1. 1 Enterprise and Industry Directorate General European Commission Measurement of Competitiveness as the basis for policy development Heikki Salmi, European Commission KNOWLEDGE ECONOMY – Challenges for measurement Session: Competitiveness and Growth 8-9 December 2005, Luxembourg

2. 2 Enterprise Directorate General Industry remains importantPolicy development, steps Better regulation - Impact assessment - Consultation - Alternative policy instruments - Simplify and improve Questions, issues Description of the situation Policy objectives, measures, options Facts, statistics, indicators, analysis

3. 3 Competitiveness – dependent on many policies Competition policy Internal Market Environmental Policy R&D Consumer & health protection policies Trade policy COMPETITIVENESS Regional policy Social policy Fiscal policy

4. 4 Why revisit industrial policy? - Globalisation (i.e. delocalisation of R&D) and enlargement -Increased societal demands (e.g. environmental protection, health and social development) -Technological change (i.e. enabling technologies) -Disappointing productivity performance -Revisit horizontal approach and its sectoral application é Get back on Lisbon track

5. 5 New Industrial Policy Communication, aims EU manufacturing performance Assessment of 27 sectors based on screening Combining horizontal and sectoral approaches Work programme for industrial policy

6. 6 EU MANUFACTURING PERFORMANCE Competitiveness analysis based on statistics, indicators and studies Focus on sectoral competitiveness What to measure, what is relevant, available Other criteria: Coverage, long time- series, comparability, consistency, timeliness

7. 7 EU MANUFACTURING PERFORMANCE- to measure Importance of the sector: economically, labour force Economy of scale, SME intensity, market powers Competitiveness: Productivity development Growth, dynamism of sectors Social dimension of growth, reallocation of resources External competitiveness, comparative advantage

8. 8 EU MANUFACTURING PERFORMANCE Sources: Van Ark database and studies, Eurostat Sectors based mainly on NACE 2-digit level The screening will be repeated annually

9. 9 ASSESSMENT OF THE SECTORS,challenges, opportunities KNOWLEDGE BETTER REGULATION OPEN & COMPETITIVE MARKETS ENVIRONMENT & ENERGY PARTICIPATION IN GLOBAL MARKETS STRUCTURAL CHANGE

10. 10 ASSESSMENT OF THE SECTORS, DATA NEEDS R&D, innovations Skills and education Competition aspects Energy, emissions Foreign trade Employment, geographic location of industry

11. 11 Clear messages in favour of the Knowledge Economy Productivity growth gap between EU and other industrialised economies. Reasons are partly structural. Growth engine ICT is smaller EU trade still in sectors with medium-high technologies and low to intermediate labour skills Increasing international competition for R&D spending

12. 12 WORK PROGRAMME FOR INDUSTRIAL POLICY CROSS-SECTORAL INITIATIVES IPR & Counterfeiting Initiative High Level Group on Competitiveness, Energy and Environment External Aspects of Competitiveness and Market Access New Legislative Simplification Programme Improving Sectoral Skills Managing Structural Change in Manufacturing An Integrated Approach to European Industrial Research and Innovation

13. 13 SECTOR-SPECIFIC INITIATIVES WORK PROGRAMME FOR INDUSTRIAL POLICY Pharmaceuticals Forum Mid-Term Review of Life Sciences & Biotech Strategy High Level Groups on Chemicals and Defence Industries European Space Programme Taskforce on ICT Competitiveness Mechanical Engineering Policy Dialogue Competitiveness Studies (ICT, Food, Fashion &Design)

14. 14 COMBINING HORIZONTAL AND SECTORAL APPROACHES: EXAMPLE sectors KnowledgeRegulation SECTORAL ACTIONS R&DIPRInternal Market Pharmaceuticalsx Pharma Forum Defencex HLG Defence ……… CROSS SECTORAL INITIATIVES IPR Initiative challenges X X X X

15. 15 Pressures on statistics Geographical coverage: EU-25 Comparability to competitors and emerging economies Timeliness: Fresh where development is dynamic Classifications: More detailed, NACE Confidentiality. Some data not available Productivity by sector is the key in competitiveness analysis Sectoral data needs are increasing More data on services More data on SMEs More data on outsourcing and relocation

16. 16 Some concluding remarks More systematic approach to policy development is increasing, better regulation, impact assessment, etc. Data needs are increasing at least in some policy areas, even more detailed data

17. 17 Some concluding remarks What are the capacities of National Statistical Institutes and Eurostat to compete with other data sources, or should there be a new work share How to fulfill the increasing data needs when at the same time costs have to be decreased The next mid-term Statistical Programme has a key role to play