Issues Paper on FGPs and Consideration for a Future Revision of ISIC Report from the Technical Subgroup on ISIC – Austria, Canada, France, Ghana, Morocco, Switzerland, USA, Eurostat, ILO, UNSD September 6-8 2017

Background Technical Subgroup on ISIC (TSG-ISIC) has met twice to discuss treatment of outsourcing of manufacturing production and “factoryless goods production” (May 2014 and May 2016) Issue was discussed at the May 2015 EG meeting where the TSG-ISIC recommended no structural changes to ISIC for now, and to follow current guidelines to treatment of outsourcing in ISIC 13/11/2018

Background EG recommended (May 2015): further research be undertaken to understand the nature and importance of this activity develop of a typology NSIs flag integrated manufacturers, contractors and FGPs in their survey programs and business registers TSG-ISIC continue the work on outsourcing, and prepare a report Final report of TSG-ISIC May 2016 meeting discussed scope, analysis and possible indicators for identifying FGPs, and research/data collection to date Main recommendation: prepare “issues paper” on FGPs and on considerations for future revisions of ISIC 13/11/2018

Status of Issues Paper guidelines on identifying FGPs, manufacturing contractors and “traditional” manufacturers implication on statistical units only unaffiliated business units be considered criteria: final output, material and IP inputs, primary activity and % of outsourcing – little support to use only economic ownership of inputs since arrangements change question: do we need to broaden the definition of manufacturing from physical transformation of goods to “production of goods”? 13/11/2018

Status of Issues Paper review of different indicators to identify FGPs (some based on Eurostat TF) Outsourcing ratio – high purchase of manufacturing services Tax data: status of employment – production v.s. other (France) Turnover, type of investment, depreciation Survey on Global Supply, Production and Distribution Chain Activities (Canada) Flags on business register (Canada) Results are indicating “pure” FGP activity is relatively small in developed economies current version of typology is based on Eurostat TF 13/11/2018

Status of Issues Paper draft version of paper is under review – to be completed early December 2017 submitted for review by the EG – January 2018 finalized – February 2018 TSG-ISIC still seeking input from NSIs on examples of indicators and data sources used to identify FGPs, contractors, etc. issues paper will be an “evergreen” document 13/11/2018