Authors Iain Begg | Gabriel Glöckler | Anke Hassel ... - The Europaeum

average job tenure figures in the EU) with universal income protection. If
applied to countries with an underdeveloped vocational training system,
such policies would lose their “security” dimension and lead to social (and
budget) un-sustainability. 23 If applied to CMEs, where high productivity
depends also on labour protection from dismissal, such policies could
also have the unintended consequence of triggering incentives to pursue
cost-cutting strategies in lieu of a quality-competition strategy in mature
industrial sectors leading to output and employment losses. The flexicurity
experiment could dampen productivity and comparative advantage in
sectors characterised by incremental innovation, without generating
alternative sources of competitiveness.
Upon closer inspection, however, there is little evidence to suggest that
Danish labour-market practices are being transferred lock, stock and
barrel to other EU member states. For example, Germany has reached
increased flexicurity within its economy by flexibilising marginal jobs,
mostly concentrated in the non-traded service sectors, and retaining
protection at the core. A dual labour market might have detrimental
effects on income distribution, 24 but it seems that this form of flexicurity
can develop within a CME-type production regime.
The Lisbon Strategy’s promotion of flexicurity reforms appears to be
promising for a number of related reasons. First, it is an interesting
attempt to unite the economic and social strands of economic reform.
Second, it resonates with a deeply rooted conception of the European
social model as a framework where a well-functioning market economy is
combined with a high degree of social protection. Third, it illustrates the
potential of the “openness” of the Lisbon Strategy in its capacity to foster
policy solutions that coexist with country-specific models of capitalism,
and divergent societal preferences (such as preferences for more or less
leisure time, and differentiated rates of labour market participation
among social cohorts).
An overly general innovation policy
While mainstreaming flexicurity provides a positive example of the EU’s
ability to address socio-economic concerns, a counter-example comes
from EU strategy for innovation. In September 2006, following the 2005
re-launch of the Lisbon treaty, the Commission issued a communication
on “Putting knowledge into practice: A broad-based innovation strategy
for the EU” in order to identifying EU-wide programmes to reach higher
innovation rates. For example, the Commission argues that potential for
innovation must be fostered by the intervention of public authorities. In
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After the crisis: A new socio-economic settlement for the EU