services sector
In the previous sections we have presented data on the exports of the Dutch ICT sector to the United States. These data gave insight into the absolute performance of the ICT goods and services sector in terms of total exports and exports to the United states. The main shortcoming of these data are that no correction is made for the size of the sector. For example, a sector exporting 200.000 euro ‘performed less’ than a sector exporting 300.000 euro even though the latter might be five times as large in terms of total sales than the former. Figure 4.16 present data from the “Productiestatistieken” from Statistics Netherlands. It shows the exports of sectors to the United States, measured on a 3-digit level, relative to total sales as well as the exports of these 3-digit level sectors to the United States (relative to total exports of those sectors). Before interpreting these figures an important caveat is in order. First, these data are based on a possible non-representative sample of companies within each sector. This may (seriously) bias
the results as the data are likely to be representative of the larger companies in any given sector only.28
Figure 4.16 shows that the sector ‘Office accounting and computing machinery’ (30) exports 80% of all its sales. This figure is however flattered by the fact that most of the exports within this sector are in fact re-exports of computers. A number of other sector are exporting about half of their total sales. These sectors are: ‘Insulated wire and cable’ (313), ‘Electronic valves and tubes and other electronic components’ (321), ‘Television and radio transmitters and apparatus for line telephony and line
24 Unaffiliated services only. Affiliated Dutch exports in the category “royalties and license fees” are 1479/31=4771%
of unaffiliated Dutch exports in the same category.
25 Unaffiliated services only. Affiliated Dutch exports in the category “royalties and license fees” are 1479/31=4771%
of unaffiliated Dutch exports in the same category.
26 Unaffiliated services only. Affiliated worldwide exports to the United States in the category “computer and
information services” are 164% of unaffiliated worldwide exports to the United States.
27 Unaffiliated services only. Affiliated worldwide exports to the United States in the category “computer and
information services” are 164% of unaffiliated worldwide exports to the United States.
28 The “productiestatistieken” of Statistics Netherlands do not have information on the smaller companies (with less
than 50 employees) within each given sector. To give an impression about the volume of sales actually measured within the “productiestatistieken” the following example is illustrative. On the basis of the “productiestatistieken” total sales of the ICT sector equaled 3.9 billion euro in 2001. According to CBS (2004) total sales of the ICT sector where equal to 14.6 billion euro in that year. This represents a difference of 275%! For value added these figures are comparable.
THE DUTCH ICT SECTOR IN PERSPECTIVE 27
telegraphy’ (322) and ‘Instruments and appliances for measuring, checking, testing, navigating and other purpose except industrial process equipment’ (332). Sector 333, ‘Industrial process equipment’, is lagging behind with only 29% of sales exported. The service sectors are exporting a much smaller percentage of total sales at respectively. Exports are 3% for the ‘Telecommunications sector’ (6420) and 10% for the ‘Computer and related activities sector’ (72). The main picture emerging from the export as a percentage of sales data is that the ICT service sector is exporting far less than the ICT goods sector. An (partial) explanation for this result might be that export is by nature much more difficult for the service sector as the labor intensity of services is relatively high. If the export of services requires the proximity of labor, one would necessarily expect that exports would be lower the further away the importing country. Figure 4.16: Relative exports of 3- digit level sectors29
0% 25% 50% 75% 100% 30 313 321 322 332 333 332+333 6420 72
Exports as % of own sales Exports to the USA as a % of total own exports
Source: based on Productiestatistieken, Statistics Netherlands.
Figure 4.16 also gives insight in the exports (as a percentage of total exports) going to the United States. From the figure it is immediately clear that this percentage differs widely between sectors. Sector 321, ‘Electronic valves and tubes and other electronic components’, exports just over 50% to the United
States, whereas sector 313, ‘Insulated wire and cable’ exports only 9% of its exports to the United States.30
The other ICT goods sectors are in between these figures. The two service sectors are exporting respectively 37% (telecommunications) and 22% (computer and related activities) of their exports to the United States. These high shares are remarkable, as they seem to indicate that the proximity of labor is not an issue in this respect. This may mean that there could be room to increase exports to other countries beside the United States. Alternatively, there may be other (unknown) factors responsible for explaining this difference.
Summarizing, the data allow for the following conclusions. First, exports in the ICT goods sector are much larger than exports in the ICT services sector. Second, the industrial process sector (333) exports
29 For the sector 332 and 333 only combined data on exports to the United States are available.
30 The fact that sector 30 (office, accounting and computing machinery) is lagging behind is caused by the fact that
28 CHAPTER 4
SEO ECONOMIC RESEARCH
‘only’ 29% of total sales. Third, there is a wide difference in the percentage of exports going to the United States (measured) as a percentage of total exports. In particular, the sectors 313 (‘Insulated wire and cable’) and 332+333 (‘Instruments and appliances for measuring, checking, testing, navigating and other purpose except industrial process equipment’ and ‘Industrial process equipment’) are lagging behind. Fourth, exports of computer and related activities (72) are lagging behind exports of the telecommunications sector (6420).