Regionalisation of value chains and of the organisation of production: Higher long-term growth is the only solution for the euro zone

When value chains and the organisation of production are global, investment and production can take place in a low-growth region and then be export ed for sale in other regions with higher growth. But the return to regional value chains and a regional organisation of production is putting an end to this strategy: investment and production take place in a region for that region’s market only, and it is regions with high long-term growth that attract investors. This means that if the euro zone wants to attract investment and jobs while its potential growth is very low, it will have to lift its long-term growth. This will require increased uptake of new technologies by companies, more innovation, an increase in labour force skills, efficient public investment and a dynamic immigration policy.