The Lisbon Agenda and the Relocation of Economic Activities Abroad: Services and the Labour Market THE LISBON AGENDA AND THE RELOCATION OF ECONOMIC ACTIVITIES ABROAD: SERVICES AND THE LABOUR MARKET Neven Mimica Parliament of the Republic of Croatia Zagreb SUMMARY 1 The article approaches the Lisbon Strategy by viewing it as a tool for addressing economic hardships produced by relocation of economic activities. The rising incidence of relocation of resources abroad by production and service companies- often from more developed countries to countries with a more favourable cost structure in Central, Eastern and South-Eastern Europe- has become a major political issue especially in Western Europe, and notably in countries with high unemployment. Relocation may however, at least temporarily, lead to considerable individual and social hardship and suffering. It is therefore essential to properly assist those affected by this process. In this regard, policies to promote and encourage employability have shown themselves to be more efficient than those serving merely to protect employment. The answer should be to engage in bold structural reform in all sectors including labour, products, services and education, so as to increase competition and thereby competitiveness and put countries in a position to attract foreign investment and become as much recipients as“senders” of relocation. The social and economic consequences of relocation are to be brought in a close connection with the Lisbon Agenda. Success in implementing the Lisbon goals seems to be crucial for addressing and rectifying the negative impacts of relocation on outsourcing economies. More jobs and more growth, if achieved 1. The article is based on my paper“Relocation of economic activities abroad and European economic development” prepared as a report to the Parliamentary Assembly of the Council of Europe. 149