Economists Congress Groningen 2007: Gearing up for growth

On October 5th 2007, the eighteenth annual 'Economists Congress Groningen' (ECG) will take place in the Municipal Theatre of Groningen. As in previous years, approximately 600 students, alumni, university employees and participants from the business community will attend the congress. The title of this year's conference will be: Gearing up for growth. This year the participants will have a close look into the development in the field of investment over the last couple of years.

Gearing up for growth
It is a corner stone of classical economic theory that growth is caused by production factor accumulation. However, only a small part of the actual economic growth can be explained by this phenomenon. The contribution of new ways of investment and innovative financing to growth should be taken into account.

Development on the financial market
Private equity and hedge funds have played a leading part in the economic news over the past few years. An increasing amount of money has been raised by venture capitalists. Notwithstanding its popularity among some investors, these financing techniques also provoke much scepticism.

Development in direct investment
For some time globalization has made investing in foreign markets possible for developed countries, but until the beginning of this century emerging countries investing in western countries were rarely seen. The question is whether this is a threat to the autonomy of western companies or simply a beneficial capital impulse in a liberalised world-economy.

Human capital
The battle for talent among companies is fierce, labour mobility is increasing, and the west can no longer compete with cheap labour. To meet the increasing demand for high skilled labour large investments should be made in education. Governments have a lot to say about planning to become the most competitive economy in the world.

Developing countries
Due to the invention of micro credit a solution seems to be found for one of the most persisting problems of the post colonial age: poverty. However, as the past has shown us, credit facility is not the only problem in developing countries and therefore it is probably not the only solution either. Education and the improvement of the (financial) institutions are essential in fighting poverty.

Finally
The pace in the development in investment is high; it is not clear what the tendency will be for the next ten years. Every country, every region and every industry will face different challenges in the economic future. However, one thing is clear: the investment policy chosen will largely affect the balance of power in the current century.