategies for Economic Development in the Knowledge Society: Contribution from the New Member States Carine Dartiguepeyrou Idate Conference on ICTs and Enlargement Montpellier, 24 November 2004

Problematic Diversity is valuable. The question is how to transform diversity into competitiveness?

Lessons Learned Stable macroeconomic policy, incentives, and regulatory environment are important Successful and early transition from planned economies to market economies, high adult literacy, cultural proximity and relatively rapid IT penetration were key to attract FDI But more important is a country's capacity to adapt to change (market, process)

Ensure Human Resources Moving towards a knowledge-based society implies an attitude towards change and a focus on human capital and skills development not only infrastructure and infostructure (services and applications)

Taking Responsibility Capacity to define and implement objectives (policies and instruments) consistently and throughout a period of important changes is key

Cultural Matters Geographic proximity is important although less so than cultural and sociological factors (adaptability, flexibility, language skills, values and risk taking)

NMS’ challenge Developing creativity, knowledge workers, knowledge-based work, innovation, and attracting venture capital will be essential Becoming the most competitive knowledge- based economies will require that CEECs develop their creativity and lead their own development CEECs will have to move from actors to leaders of change

EU’s challenge Impulse, vision, ambition at the EU-25 level is essential to reach a certain level of convergence National and regional development strategies tend to better reflect cultural diversity New member states are likely to adopt very different development paths

Engagement Three major challenges facing the Knowledge-based Europe: Economic Political Cultural

An Economic Challenge Europe is facing a change dilemma: will it continue to give priority to agriculture and industries in difficulty, or will it really move towards a new economic model and a KE? EU and national budgets are good indicators of change. They could reflect new priorities of economic and social policy as addressed in the Lisbon agenda New development strategies need to be designed and implemented

A Political Challenge Managing 3 dynamics in parallel: integration of new members, the EU modernisation, and the globalisation requiring new forms of multilateral governance Reform of the Council governance is the most serious issue

A Cultural Challenge Change management skills and experience will be required Creativity is a pre-requisite to a knowledge- based society Trust and confidence are not only a basis for exchange and communication; they represent the necessary grounds of an environment where innovation and progress can develop

Diversity Like other EU members, new member states are more or less well prepared towards a KE They have adopted different types of development policies In that context, new candidate countries are likely to reinforce diversity in public governance

Division The EU is to face key differences between countries already engaged in a pro-active ICT that are likely to favour specific technology trajectories, others defending a more balanced or traditional economy

Waves' Transformation Each new wave transforms the previous one; ex. the industrial wave partly industrialised agriculture, informational wave partly computerised industry and agriculture ICTs can leverage all 3 waves and contribute to new sectors of excellence (ex.Beaujolais, Swatch…)

3 Possible Strategies Transform the previous waves of development (agricultural, industrial) into key competitive sectors using ICTs Leading the "third" wave (informational) through vanguard high tech Develop a global presence in the 3 waves of development (agricultural, industrial, informational)

Harmony The question whether public governance in favour of specific technology trajectories is useful But more important is how the EU will harmonise the diversified development paths in order to transform this diversity into competitiveness?

Sharing This implies that development strategies effectively are developed by EU members and that sharing and benchmarking of these strategies are conducted

Concluding Remarks NMS add up to the EU complexity and diversity Countries like Estonia, Slovenia and Hungary are the best prepared among CEECs to move towards the KE 2 visions of the Lisbon strategy: one pro-ICT, knowledge-based and future orientated; the other, more balanced but less knowledge- orientated