JRC: Eurostat: 2 nd WPTGS Meeting, OECD, Paris, November 2009 Slide 1 High-tech trade by enterprise characteristics by Alexander Loschky European Commission – DG Joint Research Centre Unit G9: Econometrics and Applied Statistics and Karo Nuortila European Commission – DG Eurostat Unit G5: International trade – production

2 nd WPTGS Meeting, OECD, Paris, November 2009 Slide 2 High-tech trade There are two approaches to measure the trade of high- tech industries Traditional approach by using correspondence tables Trade by high-tech goods can thus be calculated easily from trade statistics as it requires only summing up the goods classified as typical output of high- tech industries Alternative approach (sectoral approach) Activity based approach: measures the real trade of high-tech activity sectors, regardless of the products traded Data are however not readily available as the approach requires explicit identification and selection of traders belonging to high-tech activity sectors Due to well-known issues, these approaches may lead to different outcome Coherence with other relevant statistics (R & D statistics, production,...)? Studies and analysis?

2 nd WPTGS Meeting, OECD, Paris, November 2009 Slide 3 Sectoral approach Statistics on trade by activity sectors require linking trade micro data with business registers Eurostat has worked several years with this project (trade statistics by enterprise characteristics) Standardised set of indicators developed and currently available in Comext (20 countries, reference years 2005 and 2006) The indicators do not, however, provide sufficient details on the high-tech trade by enterprise characteristics......but the same method can be used

2 nd WPTGS Meeting, OECD, Paris, November 2009 Slide 4 Data collection and treatment In order test the sectoral approach, EU Member States were requested to provide 2 datasets Dataset dimensions: Five high-tech sectors Medical, precision & optical instruments (ISIC/NACE 33) Pharmaceuticals (ISIC 2423 / NACE 2441 & 2442) Radio, television & communication equipment (ISIC/NACE 32) Office, accounting & computing machinery (ISIC/NACE 30) Aircraft & spacecraft (ISIC/NACE 353) Plus Management activities of holding companies (ISIC/NACE 7415) Most detailed product classification (CN8) Partner broken down by Intra- and extra-EU partners Imports and exports In addition, a second dataset was requested without a product breakdown but with a size-class breakdown Variables: Trade value Number of enterprises

2 nd WPTGS Meeting, OECD, Paris, November 2009 Slide 5 Data collection and treatment Data (reference year 2006) received from 17 EU Member States and Norway Data were aggregated and confidentialised by Eurostat before transmission to JRC Aggregation over reporting countries (“EU” as reporter) Aggregation over products (CN codes summed up to HS6) Active confidentiality: Suppression of NACE/Flow/HS6 combination if it contains at least one CN-code with 3 or less enterprises and If the given CN-code(s) make up 80 % of the HS code

2 nd WPTGS Meeting, OECD, Paris, November 2009 Slide 6 Share of confidential data

2 nd WPTGS Meeting, OECD, Paris, November 2009 Slide 7 Share of HT sectors in total HT sector trade

2 nd WPTGS Meeting, OECD, Paris, November 2009 Slide 8 Assessment of the traditional approach 1

2 nd WPTGS Meeting, OECD, Paris, November 2009 Slide 9 Assessment of the traditional approach 2

2 nd WPTGS Meeting, OECD, Paris, November 2009 Slide 10 Assessment of the traditional approach 3 Results of the assessment: “traditional” approach works well for Extratrade but not for Intratrade “traditional” approach works better for exports than for imports calculating the trade value of HT industries via correspondence tables can lead to an overestimation of HT industries’ trade (especially with respect to the imports) Imports Exports

2 nd WPTGS Meeting, OECD, Paris, November 2009 Slide 11 Share of HT products traded by HT industries Less than 50% of the total exports of the HT industries are HT goods Share of HT products the highest in Air- and Spacecraft industry and Radio, TV, Com- munication industry Confidentiality had no major impact except on imports of the Air- and Spacecraft industry

2 nd WPTGS Meeting, OECD, Paris, November 2009 Slide 12 Participation of HT industries in total HT trade Participation of the HT industries in total trade with HT products is considerably higher for exports than for imports Participation is also much higher for Extratrade than for Intratrade

2 nd WPTGS Meeting, OECD, Paris, November 2009 Slide 13 Share of SMEs in the trade of HT industries by value 1 The share of SMEs in the trade of the HT sectors as a whole is 15% for imports and 16% in exports These shares are somewhat smaller than SMEs’ shares in the total trade of all activity sectors SMEs’ share especially small for the air- and spacecrafts industry (only 3%)

2 nd WPTGS Meeting, OECD, Paris, November 2009 Slide 14 Share of SMEs in the trade of HT industries by value 2 Value share of SMEs usually relatively small in big economies (e.g. DE, FR) and in Eastern European Member States (e.g. CZ, EE, HU, PL, SK) In Eastern countries probably due to the dominance of interna- tional companies on the local market

2 nd WPTGS Meeting, OECD, Paris, November 2009 Slide 15 Share of SMEs in the trade of HT industries by number of traders 1 Share of SMEs by number is always higher than the share of large enterprises Together with the share of SMEs by value this confirms that the concentration rate is very high in foreign trade Large enter- prises play a dominant role while SMEs usually have only a small trade volume

2 nd WPTGS Meeting, OECD, Paris, November 2009 Slide 16 Main results Calculating the trade of HT industries via correspon- dence tables can lead to an overestimation of their trade Less than 50% of the exports of HT industries are HT goods The participation of HT industries in the total exports of HT products is in general ~ 50%, for exports to third countries (Extratrade) it is much higher (>75%) The (value) share of SMEs in the trade of HT industries is smaller than the SMEs’ share in total trade The (value) share of SMEs is usually relatively small in big economies and in Eastern MS

2 nd WPTGS Meeting, OECD, Paris, November 2009 Slide 17 Outlook Further exploit the data: –1) product-level analysis of the participation of HT industries in the trade with HT goods –2) and conversely also of the shares of HT products in the trade of HT industries Wider data basis: –extend to a wider range of EU MS and if possible to OECD MS –include the trade of other sectors like the wholesale and retail sectors (ISIC/NACE 51 and 52), this will improve mainly the analysis of the imports In the long term: link other enterprise related data via the business register to the foreign trade data: –e.g. production statistics