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Towards a new growth model in CESEE: Convergence and competitiveness through smart, green and inclusive investment

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  • Gereben, Áron
  • Wruuck, Patricia

Abstract

This paper focuses on the growth and convergence of Central, Eastern and South-Eastern European EU countries (CESEE). We argue that the factors behind the pre-crisis growth model of the region - skilled yet affordable labour force, foreign direct investment, imports of productivity-enhancing technology - are petering out, and are yet to be substituted. We propose a new growth model centred around a shift towards more home-grown innovation, digitalisation, climate change mitigation and a strong focus on skills, labour and social inclusion to leave the middle income trap behind for good and to boost economies' growth prospects in a post-COVID world. Based on analysis of firm-level data, we highlight the prerequisites of making this transition happen.

Suggested Citation

  • Gereben, Áron & Wruuck, Patricia, 2021. "Towards a new growth model in CESEE: Convergence and competitiveness through smart, green and inclusive investment," EIB Working Papers 2021/01, European Investment Bank (EIB).
    • Handle: RePEc:zbw:eibwps:202101
    DOI: 10.2867/1421
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    climate change; convergence; economic policy; digitalisation; innovation; labourmarket; long-term growth; productivity; skills;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • P27 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Performance and Prospects
    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment

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