Business Services in Europe: Raising the Game Norman Rose Vice-Chairman High Level Group on Business Services & Chairman European Business Services Round Table

What are Business Services?  Business Services cover the entire range of services where one business supports another in the execution of its activities.  They include:  Professional Services (e.g. management consultancy, accountancy and legal services).  Business-Related Services:  Technical Services (e.g. design, engineering and architectural services).  Operational Support Services (e.g. office leasing, labour recruitment, security, facility management and industrial cleaning activities).

Why do Business Services matter?  They represent 12% of EU value added  Their growth has outpaced the rest of the economy  Between , the average growth rate for Business Services was 2.38%, while the average for the EU economy was 1.1%.  Between , the average growth rate of employment of Business Services was 3.54%, while the figure for the EU economy was only 0.77%.  They have a dual impact on economic success  They provide crucial inputs that support the activities of other firms.  They have the potential to increase both their own and their clients’ productivity and innovation.

How well have Business Services been performing? Business Services account for €2,000 billion turnover (Plaisier et al. 2012)

Business Services create jobs Business Services provide 24 million jobs (Plaisier et al. 2012)

The Vision

The High Level Group 2020 vision for Business Services European Business Services that drive innovation, growth and high quality employment through technology and skills in order to deliver solutions for their clients, customers and society: built on a solid regulatory and standards framework and an integrated Internal Market becoming a key driver of economic transformation for a sustainable European Society

Europe 2020 Strategy  Business Services do not feature explicitly in the EU 2020 Strategy  Business Services must form a core element in the 2015 revision to the EU 2020 Strategy  The Commission must consider how best to support European Business Services within the global Business Services market

Complete the Internal Market for Business Services  Points of Single Contact should become comprehensive business portals  Administrative and regulatory burdens should be removed  More importance should be given to removing barriers to the temporary cross-border provision of services  European standards should be developed and their use promoted to encourage best practice There is clear evidence that the Internal Market needs to be strengthened…

Seize the International opportunity  Only a small share of services provided in the EU have a cross- border dimension  Only €10 billion of EU exports (0.08% of EU GDP) currently find their way into global procurement markets  An estimated €12 billion of further EU exports remain unrealised due to restrictions  The quality of support provided in third countries for companies to undertake trade in business services needs to be improved The Commission needs to consider how to support and encourage Business Services within and beyond Europe…

Create a technological infrastructure  We need an initiative of common European interest bringing together manufacturing and services to create a shared technological infrastructure enabled by the Internet of Things / web 4.0 bringing about a 4 th industrial revolution  In its pilot phase this should focus on creating a shared virtual services marketplace for Europe in a few key industries Business Services that are not technology intensive will become technology dependent or enabled …

Innovation and skills  Current developments such as Web 4.0 and Industry 4.0 will lead to a significant increase in the development and delivery of technology driven and dependent services  An overall European Skills Strategy is required, which includes an e-Skills strategy and which promotes lifelong skills and educational developments particularly in ICT and analytics Business Services are more people and skills dependent than ever, especially due to the technological revolution

Improve statistics and data  NACE codes need to be revised and deepened in respect of business services  Eurostat and Member States should increase the level of statistical data on business services

Image of business services  Only business can develop a new, realistic profile of industries within the business services sector  Employment in business services companies can provide a valuable career path  In many areas companies are delivering high tech, high value service

Fragmentation  Currently, the various industries within the business services sector are fragmented vertically  There is a need for greater coordination at company and industry federation level – c.f.  European Business Services Round Table  European Centre for Facility Management

Follow-up and implementation Follow-up and implementation  The Commission should establish a partnership with stakeholders including industrialists, SMEs, trades unions, academics and Member States  This should support -  the implementation of the recommendations of the High Level Group  the development of a Business Services ‘scorecard’ to assess the health, success and contribution to the EU 28 economy of the sector

Thank You