Business services crucial for keeping Europe's industry fit
10 Apr 2014 04:33 PM
The importance of Business
Services should be adequately reflected in the Europe 2020 Strategy according
to a report which the High Level Group on Business Services delivered this
week. The group was launched by Vice-President Tajani and Commissioner Barnier
in March 2013 to help define a European policy agenda for this important
sector. Business services are services provided by businesses to other
businesses. Typical examples include: management consultancies and legal
services, design, engineering and technical maintenance services, recruitment,
security and industrial cleaning. Business services are an integrated part of
our industrial value chains and essential for European competitiveness, a
strong Single Market and an industrial renaissance. The
High level Group chaired by Professor Carlo Secchi of the Bocconi University
was set up in order to study the shortcomings existing in this sector and help
policy makers better understand the current challenges.
The Group recommends actions
along several lines. In addition to prioritising business services in the
Europe 2020 strategy, these include the completion of the Single Market for
services, seizing the international opportunities and developing the right
skills and technological infrastructure needed by European companies. The
recommendations are issued to the Commission, but also to Member States and
industry (for the full recommendations, please see MEMO/14/265).
European Commission Vice
President Antonio Tajani responsible for Enterprise and Industry policy said:
"Business services in Europe have a significant untapped growth
potential, especially in terms of productivity and innovation
uptake. The Group's Report has put the spotlight on the
important role that business services play for the European economy. It
demonstrates that high performing business services are crucial for our
economic value chains and hence European competitiveness. Business services
will be essential for achieving an industrial
renaissance."
Commissioner Barnier said:
"I thank the High Level Group for having drawn renewed attention to
the importance of business services. We have made substantial progress with
regards to the implementation of the Single Market for services. These efforts
must continue. As policy makers, we need to provide the best framework that
will allow Europe's companies, and in particular SMEs, to benefit from
these transformative changes whilst continuing to contribute to jobs and
growth."
Global business services market
becomes more important
Business services are the most
relevant service sector covered by the Services Directive in economic terms
(GDP share, employment, growth) and in terms of the impact of the Services
Directive as underlined in the June 2012 Communication on the Services
Directive (IP/12/587). They have been a net generator of jobs
for the last decade, but productivity has recently been
stagnating.
The global business services
market is estimated at more than €3.5 trillion and is believed to have
doubled in size in the last decade. In Europe, business services account for
11.7% of our GDP and 12% of employment (1 in 8 jobs in Europe is in business
services). Furthermore, since 1999, business services have been growing more
than twice as fast (2.4% yearly average growth rate) as the average of all
other EU sectors (1.1%). The numbers are even more impressive when looking at
employment: employment in business services grew at a yearly rate of 3.5%,
compared to 0.8% on average for all other sectors of the EU
economy.
Probably one of the most
important new business developments is the way the interaction between services
and industry is changing. To some extent it is a trend which has been going on
for years with, for example, increased outsourcing by industrial firms of
certain “non-core” functions. This is an example of what is
sometimes called the "servitization" of industry – in other
words when industrial firms enhance their product with
services.
The traditional distinction
between manufacturing industries and business services is gradually becoming
more and more blurred. The High Level Group analysed extensively the trends in
the sector. New technologies, especially in the ICT sector, are underpinning
the transformation of the way products and services are designed, manufactured
and offered to customers. Europe needs to adapt rapidly to this new paradigm
and seize the global opportunities that business services
offer.
The Group set up five thematic
sub-groups (innovation, internal market, skills, instruments and
internationalisation) that provided concrete advice on the challenges faced by
business services, based on sectoral evidence. Their work is summarised in
thematic reports annexed to the High Level Group Report. Today's report
concludes the mandate of the Group.
More
information:
High Level Group
on business services
Industrial
Policy Communication 2014 - Industrial competitiveness - Enterprise and
Industry
The Single Market Act
Public procurement
reform