ISBN 92-894-6418-6
9 789289 464185
NB-55-03-883-EN-C
EU sectoral competitiveness indicators
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P u bl ic at io n s fo r sa le p ro d u ce d by th e O ffi ce fo r O ffi ci al P u bl ic at io n s of th e Eu ro p ea n C om m u n it ie s ar e av ai lab le fr om ou r sa le s a ge n ts t h rou gh ou t t h e w or ld . H ow d o I s et a b ou t o bt a in in g a p u bl ica ti on ? O n ce y ou h av e o bt ai n ed t h e l is t o f s al es a ge n ts, c on ta ct t h e s al es a ge n t o f y ou r c h oi ce a n d p la ce y ou r o rd er . H ow d o I o bt a in t h e l is t o f s a le s a ge n ts ? • G o t o t h e P u bl ic at io n s O ffi ce w eb si te h tt p :/ /p u bl ic at io n s. eu .i n t/ • O r a pp ly f or a p ap er c op y b y f ax ( 35 2 ) 2 92 9 4 27 58EU sectoral competitiveness indicators
A p oc ke tb oo k p re p ar ed by the E nt er p ri se a nd I nd us tr y D ir ec to rat e-G en er al U ni t B 2 ‘C om p et it iv en es s a nd e co no m ic r ef or m s’ Eu ro p ea n C om m is si onEur
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A g re at d ea l o f a d d it io n al i n fo rm at io n o n t h e E u ro p ea n U n io n i s a va il ab le o n t h e I n te rn et . It c an b e a cc es se d t h rou gh t h e E u ro p a s er ve r ( h tt p :/ /e u ro p a. eu .i n t) . C at al og u in g d at a c an b e f ou n d a t t h e e n d o f t h is p u bl ic at io n . Lu xe m b ou rg : O ffi ce f or O ffi ci al P u bl ic at io n s o f t h e E u ro p ea n C om m u n it ie s, 2 0 05 IS B N 9 2 -8 94 -6 41 8 -6 © E u ro p ea n C om m u n it ie s, 2 0 05 R ep ro d u ct io n i s a u th or is ed p ro vi d ed t h e s ou rc e i s a ck n ow le d ge d . P ri nt ed i n I ta ly P R IN T E D ON W H IT E C H LO R IN E -FR E E PA PE REU sectoral competitiveness indicators 3
Contents
C h a p te r I : I n tr o d u cti o n ... ... ... 5 C h a p te r I I: S u m m a ry o f th e c h a p te rs o f th e p o ck etb o o k ... ... 9 II. 1. In tr od uc ti on ... ... ... 9 II. 2. In d us tr ia l s tr uc tu re ... ... ... 1 0 II. 3. In d us tr ia l i nt er re lat io ns ... ... ... 1 1 II. 4. G ro w th a nd p ro d uc ti vi ty ... ... ... 1 2 II. 5. Ex te rn al t ra d e p er fo rm an ce ... ... ... 1 3 C h a p te r I II : S ec to ra l s tr u ct u re ... ... ... 1 5 III .1 . In tr od uc ti on ... ... ... 1 5 III .2 . D is tr ib ut io n o f v al ue a d d ed a nd e m p lo ym en t: s ec to rs a nd l ab ou r s ki lls ... ... 1 5 III .3 . Ec on om ic a ct iv it y b y s iz e o f e nt er p ri se s ... ... 1 6 III .4 . C ap it al i nt en si ty ... ... ... 20 III .5 . Sp ec ia lis at io n o f c ou nt ri es ... ... ... 2 2 III .6 . C on cl ud in g r em ar ks ... ... ... 2 5 III .7 . A nn ex es ... ... ... 2 6 C h a p te r I V : I n d u str ia l i n te rr el ati o n s a n d c o m p eti ti ve n ess : A n i n p u t-o u tp u t a p p ro a ch ... 3 3 IV .1 . In tr od uc ti on ... ... ... 3 3 IV .2 . Th e s tr uc tu re o f t he e co no m y: a s ix -b ra nc h i np ut -o ut p ut t ab le ... ... 3 4 IV .3 . Th e r ol e o f I C T i n t he p ro d uc ti on p ro ce ss ... ... 4 8 IV .4 . H um an c ap it al : l ab ou r s ki lls -b as ed i np ut -o ut p ut t ab le s... ... 5 6 IV .5 . O th er i np ut -o ut p ut i nd ic at or s ... ... ... 6 3 IV .6 . C on cl ud in g r em ar ks ... ... ... 7 6 IV .7 . A nn ex ... ... ... 7 7EU sectoral competitiveness indicators 4 C h a p te r V : G ro w th a n d p ro d u cti vi ty ... ... 7 9 V. 1. In tr od uc ti on ... ... ... 7 9 V. 2. G ro w th a nd l ab ou r p ro d uc ti vi ty i n E U -1 5 ... ... 7 9 V. 3. G ro w th a nd l ab ou r p ro d uc ti vi ty : a d is ag g re g at ed p er sp ec ti ve ... ... 8 3 V. 4. Pr ofi ta b ili ty ... ... ... 9 2 V. 5. C on cl ud in g r em ar ks ... ... ... 9 9 V. 6. A nn ex es ... ... ... 10 0 C h a p te r V I: E x te rn a l tr a d e ... ... ... 1 05 V I.1 . In tr od uc ti on ... ... ... 10 5 V I.2 . W or ld t ra d e s tr uc tu re ... ... ... 10 5 V I.3 . EU -1 5 s ec to ra l p er fo rm an ce a nd r ev ea le d c om p ar at iv e a d va nt ag e ... ... 10 7 V I.4 . In tr a-in d us tr y t ra d e ( IIT )... ... ... 11 2 V I.5 . La b ou r s ki lls a nd t ec hn ol og y... ... ... 11 7 V I.6 . C on cl ud in g r em ar ks ... ... ... 12 5 V I.7 . A nn ex es ... ... ... 12 8
Chapter I: Introduction
T h e p ro d u ct io n of EU se ct or al co m pe ti ti ve ne ss in di ca to rs i s a re sp on se to th e in cr ea si n g in te re st in an al ys in g th e co m -p et it iv en es s of th e EU ec on om y fr om a se ct or al p er sp ec ti ve. T h is ap p ro ac h p ro vi d es in si gh t in to th e p er fo rm an ce of ea ch in d u st ry an d co n tr ib u te s to ex p la in in g th e co m p et i-ti ve n es s o f t h e E U e co n om y a t l ar ge. T h e p u rp o se of th is p u bl ic at io n is la rg el y p ed ag og ic al . O n e ob je ct iv e is to p re se n t in a si n gl e p u bl ic at io n , d at a an d in d i-ca to rs th at ca n b e ea si ly ac ce ss ib le an d su ffi ci en tl y co m p re -h en si ve to p ro vi d e an sw er s — al b ei t, in so m e ca se s, in co m -p le te — to q ue st io n s ab ou t th e fa ct or s th at im p in ge u p on va ri ou s as p ec ts of th e p er fo rm an ce of th e EU in d u st ri es . B et -te r kn ow le d ge of th e u n d er ly in g d at a an d of th e fu n d am en -ta l ec on om ic re la ti on sh ip s sh ou ld , on e h op es, p ro vi d e th e gr ou n d s f or b et te r p ol ic ie s. T h e ch oi ce of in d ic at or s an d in d u st ri es is th e re su lt of a se l-ec ti on co n st ra in ed p ri n ci p al ly by d at a av ai lab il it y. A p o ck -et b o ok sh ou ld in fa ct b e se le ct iv e an d th e li st of in d ic at or s ou gh t to b e p ar si m on iou s. C le ar ly , t h er e is a la rg e n u m b er of in d ic at or s th at ca n , i n p ri n ci p le , b e d ev el op ed to ch ar ac te r-is e th e p er fo rm an ce of ea ch in d u st ry an d su ch an ap p ro ac h is in d ee d fo ll ow ed in ot h er p u bl ic at io n s ( 1). W h at d is ti n -gu is h es th is p o ck et b o ok is th e se le ct io n of th e in d ic at or s, ba se d in p ar t on re ce n t em p ir ic al w or k, an d th ei r re la ti on to se ct or al co m p et it iv en es s. T h e in d ic at or s ar e d efi n ed ov er va ri ab le s th at re fl ec t or d et er m in e se ct or al co m p et it iv en es s. In ev it ab ly , co m p ar is on s w it h th e U n it ed St at es ar e m ad e ac ro ss in d u st ry va ri ab le s to p ro vi d e a b en ch m ar k of th e in -d u st ri al p er fo rm an ce o f t h e E U . T h is p o ck et b o ok co ve rs vi rt u al ly al l p ri n ci p al in d ic at or s th at ca n b e d ev el op ed ac ro ss EU in d u st ri es at th e le ve l o f t h e se ct or al cl as si fi ca ti on ch o se n . T h e ti m e sp an of th e se ri es u se d d ep en d s u p on d at a av ai lab il it y. G iv en th e in te re st of ob se rv in g gr ow th an d co m p et it iv en es s d ev el op m en ts in th e lo n g te rm , th is p u bl ic at io n co ve rs th e lo n ge st p er io d s of ti m e av ai lab le fo r th e in d ic at or s an d sou rc es u se d . T h e ge o -gr ap h ic co ve ra ge is li m it ed , an d th e in fo rm at io n re fe rs to EU -1 5 or to in d iv id u al M em b er St at es an d th e U n it ed St at es, n ot w it h st an d in g th e li m it at io n s im p o se d by th is ch oi ce. In fo rm at io n on cou n tr y p er fo rm an ce on th e ba si s of so m e of th e in d ic at or s u se d in th is p u bl ic at io n ca n b e fou n d in O ’M ah on y a n d v an A rk ( 2 0 03 ) ( 2). ( 1) Se e E u ro st at ( 2 0 0 3 ), Eu ro pe an b us in es s: f ac ts a n d fi gu re s , L u xe m b o u rg . ( 2) Se e M ar y O ’M ah o n y an d B ar t va n A rk (2 0 0 3 ), EU pr od uc ti vi ty an d co m pe ti ti ve n es s: A n in du st ry pe rs pe ct iv e. C an Eu ro pe re su m e th e ca tc hi ng -u p pr oc es s? , E n te rp ri se P u b li ca -ti o n s, E u ro p ea n C o m m is si o n , Lu xe m b o u rg , O ffi ce fo r O ffi ci al P u b li ca ti o n s o f th e E u ro p ea n C o m mu n it ie s.EU sectoral competitiveness indicators
EU sectoral competitiveness indicators 6 T h e in d ic at or s p re se n te d co n ce rn ke y d im en si on s of in d u s-tr ia l p er fo rm an ce a n d t h e r el ev an t c h ar ac te ri st ic s. S om e i n -d ic at or s co n ve y in fo rm at io n p er ti n en t to as p ec ts in tr in si c to in d u st ri al p er fo rm an ce an d co m p et it iv en es s. T h is is, fo r ex -am p le , th e ca se of lab ou r p ro d u ct iv it y, an d u n it lab ou r co st s. O th er in d ic at or s sh ow h ow in d u st ri es ar e p er fo rm in g in th ei r m ar ke t ac ti vi ti es, as fo r ex am p le , m ea su re s of p er -fo rm an ce in in te rn at io n al tr ad e or in d ic at or s of re ve al ed co m p ar at iv e a d va n ta ge. T h e p oc ke tb oo k, in a dd it io n t o thi s in tr od uc ti on , i s or ga ni se d ov er t h e fo llo w in g ch ap te rs . C h ap te r II p re se n ts a s u mm ar y an d th e m ain c on cl u si on s. C h ap te r I II p re se n ts inf or m at io n o n th e in du st ri al s tr uc tu re o f th e EU . I t is w or th m en ti onin g tw o of t h e in d ic at or s pr es en te d in t hi s ch ap te r: fi rs t, a n in dex o f in du st ri al s p ec ia li sa ti on w hi ch r ev ea ls c om pa ra ti ve a dv an ta ge of c ou n tr ie s, lo ca li sa ti on f ac to rs a n d th e p oli cy c h oi ce s, if a n y, th at m ay h av e de te rmin ed t h e pa rt ic u la r in te n si ve p re se n ce (o r ab se n ce ) of a n in du st ry in a g iv en M em be r St at e. F u rt h er -m or e, t h e in dex e n co m pa ss es t h e p os si bl e im pa ct in e ac h co u n tr y of p oli cy m ea su re s ad op te d at E U l ev el a s w ell a s th e st re n gt h s an d w ea kn es se s of c ou n tr ie s de p en d in g up on t h e ch ar ac te ri st ic s of t h e in du st ri es in w hi ch t h ey a re s p ec ia li se d (e .g . se n si ti vi ty t o bu sin es s cy cl es , la bo u r in te n si ty ). T h e se c-on d in d ic at or w or th m en ti onin g is t h e d is tr ib ut io n o f va lu e ad de d by s iz e cl as se s, a n in d ic at or a bo ut t h e or ga ni sa ti on o f th e in du st ry w hi ch in t u rn is in fl ue n ce d by t ec hn ol og ic al a n d ec on omi c fo rc es . D es pi te s om e m et h od ol og ic al limi ta ti on s ( 3), thi s d is tr ib ut io n p ro vi de s in si gh t in to t h e p os si bl e pr es en ce an d im p or ta n ce o f e co n omi es o f s ca le . C h ap te r IV p re se n ts in d ic at or s d er iv ed fr om in p u t-ou tp u t tab le s. M o d er n ec on om ie s ar e ch ar ac te ri se d by co m p le x in -te rr el at io n s b et w ee n in d u st ri es th at n ee d to b e ta ke n in to co n si d er at io n in fo rm u la ti n g p ol ic y m ea su re s. T h e co m -p le x it y of in d u st ri al in te rr el at io n s in cr ea se s w it h th e le ve l o f in d u st ri al is at io n , a n d th e d ev el op m en t of n ew ac ti vi ti es an d p ro d u ct s. O f p ar ti cu la r re le va n ce is th e in te rr el at io n sh ip b et w ee n th e m an u fa ct u ri n g an d th e se rv ic es se ct or s. T h e co n ce rn s ab ou t th e d ec li n in g sh ar e of m an u fa ct u ri n g in va lue ad d ed an d th e in cr ea si n g sh ar e of se rv ic es ca n b e u n -d er st o o d b et te r th rou gh th e u se of in p u t-ou tp u t re la ti on -sh ip s. T h e in d ic at or s p ro vi d e a p ic tu re of th e in d u st ri al st ru ct u re th at go es b ey on d th e co n si d er at io n of ea ch in d u s-tr y s ep ar at el y. C h ap te r V p re se n ts d at a m ea su ri n g in du st ri al gr ow th . G ro w th o f va lu e ad d ed i n c on st an t p ri ce s p ro vi d es i n fo rm a-ti on r el at ed t o in du st ri al d yn am is m , d eg re e of i n du st ri al m at u ri ty , s p ee d o f s tr u ct u ra l c h an ge a n d d ir ec ti on , a n d c om -p et it iv en ess . A lt h ou gh co m p et it iv en ess is a m u lt id im en -si on al c on cep t, p ro du ct iv it y p la ys a c ru ci al r ol e in d et er m in -in g co m p et it iv en ess : in t h is c h ap te r gr ow th r at es o f la b ou r p ro du ct iv it y p er h ou r w or ke d a re p re se n te d . To c h ar ac te ri se se ct or al g ro w th , a cl u st er a n al ys is o f se ct or s is p re se n te d , w h ic h g ro u p s se ct or s ac co rd in g to t h ei r p er fo rm an ce i n o ut -pu t, e m p lo ym en t an d la b ou r p ro du ct iv it y. T h e la st i n d ic at or in t h is c h ap te r is g ro ss o p er at in g ra te . ( 3) R el at ed b as ic al ly to th e fa ct th at th e d is tr ib u ti o n is b as ed o n en te rp ri se s, ra th er th an m o re h o m o ge n eo u s u n it s s u ch a s e st ab li sh m en ts o r k in d -o f-ac ti v it y u n it s.
EU sectoral competitiveness indicators 7 C h ap te r V I is d ev ot ed to m ea su ri n g EU in d u st ri al p er fo rm -an ce in ex te rn al tr ad e. In d u st ri al co m p et it iv en es s is in va ri -ab ly as so ci at ed w it h p er fo rm an ce in in te rn at io n al tr ad e. He re , w or ld tr ad e m at ri ce s, p ro d u ct co m p o si ti on of tr ad e, tr ad e ba la n ce s, in d ex es of re ve al ed co m p ar at iv e ad va n ta ge (R C A ) an d in tr a-in d u st ry tr ad e ac ro ss va ri ou s gr ou p s of cou n tr ie s gr ou p ed ac co rd in g to th ei r in co m e p er ca p it a ar e so m e of th e in d ic at or s ch o se n to m ea su re th e p er fo rm an ce of E U i n d u st ri es i n e xt er n al t ra d e.
EU sectoral competitiveness indicators 9
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T h er e is in cr ea si n g in te re st in an al ys in g th e co m p et it iv en es s of th e ec on om y in ge n er al , a n d of EU -1 5, in p ar ti cu la r, fr om a se ct or al p er sp ec ti ve , re fl ec ti n g th e n ot io n th at th e co m -p et it iv en es s of th e ec on om y at la rg e ca n n ot b e p ro p er ly u n -d er st o o d w it h ou t lo ok in g in to th e p er fo rm an ce of in d iv id u -al se ct or s, an d , w h at is ev en m or e im p or ta n t, at h ow th es e in te rr el at e. In an al ys in g in d iv id u al se ct or s se p ar at el y, p ar ti cu la r at te n -ti on ca n b e p ai d to in d u st ry -s p ec ifi c fa ct or s th at ch ar ac te r-is e th at se ct or in p ar ti cu la r. T h e ap p ro ac h ta ke n in th is p o ck et b o ok is d if fe re n t. It is ba se d on a se t of in d ic at or s, w h ic h ca n b e ap p li ed si m u lt an eou sl y to al l s ec to rs . T h is ap -p ro ac h ai m s at id en ti fy in g th e p er fo rm an ce of ea ch se ct or , re la ti ve to th e re st, an d se ek s to es tab li sh st at is ti ca l r eg u la ri -ti es ac ro ss se ct or s an d M em b er St at es, an d ov er ti m e, w h ic h n ot on ly p ro vi d e in si gh t in to th e co m p et it iv en es s of ea ch se ct or se p ar at el y bu t al so of th e ec on om y as a w h ol e. T h is sh ou ld al so la y th e gr ou n d s fo r fu rt h er ec on om ic an d q u an -ti ta ti ve an al ys is of co m p et it iv en es s-re la te d fa ce ts . C le ar ly , li m it at io n s re la te d to d at a av ai lab il it y es p ec ia ll y at se ct or al le ve l d ic ta te to a co n si d er ab le ex te n t th e co n te n t an d br ea dt h o f t h e p o ck et b o ok .Chapter II: Summar
y of the chapters of the pocketbook
T h e d at a h av e b ee n d ra w n fr om va ri ou s st at is ti ca l sou rc es . Eu ro st at ’s N ew C ro n o s d at ab as e h as p ro vi d ed ve ry u se fu l in fo rm at io n on d is tr ib u ti on of ec on om ic ac ti vi ty by si ze ca te go ri es of en te rp ri se s, in ve st m en t in te n si ty an d gr o ss op -er at in g su rp lu s. In p u t-ou tp u t tab le s h av e b ee n p ro vi d ed by Eu ro st at an d ar e n ow av ai lab le in th e Eu ro st at ’s N ew C ro n o s d at ab as e. D at a on va lue ad d ed , e m p lo ym en t an d lab ou r p ro -d u ct iv it y lo n g-te rm d ev el op m en ts co m e fr om th e st u d y en -ti tl ed EU pr od uc ti vi ty an d co m pe ti ti ve ne ss : A n in du st ry pe rs pe c-ti ve e d it ed by M ar y O ’M ah on y an d B ar t va n A rk ( 4). R ea d er s in te re st ed in d et ai ls of th e d at a u se d ar e re fe rr ed to th at p u b -li ca ti on , an d m or e sp ec ifi ca ll y to C h ap te r V II on m et h o d -ol og y. D at a on ex te rn al tr ad e ar e fr om Eu ro st at ’s C om ex t d at ab as e a n d t h e U n it ed N at io n s C om tr ad e d at ab as e. T h e in d ic at or s p re se n te d in th is p o ck et b o ok co n ce rn ke y as p ec ts of in d u st ri al p er fo rm an ce. So m e in d ic at or s co n ve y es p ec ia ll y p er ti n en t in fo rm at io n ab ou t as p ec ts in tr in si c to co m p et it iv en es s: th is is, fo r ex am p le , th e ca se w it h lab ou r p ro d u ct iv it y an d u n it lab ou r co st s. O th er in d ic at or s sh ow h ow in d u st ri es ar e p er fo rm in g in th ei r m ar ke t ac ti vi ti es, as fo r ex am p le , m ea su re s of p er fo rm an ce in in te rn at io n al tr ad e or in d ic at or s of re ve al ed co m p ar at iv e ad va n ta ge. T h e in d ic a-( 4) Se e f o o tn o te 2 .
EU sectoral competitiveness indicators 10 to rs ar e gr ou p ed in fou r m ai n ch ap te rs : i n d u st ri al st ru ct u re , in d u st ri al in te rr el at io n s, gr ow th an d p ro d u ct iv it y, an d ex -te rn al tr ad e, an d ea ch of th es e ch ap te rs fo cu se s on so m e se -le ct ed is sue s. A br ie f su m m ar y of th e m at er ia l is p re se n te d b el ow .
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T h e fi rs t gr ou p co n si st s of in d ic at or s on th e in d u st ri al st ru c-tu re o f t h e E U . T w o i n d ic at or s a re w or th m en ti on in g h er e. Fi rs t, t h e in d ex o f in du st ri al s p ec ia li sa ti on i s an i n d ex t h at re ve al s co m p ar at iv e ad va n ta ge o f co u n tr ie s, l o ca li sa ti on fa c-to rs , an d t h e p ol ic y ch oi ce s, i f an y, t h at m ay h av e d et er -m in ed t h e in te n si ve p re se n ce ( or a bs en ce ) of a n i n du st ry i n on e sp ec ifi c M em b er S ta te . I n d oi n g so i t h el p s in te rp ret t h e re su lt s ob ta in ed f ro m o th er in d ic at or s, a n d p ar ti cu la rl y fr om th os e on e xt er n al t ra d e p er fo rm an ce . Fu rt h er m or e, t h e in -d ex p oi n ts t o th e p oss ib le i m p ac t in e ac h M em b er S ta te o f p ol ic y m ea su re s ad op te d a t EU l ev el , an d t h e fo rc es a n d w ea kn ess es o f M em b er S ta te s d ep en d in g u p on t h e ch ar ac te r-is ti cs o f th e in du st ri es i n w h ic h t h ey a re s p ec ia li se d ( e. g. se n si ti vi ty t o bu si n ess c yc le s, la b ou r in te n si ty ). T h er e is h ig h va ri at io n i n s p ec ia li sa ti on a cr oss E U -1 5 M em b er S ta te s, a n d so m e ex h ib it h ig h d eg re es o f sp ec ia li sa ti on i n c er ta in i n du s-tr ie s. I n g en er al , t h es e ar e sm al l or m ed iu m -s iz ed c ou n tr ie s, si n ce t h er e is o bv io u sl y a co u n tr y si ze e ff ec t in m ea su ri n g sp ec ia li sa ti on ( 5). T h e m os t ou ts ta n d in g ca se s ar e th os e of Fi n la n d i n t el ec om m u n ic at io n e q u ip m en t an d I re la n d i n o f-fi ce m ac h in er y. H ow ev er , th es e ar e n ot u n iq u e ca se s. D en -m ar k in w at er t ra n sp or t, L u xe m b ou rg i n fi n an ci al i n te rm e-d ia ti on , an d t h e N et h er la n d s in r ad io a n d t el ev is io n r ec ei v-er s al so fa ll i n to t h is c at eg or y. S p ec ia li sa ti on i n d ex es a re lo w er i n b ig c ou n tr ie s si n ce c ou n tr y si ze t en d s to l ow er s p e-ci al is at io n . B ut F ra n ce i n r es ea rc h a n d d ev el op m en t, I ta ly i n te xt il es , th e U n it ed K in gd om i n r ad io a n d t el ev is io n r ec ei v-er s an d o th er in st ru m en ts a re s om e ex am p le s of t h e op p os it e ef fe ct . In G er m an y th e h ig h es t in d ex es c or re sp on d t o ot h er el ec tr ic al m ac h in er y an d m ot or v eh ic le s, b ut in g en er al t h er e is n ot a c le ar s p ec ia li sa ti on p at te rn i n t h is c ou n tr y. A d if fe re n t p er sp ec ti ve is p ro vi d ed by sp ec ia li sa ti on p ro fi le s in te rm s of va ri ou s ca te go ri es of lab ou r sk il ls . M em b er St at es ca n b e p la ce d in th re e gr ou p s. T h e fi rs t in cl u d es cou n tr ie s sp ec ia li se d in h ig h lab ou r sk il ls se ct or s (B el gi u m , Fr an ce , an d Lu xe m b ou rg ) a n d h ig h -i n te rm ed ia te lab ou r sk il ls (D en -m ar k, Fi n la n d , Sw ed en , an d to a le ss er ex te n t th e U n it ed K in gd om ); th e se co n d in cl u d es cou n tr ie s sp ec ia li se d in th e tw o lo w es t ca te go ri es of lab ou r sk il ls : A u st ri a, Sp ai n , G re ec e, It al y an d Po rt u ga l. Fi n al ly , G er m an y, th e N et h er la n d s an d Ir el an d b el on g to a gr ou p th at d o es n ot h av e a cl ea r p ro fi le of sp ec ia li sa ti on , w h ic h im p li es th at th e d is tr ib u ti on of va lue a d d ed i s v er y s im il ar t o t h e o n e o f E U -1 5 a s a w h ol e. T h es e re su lt s ar e ba se d on a ll in du st ri es , a n d, t h er ef or e, in co r-po ra te t h e ef fe ct o f bo th m ar ke t a n d n on -m ar ke t s er vi ce s. T h e ( 5) T h e sp ec ia li sa ti o n in d ex co m p ar es th e in d u st ry st ru ct u re o f o n e co u n tr y w it h th e o n e o f E U -1 5. Si n ce b ig co u n tr ie s d et er m in e la rg el y th e in d u st ry st ru ct u re o f E U -1 5, si gn ifi ca n t d if fe re n ce s b et w ee n b ig co u n tr ie s an d th e E U as a w h o le ca n n o t b e ex -p ec te d , a t l ea st t o t h e e x te n t a s t h o se f o r s m al l a n d i n te rm ed ia te c o u n tr ie s.EU sectoral competitiveness indicators 11 d at a pe rm it t h e si n gl in g ou t of t h e pe rf or m an ce o f t h e m an u -fa ct u ri n g se ct or . T h is i s p ar ti cu la rl y re le va n t fo r th e an al ys is of e xt er n al t ra de . O n t h is b as is , a fi rs t gr ou p of c ou n tr ie s ex -h ib it a m ar ke d spe ci al is at io n i n h ig h l abo u r sk il ls m an u fa c-tu ri n g se ct or s (B el gi u m , Fi n la n d, I re la n d, t h e N et h er la n d s, Fr an ce a n d th e U n it ed K in gd om ). A t th e op po si te e n d ar e co u n tr ie s su ch a s Sp ai n , G re ec e, I ta ly , Lu xe m bo u rg , an d Po r-tu ga l ch ar ac te ri se d by s pe ci al is at io n i n l ow l abo u r sk il ls a c-ti vi ti es . A t h ir d gr ou p is c h ar ac te ri se d by s pe ci al is at io n i n lo w -i n te rm ed ia te la bo u r sk il ls . T h is g ro up c on si st s of A u st ri a, G er m an y an d Sw ed en . D en m ar k oc cu pi es a n i n te rm ed ia te po si ti on s in ce t h is c ou n tr y is s pe ci al is ed i n bo th h ig h a n d lo w -i n te rm ed ia te l abo u r sk il ls . Fi n la n d al so o cc up ie s a si tu a-ti on s im il ar t o D en m ar k’ s al th ou gh i t h as be en i n cl ud ed i n th e fi rs t g ro up be ca u se it s spe ci al is at io n in h ig h la bo u r sk il ls is m uc h h ig h er t h an t h e on e on lo w -i n te rm ed ia te s ki ll s. A n ot h er a spe ct r el ev an t fo r th e an al ys is o f se ct or al pe rf or m -an ce a n d co m pe ti ti ve n es s is t h e or ga n is at io n o f th e in du st ry , m or e spe ci fi ca ll y th e m ar ke t or ga n is at io n a n d th e po ss ib le pr es en ce o f e co n om ie s of s ca le in t h e ope ra ti on o f v ar io u s se c-to rs . D at a on t h e d is tr ib ut io n o f va lu e ad de d by s iz e cl as se s of th e en te rp ri se s, d es pi te s om e m et h od ol og ic al l im it at io n s ( 6), ar e u se fu l h er e. T h is in d ic at or s h ow s in du st ri es w h er e th e la rg -es t p ar t of t h ei r ac ti vi ty i s u n de rt ak en i n l ar ge e n te rp ri se s (w it h m or e th an 1 0 0 0 pe rs on s em pl oy ed ). T o th e ex te n t th at th es e in du st ri es a re c h ar ac te ri se d by e co n om ie s of s ca le , t h ey ca n be n efi t fr om in te rn at io n al t ra de , s in ce t h is g iv es a cc es s to la rg er m ar ke ts , an d ope n s th e po ss ib il it y fo r th es e in du st ri es to a ch ie ve l ow er a ve ra ge c os ts . So m e of t h es e m an u fa ct u ri n g in du st ri es a re t ob ac co , m in er al o il r efi n in g, o ffi ce m ac h in er y, te le co m m u n ic at io n s eq u ip m en t, m ot or v eh ic le s, a n d ai rc ra ft an d sp ac ec ra ft . W it h in s er vi ce s, c on ce n tr at io n i s h ig h i n a ir tr an spo rt a n d co m m u n ic at io n s.
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M o d er n ec on om ie s ar e ch ar ac te ri se d by co m p le x in te rr el a-ti on s b et w ee n in d u st ri es an d th es e m u st b e co n si d er ed in th e an al ys is of co m p et it iv en es s an d in fo rm u la ti n g p ol ic y m ea su re s. T h e co m p le x it y of in d u st ri al in te rr el at io n s in -cr ea se s w it h th e le ve l of in d u st ri al is at io n , an d th e d ev el op -m en t of n ew ac ti vi ti es an d p ro d u ct s. A gr ou p of in d ic at or s d er iv ed fr om in p u t-ou tp u t (I O ) tab le s ta ke s th e d es cr ip ti on of in d u st ri al st ru ct u re b ey on d th e co n si d er at io n of ea ch in -d u st ry s ep ar at el y. Fou r ty p es of ag gr eg at ed IO tab le s ar e u se d . Fi rs t, a tr ad i-ti on al ag gr eg at io n to si x br an ch es sh ow s, am on g ot h er th in gs, th e re la ti on sh ip b et w ee n m an u fa ct u ri n g in d u st ry an d m ar ke t se rv ic es . Se co n d ly , an ag gr eg at io n sh ow in g in -d u st ri al in te rr el at io n s b et w ee n in fo rm at io n an d co m m u n i-ca ti on te ch n ol og ie s (I C T ) ca te go ri es an d th e ro le of IC T in th e p ro d u ct io n p ro ce ss is th e ba si s fo r an ‘I C T by IC T ’ t ab le. T h ir d ly , f or th e ro le of h u m an ca p it al , a ‘l ab ou r sk il ls by la -b ou r sk il ls ’ t ab le h as b ee n cr ea te d . F in al ly , a n IO tab le of 42 ( 6) D u e b as ic al ly to th e fa ct th at th e d is tr ib u ti o n is b as ed o n en te rp ri se s, ra th er th an m o re h o m o ge n eo u s u n it s, su ch as es ta b li sh m en ts o r k in d -o f-ac ti v it y u n it s. In an y ca se , t h e p re va le n ce o f h ig h en te rp ri se s in an in d u st ry w o u ld in d ic at e th e in fl u en ce o f e co n o m ie s o f s ca le i n f u n ct io n s r el at ed t o t h e a ct iv it ie s o f e n te rp ri se s.EU sectoral competitiveness indicators 12 br an ch es p ro vi d es in d ic at or s at th e m o st d et ai le d le ve l. O n e p u rp o se h er e is to h ig h li gh t st yl is ed fa ct s an d to u n d er sc or e th e r ol e o f I C T a n d o f l ab ou r s ki ll s c at eg or ie s. D es pi te t h e h ig h l ev el o f ag gr eg at io n , es pe ci al ly i n t h e si x-br an ch t ab le s, t h e d is cu ss io n h as s in gl ed o ut s om e im po rt an t ch ar ac te ri st ic s th at d es er ve a tt en ti on i n i n du st ri al po li cy r e-fl ec ti on s. F ir st , s up pl ie r-u se r l in ks , a s ca pt u re d by th e in te rm e-d ia te tr an sa ct io n m at ri x of th e IO ta bl e, ar e ca rr ie rs of st re n gt h s an d w ea kn es se s, a n d th er ef or e, p ro m ot er s of , o r ob -st ac le s to , th e co m pe ti ti ve n es s of i n du st ri es . T h e li n ks be -tw ee n m an u fa ct u ri n g in du st ry a n d m ar ke t se rv ic es , an d be -tw ee n v ar io u s IC T a n d la bo u r sk il ls c at eg or ie s, c an be s ee n a s ch an n el s of t ra n sm is si on o f, fo r ex am pl e kn ow le dg e, i n n ov a-ti on , p ro du ct a n d se rv ic es q u al it y, a n d go od ( or b ad ) pr od uc -ti vi ty pe rf or m an ce . T h e d at a re ve al c le ar ly t h e im po rt an ce o f m ar ke t s er vi ce s as s up pl ie rs o f i n p ut s to m an u fa ct u ri n g in du s-tr y. S ec on d ly , ba ck w ar d li n ka ge s, p re se n t in a ll i n du st ri es p u rc h as in g in te rm ed ia te i n p ut s fr om o th er i n du st ri es , ar e ch an n el s of t ra n sm is si on o f g ro w th a n d sh oc ks in a g iv en s ec -to r to t h e re st a n d, m or e spe ci fi ca ll y, t o th os e w it h w h ic h a n in du st ry is s tr on gl y li n ke d . I n du st ri es in r ec es si on (e xp an si on ) tr an sm it t h ei r gr ow th pe rf or m an ce to t h ei r su pp li er s. T h ir d ly , th e d at a sh ow t h e im po rt an ce o f ex te rn al t ra de n ot o n ly a s a ve h ic le t o sa ti sf y co n su m er d em an d (i m po rt ed g oo d s an d se rv ic es t o m ee t fi n al d em an d) , bu t al so a s a w ay t o pr ov id e do m es ti c br an ch es w it h a cc es s to in te rm ed ia te in p ut s. W h il e th e m ai n p ar t of th e d is cu ss io n h as b ee n ca rr ie d ou t on th e ba si s of th e ag gr eg at ed IO tab le s m en ti on ed ab ov e, te ch n ic al co ef fi ci en ts an d ou tp u t m u lt ip li er s h av e b ee n ca l-cu la te d at m or e d is ag gr eg at ed le ve ls (4 2 br an ch es ), an d ar e p re se n te d in Se ct io n IV .5 . T h es e tw o in d ic at or s p ro vi d e tw o m ea su re s of th e re q u ir em en ts, in a p ar ti cu la r se ct or , of in -p u ts fr om ot h er br an ch es of th e ec on om y. T h e fi rs t (t ec h n i-ca l c o ef fi ci en ts ) ta ke s in to ac cou n t al l i n p u ts co n su m ed in a gi ve n br an ch , re ga rd le ss of th ei r ge og ra p h ic al or ig in (d o -m es ti c or im p or te d ), an d re fl ec ts th e te ch n ol og y of se ct or s. T h e se co n d (ou tp u t m u lt ip li er s) , w h ic h ta ke s in to co n si d er a-ti on in p u ts of d om es ti c or ig in on ly , m ea su re s th e to ta l im -p ac t (b ot h d ir ec t an d in d ir ec t) of th e d em an d fo r th e p ro d -u ct s of on e br an ch on th e p ro d u ct io n of th e re st of th e br an ch es of th e ec on om y, an d th er ef or e ca p tu re s th e ef fe ct of th e ex p an si on , o r re gr es si on , o f a gi ve n se ct or , o n th e re st of t h e e co n om y.
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V ar iou s in d ic at or s ar e u se d to il lu st ra te gr ow th an d p ro d u c-ti vi ty o f E U s ec to rs . Fi rs t, d ev el op m en ts in v al u e ad d ed in c ons ta n t pr ic es p ro vi d e in fo rm at io n r el at ed t o in du st ri al d yn am is m , th e d eg re e of in du st ri al m at u ri ty , s p ee d of s tr u ct u ra l c h an ge a n d d ir ec ti on , an d co m p et it iv en es s. G ro w th r at es o f th e n u m be r of p er so ns em pl oy ed a cr os s in du st ri es p ro vi d e a m ea su re o f t h e re al lo ca -ti on p ro ces s of r es ou rc es a m on g se ct or s. F in al ly , al th ou gh co m p et it iv en es s is a m u lt id im ens io n al c on ce p t, l ab ou r pr o -du ct iv it y p er h ou r w or ke d is o n e cr u ci al d et er m in an t.EU sectoral competitiveness indicators 13 Se co n d ly , lab ou r p ro d u ct iv it y gr ow th af fe ct s co m p et it iv e-n es s in d ic at or s su ch as u n it lab ou r co st s d ev el op m en ts as w el l a s d ev el op m en ts in re la ti ve p ri ce s. L ab ou r p ro d u ct iv it y gr ow th in m an u fa ct u ri n g im p ro ve s it s co m p et it iv en es s in in te rn at io n al m ar ke ts an d th is su p er io r p ro d u ct iv it y p er -fo rm an ce of m an u fa ct u ri n g re la ti ve to m ar ke t se rv ic es h as m ad e p o ss ib le a fa vou rab le ev ol u ti on of th e re la ti ve p ri ce s of m an u fa ct u ri n g p ro d u ct s. Su p p ly in g re la ti ve ly ch ea p er in te r-m ed ia te go o d s is on e of th e w ay s th rou gh w h ic h p ro d u ct iv -it y gr ow th in m an u fa ct u ri n g is tr an sm it te d to th e re st of th e ec on om y. T h ir d ly , p ro fi tab il it y is a ke y in d ic at or of co m p et it iv en es s an d su cc es s. T h e gr o ss op er at in g ra te in d ic at or p re se n te d in th is p o ck et b o ok sh ow s su bs ta n ti al va ri at io n ac ro ss se ct or s an d ov er ti m e, w h ic h re fl ec t d if fe re n ce s in m ar ke t st ru ct u re , te ch n ol og y, c yc li ca l p at te rn s a n d s ec to r-sp ec ifi c s h o ck s. A s a w ay to su m m ar is e se ct or al gr ow th in th e EU th e re su lt s of a h ie ra rc h ic al cl u st er an al ys is of se ct or s ar e p re se n te d in C h ap te r V . Fi ve se ct or al gr ow th cl u st er s h av e b ee n id en ti -fi ed , w h ic h ar e ch ar ac te ri se d by th ei r p er fo rm an ce (l ow , i n -te rm ed ia te , o r h ig h ) i n va lue ad d ed , e m p lo ym en t an d lab ou r p ro d u ct iv it y g ro w th i n t h e p er io d 1 97 9 –2 0 01 .
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EU in d u st ri al p er fo rm an ce in ex te rn al tr ad e co n st it u te s co n -ve n ti on al ly u n d er st o o d co m p et it iv en es s, or la ck of . V ar iou s in d ic at or s su ch as w or ld tr ad e m at ri ce s, p ro d u ct co m p o si -ti on of tr ad e, re la ti ve tr ad e ba la n ce s, in d ex es of re ve al ed co m p ar at iv e ad va n ta ge (R C A ) an d re la ti ve tr ad e ba la n ce , a n in tr a-in d u st ry tr ad e (I IT ) in d ex (G ru b el -L lo yd ), an d tr ad e w it h c ou n tr ie s c la ss ifi ed b y i n co m e l ev el a re u se d h er e. Fi rs t, d at a ar e p re se n te d ab ou t th e p la ce of EU -1 5 in th e w or ld tr ad e n et w or k (e xp or ts or ig in at in g in EU -1 5 cou n -tr ie s, in cl u d in g in tr a-EU -1 5 tr ad e, ac cou n t fo r 45 .6 % of to -ta l w or ld ex p or ts ). Se co n d ly , m ea su re s of re ve al ed co m p ar a-ti ve ad va n ta ge (R C A ) of EU -1 5 in d u st ri al se ct or s ar e co n -st ru ct ed . R C A m ea su re s sh ow th at th e fo ll ow in g si x ar e to p p ro d u ct s in EU -1 5 tr ad e p er fo rm an ce : m ec h an ic al en gi n ee r-in g, ch em ic al s, n on -m et al li c m in er al p ro d u ct s, ai rc ra ft an d sp ac ec ra ft, p ri n ti n g an d p u bl is h in g, an d sc ie n ti fi c in st ru -m en ts . A n d , al so ac co rd in g to R C A m ea su re s, th e fo ll ow in g ar e at th e b ot to m of th e ra n ki n g: ra d io an d te le vi si on re ce iv -er s, cl ot h in g, el ec tr on ic va lv es an d tu b es, of fi ce m ac h in er y, w o o d an d p ro d u ct s of w o o d , ra il ro ad an d ot h er tr an sp or t eq u ip m en t, b as ic m et al s, a n d o th er i n st ru m en ts . T h e in co m e le ve l of tr ad e p ar tn er s p la ys an im p or ta n t ro le in d et er m in in g tr ad e p at te rn s, p ar ti cu la rl y II T. In d ic at or s of II T in EU -1 5 tr ad e ar e co n st ru ct ed th at m ea su re II T in te n si ty by p ro d u ct a n d i n co m e l ev el s o f t ra d e p ar tn er s. To ch ar ac te ri se fu rt h er EU -1 5 tr ad e w it h th e re st of th e w or ld , tr ad e fl ow s ar e al so cl as si fi ed ac co rd in g to lab ou r sk il ls an d te ch n ol og y ca te go ri es . T h is is p ar ti cu la rl y im p or -ta n t in tr ad e b et w ee n h ig h -i n co m e cou n tr ie s, bu t it is al soEU sectoral competitiveness indicators 14 im p or ta n t fo r tr ad e fl ow s am on g cou n tr ie s of d if fe re n t le ve ls of d ev el op m en t. T h e d eg re e of II T is si gn ifi ca n t b ec au se it s d et er m in an ts (e. g. ec on om ie s of sc al e an d d em an d fo r va ri et y) ar e d if fe re n t fr om th o se of in te r-in d u st ry tr ad e an d , co n se q ue n tl y, th e p ol ic y co n cl u si on s al so d if fe r. In te r-in d u st ry tr ad e w it h lo w -i n te rm ed ia te in co m e cou n tr ie s ca n b e id en ti fi ed as th e se gm en t of tr ad e, an d of th e in d u st ry , fo r w h ic h th e th re at fr om in te rn at io n al co m p et it io n is h ig h es t. T h es e fl ow s co r-re sp on d to tr ad e ex p la in ed by co m p ar at iv e ad va n ta ge , s u ch as lo w w ag e le ve ls, w h ic h ar e cl ea rl y a ch ar ac te ri st ic of lo w -in te rm ed ia te i n co m e c ou n tr ie s. T h e d at a su gg es t th at EU -1 5 tr ad es p ri m ar il y w it h h ig h -i n -co m e cou n tr ie s an d it is m o st ly II T. Tr ad e w it h lo w -i n te rm e-d ia te in co m e cou n tr ie s ac cou n ts fo r a re la ti ve ly sm al l sh ar e of to ta l t ra d e, an d w h il e EU -1 5 tr ad e w it h h ig h -, u p p er -m e-d iu m , a n d lo w -i n co m e cou n tr ie s co rr es p on d s to th e ge n er al p at te rn th at II T is p o si ti ve ly re la te d to th e le ve l o f in co m e of th e tr ad e p ar tn er s, th e d is ti n ct iv e fe at u re w it h re sp ec t to lo w -i n te rm ed ia te cou n tr ie s is th e co ex is te n ce of II T an d in -te r-in d u st ry tr ad e. In ot h er w or d s, th es e cou n tr ie s p la y a d u al ro le : th ei r tr ad e is ba se d on p ro d u ct s em b o d yi n g lo w lab ou r sk il ls bu t th ey al so ex ch an ge w it h EU -1 5 ot h er ca te -go ri es of m or e so p h is ti ca te d p ro d u ct s an d te ch n ol og ie s, ba se d p re d om in an tl y on st an d ar d is ed te ch n ol og y th at p er -m it s p ro d u ct i m it at io n .
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Chapter III: Sectoral structure
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T h is ch ap te r d es cr ib es th e ba si c ch ar ac te ri st ic s of th e EU -1 5 se ct or al st ru ct u re. T h e in d ic at or s u se d ar e, fi rs t, th e d is tr ib u -ti on of va lue ad d ed an d em p lo ym en t by se ct or an d lab ou r sk il ls ; s ec on d , t h e d is tr ib u ti on of va lue ad d ed by si ze of en -te rp ri se s; th ir d , a n in d ic at or of ca p it al in te n si ty ; a n d fou rt h , an in d ex of se ct or al sp ec ia li sa ti on fo r ea ch M em b er St at e. T h is in fo rm at io n is p er ti n en t fo r in te rp re ti n g th e in d ic at or s p re se n te d in th e re st of th e p o ck et b o ok . A n ot h er ap p ro ac h to se ct or al st ru ct u re ba se d on in p u t-ou tp u t tab le s is d is -cu ss ed i n C h ap te r I V .II
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T h e d is tr ib u ti on of va lue ad d ed in EU -1 5 gr ou p ed ac co rd in g to m ai n se ct or s of ec on om ic ac ti vi ty is p re se n te d in G ra p h II I. 1. A s su st ai n ed p ro d u ct iv it y in cr ea se s in ea ch se ct or h av e m ad e it p o ss ib le to m ee t d em an d w it h le ss re sou rc es, th es e h av e b ee n sh if ti n g fr om ag ri cu lt u re to m an u fa ct u ri n g in -d u st ry an d fr om th is to se rv ic es ac ti vi ti es . A gr ic u lt u re , fi sh -in g an d fo re st ry ac cou n t fo r 1. 7 % of to ta l va lue ad d ed , m an u fa ct u ri n g in d u st ry fo r 21 % an d m ar ke t se rv ic es fo r 48 .1 % . F or co m p ar is on , t h e sh ar e of m an u fa ct u ri n g in d u s-tr y in th e U n it ed St at es is 16 % of to ta l va lue ad d ed an d th e sh ar e o f m ar ke t s er vi ce s 5 2 % . T h e re al lo ca ti on of re sou rc es th at h as ta ke n p la ce ov er th e lo n g ru n is b et te r re fl ec te d in th e d is tr ib u ti on of em p lo y-m en t sh ow n in G ra p h II I. 2 . M ar ke t an d n on -m ar ke t se rv ic es ac cou n t n ow fo r th e d om in an t p ar t of em p lo ym en t in th e EU a n d i n t h e U n it ed S ta te s. G ra p h II I. 3 p re se n ts th e d is tr ib u ti on of va lue ad d ed ac co rd -in g to th e lab ou r sk il ls ta xo n om y ( 7). T h e gr ap h sh ow s th e p re va le n ce of h ig h lab ou r sk il ls in th e U n it ed St at es an d , t o a le ss er ex te n t, in th e EU . H ow ev er , l ow an d lo w -i n te rm ed i-at e sk il ls ar e cl ea rl y p re se n t in b ot h ar ea s an d m or e so in th e EU . ( 7) T h is ta xo n o m y is b as ed o n O ’M ah o n y an d va n A rk (2 0 0 3 ), o p . c it ., fo o tn o te 2 . T h e b as ic se ct o ra l cl as si fi ca ti o n u se d in C h ap te rs II I, V , an d V I is th e o n e u se d b y th es e au th o rs (s ee Ta b le II I. A .2 ), w h ic h is b as ed o n In te rn at io n al St an d ar d In d u st ry C la s-si fi ca ti o n R ev . 3 (I SI C R ev . 3 ). W h er e n ec es sa ry th e d at a o n ec o n o m ic ac ti v it ie s o ri gi n al ly p re se n te d i n N A C E R ev .1 h av e b ee n c o n ve rt ed i n to I SI C R ev .3 .EU sectoral competitiveness indicators 16
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A d is ti n ct iv e ch ar ac te ri st ic of in d u st ri al st ru ct u re co n ce rn s th e d is tr ib u ti on of ec on om ic ac ti vi ty ac co rd in g to th e si ze of th e en te rp ri se s. T h is p ro vi d es a m ea su re of th e d eg re e of co n ce n tr at io n an d of th e sh ar e of la rg e/ sm al l en te rp ri se s in th e e co n om y. G ra ph I II .4 s h ow s th e d is tr ib ut io n o f th e va lu e ad d ed o f ea ch se ct or b y en te rp ris e si ze i n te rv als ( 8). T h er e is h ig h v ar ia ti on ac ro ss in du st ri es . I n n in e se ct or s m or e th an 5 0 % o f t h e va lu e ad d ed is c on ce n tr at ed in t h e la rg es t e n te rp ris es , n am el y th os e em pl oy in g m or e th an 1 0 0 0 p er so ns . S ix o f th es e se ct or s ar e m an u fa ct u ri n g in du st ri es : to ba cc o, m in er al o il r efi n in g, o f-fi ce m ac h in er y, t el ec om m u n ic at io ns e qu ip m en t, m ot or v eh i-cl es , a n d ai rc ra ft a n d sp ac ec ra ft . ( 8) T h es e in te rv al s ar e d efi n ed in te rm s o f th e nu m b er o f p er so n s em p lo ye d in th e en -te rp ri se . D at a in G ra p h II I. 4 ar e fo r 2 0 01 , ex ce p ti n g th e fo ll ow in g se ct o rs , w h ic h re fe r to 2 0 0 0 : s al e an d re p ai r o f m o to r ve h ic le s, w h o le sa le tr ad e, re ta il tr ad e, h o te ls an d ca te ri n g, in la n d tr an sp o rt , w at er tr an sp o rt , a ir tr an sp o rt , s u p p o rt in g tr an sp o rt ac ti v it ie s, co m mu n ic at io n s, re al es ta te ac ti v it ie s, re n ti n g o f m ac h in er y, co m p u te r an d r el at ed a ct iv it ie s, a n d r es ea rc h a n d d ev el o p m en t. Graph III.1: Value added by main sectors (%) — 2001
So ur ce : B as ed o n O ’M ah o n y a n d v an A rk ( 2 0 0 3 ), o p . c it ., f o o tn o te 2 . � �� �� �� �� �� �� � ����� �� �� ��� ����� ��� �� �� ��� ��� ����������� ������� ��������� ���� ������� ������� ������� � �� ������ ���� ���� ������ ����� �� �� � �� ���� ��� �����
EU sectoral competitiveness indicators
17
Graph III.2: Employment by main sectors (%) — 2001
Graph III.3: EU-15 and US value added shares (%) by labour skills taxonomy — 2001
So ur ce : B as ed o n O ’M ah o n y a n d v an A rk ( 2 0 0 3 ), o p . c it ., f o o tn o te 2 . H S = h ig h s k il l; H IS = h ig h -i n te rm ed ia te s k il l; L IS = l ow -i n te rm ed ia te s k il l; L S = l ow sk il l. T h is c la ss ifi ca ti o n a n d t h e d at a a re f ro m O ’M ah o n y a n d v an A rk ( 2 0 0 3 ), o p . c it ., fo o tn o te 2 . � � �� �� �� �� �� �� �� �� �� ����� �� �� ��� ��� �� � �� ��� ����� ��� �� �� ��� ��� ����������� ������� ��������� ���� ������� ������� ������� � �� ������ ���� ���� ������ ����� �� �� � �� ���� ��� ����� � � �� �� �� �� �� �� �� �� �� ����� ��
EU sectoral competitiveness indicators 18 Tw o b el on g to se rv ic es ac ti vi ti es : a ir tr an sp or t an d co m m u -n ic at io n s fo ll ow ed by el ec tr ic it y, ga s an d w at er su p p ly . A co n si d er ab le d eg re e of co n ce n tr at io n is al so fou n d in ch em -ic al s, ba si c m et al s an d el ec tr on ic va lv es an d tu b es, w h ic h re co rd m or e th an 40 % of va lue ad d ed in th e la rg es t en te r-p ri se s. A t th e o th er e x tr em e ar e se ct o rs t h at e x h ib it a v er y lo w le ve l o f co n ce n tr at io n w it h a s ig n ifi ca n t sh ar e o f to ta l va lu e ad d ed p ro d u ce d b y sm al l an d m ed iu m -s iz ed e n te r-p ri se s (S M E s) ( 9). F o r ex am p le , in t h e fo ll ow in g m anu fa c-tu ri n g se ct o rs m o re t h an 7 0 % o f va lu e ad d ed i s o ri gi n at ed in S M E s: t ex ti le s, c lo th in g, l ea th er a n d f o o tw ea r, w o o d an d p ro d u ct s o f w o o d , m et al li c p ro d u ct s an d f u rn it u re an d o th er m anu fa ct u ri n g. A ls o, 7 0 % o f va lu e ad d ed i n co n st ru ct io n o ri gi n at es i n S M E s, a n d a m o n g se rv ic es a c-ti v it ie s, s al e o f m o to r ve h ic le s, w h o le sa le t ra d e, h o te ls a n d ca te ri n g, r ea l es ta te a ct iv it ie s an d r en ti n g o f m ac h in er y al so f al l w it h in t h is g ro u p ( 10). T h e le ve l o f in d u st ri al a gg re ga ti o n p re se n te d i n G rap h I II .4 m as ks s ig n ifi ca n t va ri at io n w it h in s o m e o f th e se ct o rs p re -se n te d . Fo r ex am p le , ru b b er a n d p la st ic s ca n b e su b -d iv -id ed in to r u b b er a n d r u b b er p ro d u ct s, a n d p la st ic p ro d u ct s, an d t h es e tw o s ec to rs e x h ib it c o m p le te ly d if fe re n t d is tr ib u -ti o n s: r u b b er p ro d u ct s is c h ar ac te ri se d b y a h ig h l ev el o f co n ce n tr at io n ( 54 % o f va lu e ad d ed i n e n te rp ri se s w it h m o re t h an 1 0 0 0 p er so n s em p lo ye d ), a n d p la st ic p ro d u ct s, w h er e m o st o f th e ac ti v it y (6 3 % o f va lu e ad d ed ) co rr e-sp o n d s to S M E s ( 11). ( 9) SM E s a re d efi n ed a s e n te rp ri se s w it h 2 50 o r f ew er p er so n s e m p lo ye d . ( 10) T h e u n it s u n d er ly in g th es e d is tr ib u ti o n s ar e en te rp ri se s o r fi rm s. T h e co n ce n tr at io n o f va lu e ad d ed in la rg e en te rp ri se s, ch ar ac te ri st ic o f so m e o f th e se ct o rs , d o es n o t n ec es sa ri ly im p ly th at th es e in d u st ri es o p er at e u n d er ec o n o m ie s o f sc al e in p ro d u c-ti o n si n ce en te rp ri se s, an d m o re p ar ti cu la rl y th e la rg es t o n es , ca n o p er at e se ve ra l sm al l p la n ts . T h e o ri gi n o f ec o n o m ie s o f sc al e ca n b e fo u n d in d if fe re n t fu n ct io n s o f th e en te rp ri se su ch as p ro d u ct io n , m ar ke ti n g, fi n an ci n g, an d R & D . T h e fi rs t is d ir ec tl y li n ke d to th e ac ti v it y ca rr ie d o u t in p la n ts , w h il e th e o th er s ar e m o re li n ke d to th e en te rp ri se le ve l. T h e d is tr ib u ti o n sh ow n in G ra p h II I. 4 m ig h t re fl ec t ec o n o -m ie s re la te d to th e en te rp ri se b u t th is is a ro u gh ap p ro x im at io n . It is n ev er th el es s w o rt h m en ti o n in g th at so m e o f th e se ct o rs w it h th e h ig h es t le ve ls o f co n ce n tr at io n ar e ch ar ac te ri se d b y ec o n o m ie s o f s ca le in p ro d u ct io n . E x am p le s ar e m o to r ve h ic le s, el ec tr o n ic v al ve s a n d t u b es , a n d a ir cr af t a n d s p ac ec ra ft . ( 11) T h er e ar e al so va ri at io n s ac ro ss co u n tr ie s (n o t d is cu ss ed in th is p o cke tb o o k) , an ex am p le o f w h ic h is th e te x ti le in d u st ry th at sh ow s d if fe re n t le ve ls o f co n ce n tr a-ti o n .
EU sectoral competitiveness indicators 19 � �� �� �� �� �� � �������������������� �������������� ������� �������� �������� �������������������� ������������������������� ������������������������������ ����������������������� ������������������������������������� ��������� ������������������� ����������������������������� ������������ ������������������������� ���������������������� ���������������� �������������� ��������������������������������� ��������������������������� ��������������������������� ������������������������������ ���������������������� ����������������� �������������� ������������������������������� ����������������������� ��������������������������������������� ������������������������������� ��������������������������������� ������������ ��������������������������������� ��������������� ������������ ������������������� ���������������� ��������������� ������������� ������������������������������� �������������� ���������������������� �������������������� ������������������������������� ������������������������ ������������������������� ������� ������������� ������������� ������������� ����������� ����������� ����������� �������� � So ur ce : C al cu la te d f ro m E u ro st at ’s N ew C ro n o s d at ab as e.
EU sectoral competitiveness indicators 20
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A n in d ic at or to ch ar ac te ri se th e te ch n ol og y of se ct or s is ca p it al in te n si ty . N ot on ly is it u se fu l fo r d es cr ip ti ve p u r-p o se s, bu t al so as a d et er m in an t of in d u st ry co n d it io n s an d b eh av iou r. H ig h le ve ls of in ve st m en t ca n op er at e as a ba rr ie r to en tr y, im p ly a h ig h er d eg re e of ri sk , an d d et er m in e co st st ru ct u re s an d p ri ce st ra te gi es of fi rm s. In th is se ct io n an in d ic at or of ca p it al in te n si ty is p re se n te d , w h ic h is ba se d on in ve st m en t in fi xe d as se ts p er p er so n em p lo ye d . T h e in d ic a-to r h as b ee n co n st ru ct ed as fo ll ow s. Fi rs t, gr o ss in ve st m en t in ta n gi bl e go o d s p er p er so n em p lo ye d h as b ee n es ti m at ed ac ro ss s ec to rs a n d co u n tr ie s fo r ye ar s 19 99 , 2 0 0 0 an d 20 01 ( 12). T h e av er ag e ov er th es e th re e ye ar s is th e in d ic at or of ca p it al in te n si ty fo r ea ch cou n tr y an d se ct or . U si n g th is ap p ro ac h an es ti m at e h as b ee n ob ta in ed fo r 13 cou n tr ie s: al l EU -1 5, w it h th e ex ce p ti on of G re ec e an d Lu xe m b ou rg , al th ou gh th e co ve ra ge by in d u st ry an d cou n tr y is u n ev en ( 13). T h e se co n d st ep co n si st s of ca lc u la ti n g th e m ed ia n an d m ea n ac ro ss c ou n tr ie s f or e ac h s ec to r. St ri ct ly s p ea k in g th is i s n o t an i n d ic at o r o f ca p it al s to ck p er p er so n e m p lo ye d b u t o f in ve st m en t (t h at i s, a d d it io n to t h e ca p it al s to ck ) b y p er so n e m p lo ye d . A d ra w b ac k is th at i n ve st m en t is h ig h ly c yc li ca l a n d t h er ef o re t h e re su lt s mu st b e in te rp re te d a s an a p p ro x im at io n , al th o u gh t h e cyc li ca l ef fe ct i s p ar ti al ly o ff se t b y ta k in g av er ag e va lu es o ve r th re e ye ar s. N ev er th el es s, t h e re su lt s ar e co n si st en t w it h e st im at es o f st o ck o f ca p it al p er p er so n e m p lo ye d fr o m o th er s o u rc es ( 14). T h e re su lt s ar e p re se n te d in G ra p h II I. 5. T h is sh ow s th e m ea n an d m ed ia n fo r ea ch se ct or ac ro ss th e cou n tr ie s av ai l-ab le. T h e se ct or s ar e ra n ke d fr om h ig h to lo w va lue s of th e m ea n ( 15). F or n ea rl y al l se ct or s th e tw o va lu es ( m ea n a n d m ed ia n ) ar e cl os e to e ac h o th er , w h ic h in d ic at es t h at t h e d is -tr ib ut io n a cr os s co u n tr ies is n ot s ke w ed. T h e ex ce p ti ons a re m in in g an d w at er t ra ns p or t. I n t h e fi rs t ca se t h e ve ry h ig h va lu e in D en m ar k (a n d to a les se r ex te n t in t h e U n it ed K in g-do m ), a n d in t h e se co n d ca se t h e h ig h v al u es i n D en m ar k an d A u st ri a, h av e a st ro n g in fl u en ce in t h e m ea n o f t h e d is tr i-bu ti on ( 16). N ev er th el es s, a ls o in t er ms o f th e m ed ia n v al u e th es e se ct or s ap p ea r in t h e to p p la ces o f th e ra n ki n g. ( 12) T h e so u rc e u se d is E u ro st at ’s N ew C ro n o s d at ab as e (d o m ai n : St ru ct u ra l B u si n es s St at is ti cs — S B S) . ( 13) Ta b le II I. A .3 sh ow s th e d at a ac tu al ly av ai la b le , o n w h ic h th e in d ic at o r h as b ee n ca lc u la te d . ( 14) Se e O ’M ah o n y a n d v an A rk ( 2 0 0 3 ), o p . c it ., f o o tn o te 2 . ( 15) R en ti n g o f m ac h in er y an d re al es ta te ac ti v it ie s h av e b ee n ex cl u d ed fr o m th e gr ap h . T h es e ac ti v it ie s ar e o u tl ie rs , w it h ve ry h ig h va lu es o f in ve st m en t p er p er so n , d u e to th e n at u re o f t h ei r a ct iv it y. ( 16) A n ex tr em e ca se in th e gr ap h is th e ca se o f le ga l, te ch n ic al an d ad ve rt is in g al re ad y m en ti o n ed , fo r w h ic h th e m ea n an d m ed ia n va lu es ar e id en ti ca l b ec au se d at a ar e av ai la b le f o r o n e s in gl e c o u n tr y.EU sectoral competitiveness indicators
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Mean Median
50.0
Mining and quarr yng Electricity , ga s an d w ate r su pply Water transpor t
Mineral oil refin ing and nuclear fuel
Air transport Commun ications
Electron ic valves and tubes Chemicals
Supporting transpor t activities
Pulp, paper and paper pr oducts
Research and dev elopment
Inland transport Basic metals
Motor vehicles Non-metallic mineral produc ts Telecommun ication equipment Food , dr ink an d to bac co
Aircraft and spacecraf t
Rubber and plastics Office ma chinary Oth er in stru men ts Wood and pr oducts of w ood Insulated wire
Printing and publishing Radio and television receiv ers Who les ale tra de
Other electrical machinery n.e.c .
Sale and repair of motor v ehicles
Fabricated metal pr oducts
Computer and r elated activities
Railroad and transpor t equipment n.e.c. Tex tiles Mechanical enginering Scientific instruments Furn iture, manufac turing n.e.c.
Building and reparing of ships Construc tion
Hotels and catering Retail trade Lea the r an d fo otw ear
Other business activities n.e.c.
Legal , technical and adv ertising Clothing 50.0 45.0 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 Sour ce : C al cu la te d f ro m E u ro st at N ew C ro n o s d at ab as e ( SB S d o m ai n ).
EU sectoral competitiveness indicators 22
