Report of the Director - General; Growth, structural change and manpower policy the challenge of the 1980s

In January 1974 the Second European Regional Conference looked back at a quarter century of unprecedented growth and it discussed the social issues arising from the profound and rapid transformation that growth had brought about in Europe itself and in its relationships with the rest of the world. The few years that have elapsed since then marked the beginning of a new era.
Three developments in the economic field have been particularly important and constitute much of the background to this Report. The first is a slowing down of economic growth. Second, substantial changes are occurring on the economic map of the world, as a result of accelerated growth and industrialisation in a number of developing countries, even though slow growth or stagnation continue to prevail in many others. The third development, which in the short and medium term is likely to affect the world economic system even more drastically, is the new energy situation, which has already caused huge shifts in international monetary flows and in the distribution of economic power, and which has created uncertainty over the adequacy of future oil supplies for maintaining desirable growth rates all over the world.
The prospects are that, even if oil does not become a bottleneck, for several years to come growth will be at lower rates than those which for a generation we had almost come to take for granted. In the western European countries, those with market or, rather, "mixed" economies, the average during the 1960s and early 1970s was of the order of 5 per cent; more recently it has been below 3, and it appears to be declining towards 2 per cent. The effects of some factors that had accounted for the exceptionally high earlier rates have petered out: postwar reconstruction, the catching up with United States' technology, and the phenomenal increase in international trade generated by the formation of the Common Market and by a worldwide liberalisation of trade during the 1960s.