Globalisation Statistics: General Introduction Michael E. Nielsen & Jon Mortensen EU Twinning Project: Globalisation Statistics State Statistics Service of Ukraine, 28 April 2015

 Drivers of globalisation – measurement challenges  Globalisation statistics  FATS – IFATS, OFATS  Outsourcing  MDL  TEC  Globalisation indicators  Future/FRIBS Today’s presentation 2

 Increased liberalisation of international trade and movement of capital (and individuals)  Technological development lowering costs of transportation, travel and communication  Increased modularisation of the production process – both for manufacturing and services, as market transactions substitute for hierarchical organisation – enabled by technology and regulatory reform  New ways of organising the production processes  Importance of emerging new markets Drivers of globalisation 3

Lowering of tariffs 4 OECD, Economic Outlook, 2007/1, No. 81

Drop in real transport, communication costs 5 OECD, Economic Outlook, 2007/1, No. 81

Growth in world trade and FDI 6 WTO International Trade Statistics 2014 and UNCTAD World Investment Report 2014

 Official statistical production systems mainly designed to measure domestic activities  The dynamics of globalisation requires introduction of new concepts, e.g.  Business functions  Enterprise groups  Changed environment with focus on diminishing respondent burden on enterprises Challenges in measuring globalisation 7

Why different statistical domains and stakeholders need to co-operate 8 What is globalisation?

 FATS  IFATS  OFATS  Outsourcing  MDL  TEC  Globalisation indicators Globalisation statistics 9

 Foreign controlled enterprises resident in the country that compiles the statistics  Residency of the ultimate controlling institutional unit (UCI) defines the nationality of an enterprise  Variables  Country of UCI  Turn-over (of affiliate)  Number of employees  Number of affiliates  Activity (NACE)  Thus, inward FATS describe how many jobs, how much turnover, etc. are generated by foreign investors in the host economy Inward FATS (IFATS) 10

11 IFATS: Enterprises by ownership in EU-28, enterprises

 Enterprises controlled from the compiling country, but resident abroad  Examples of variables  Number of affiliates  Country of affiliates  Number of employees (of affiliates)  Activity (NACE)  Thus, OFATS describe the number of employees, the activity and geography of foreign affiliates Outward FATS (OFAT) 12

Number of foreign affiliates, 2012 OFATS: Results 13

Policy issues addressed How many jobs are moved across borders? Which type of jobs and in which sectors? Who are the receiving countries? Is there a risk of “hollowing out“ skill based activities? What is the impact of international sourcing on the value creation of European firms? What are the employment impacts – in terms of job losses or gains? Survey on International organisation and sourcing of business functions 14

Mainly manufacturing enterprises sourcing internationally 15 Enterprises sourcing internationally broken down by main sector. Share of total number of enterprises in non-financial market economy with 100 or more employees. Survey results published by Eurostat, International sourcing of business functions, 2013

Business Register Interna- tional Sourcing Inward FATS Accounts statistics Foreign trade (goods) Micro data linking

Employment and international sourcing 17 Results from micro data linking. Denmark,

 Datasets are compiled by linking micro data from trade registers with business registers  Aims at describing trade flows from the view point of enterprises:  Characteristics of importing/exporting enterprises  Involvement of different industries in international trade  Involvement of small and medium enterprises (SMEs) in international trade  Impact of international trade on employment, growth and income  Effectiveness of export-promotion policies Trade by Enterprise Characteristics (TEC): New statistical domain 18

 Mandatory (from reference year 2009)  Trade by activity (NACE) and enterprise size class  Concentration of trade by activity  Trade by partner country and activity  Trade by number of partner countries and activity  Trade by commodity (CPA) and activity  Voluntary  Trade by type of trader (one-way, two way)  Trade by ownership  Trade by export intensity  Trade by activity sectors  Trade by partner countries and size-class TEC: indicators 19

TEC: General findings 20

International trade International investments International sourcing and organisation R&D and technology Globalisation indicator themes 21 Employment Business dynamics Economic growth

Globalisation indicator: Share of exports of goods in GDP - change

IFATS/Globalisation indicator: Employment in foreign controlled enterprises as share of total employment 23

 Framework regulation integrating business statistics (FRIBS)  International sourcing survey as multi-yearly survey  IFATS  Covering more activities (NACE Rev.2 sections O-S)  A*38 alignment: we expect more detail in IFATS data, confidentiality spill-over to SBS, spill-back to IFATS confidentiality  OFATS  New variables: Personnel costs, investments  Intra-EU affiliates included Future/FRIBS 24

Thank you! 25