1. Vorstand EMB Mechanical engineering 30. september 2010 to 01.10.2010 Kerstin Warneke, FB Wirtschaft – Technologie – Umwelt, Maschinenbau Mechanical engineering in the EU 27 The Crisis and Challenges of the future Sources: IG Metall, FB Wirtschaft - Technologie – Umwelt Statistisches Bundesamt (Destatis) Eurostat Ifo-Institut (Ifo)Stand: 30.09.2010

2. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 2 2 Background information about mechanical engineering The crisis in 2009 The Pick-up in 2010 Future beyond 2011 Contents

3. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 3 3 Background information about mechanical engineering in the EU Part 1

4. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 4 4 Part 0: Background information about mechanical engineering two basic characteristics of mechanical engineering: concentrated in the EU 27 in Germany, Italy, France, United Kingdom, Spain heterogenous branche many different products large-scale production in many cases not paying off many small enterprises

5. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 5 5 Part 1: Background information Mechanical engineering is concentrated in the EU in Germany, Italy, F, UK, E 76 %

6. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 6 6 Part 1: Background information Mechanical engineering consists of many small branches

7. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 7 7 Part 1: Background information SME are typical for mechanical engineering

8. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 8 8 Background information about mechanical engineering Policy for SME The crisis in 2009 The Pick-up in 2010 Future beyond 2011 Contents

9. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 9 9 Background information about mechanical engineering The crisis in 2009 The Pick-up in 2010 Future beyond 2011 Contents

10. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 10 10 Year 2009 worldwide financial and economic crisis worldwide stop of investmens mechanical engineering: worldwide simultanous break-down of turnover and production time-delayed decrease of employment Part 2

11. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 11 11 Worldwide GDP: The worldwide financial and economic crisis of 2009

12. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 12 12 Effects on mechanical engineering in the EU 27 Mechanical Engineering 2008 2009 new order - 5,3 %- 30,3 % production + 1,3 %- 26,0 % turnover + 21,3%- 24,0 % employment + 2,2% - 5,1 %

13. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 13 13 Production of mechanical engineering peak to low: decrease -30% 122,3 (1. Qt. 08) 108,3 (2006) -30% 85,6 (2. Qt. 09)

14. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 14 14 all branches of mechanical engineering Downturn hits … (change rates yoy) all countries of the EU 27

15. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 15 15 Employment in mechanical engineering: Decrease of production causes fall of employment - 11 % (01/2010 to (03/2008)

16. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 16 16 Background information about mechanical engineering The crisis in 2009 The Pick- up in 2010 Future beyond 2011 Contents

17. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 17 17 2010 turnover and production strong growth but speed of growth goes down because  recovery of europe mainly based on exports  recovery in USA looses pace  recovery in China looses pace, too still lower level than before crisis growth not everywhere (country, sector) employment decrease Part 3

18. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 18 18 Worldwide Economic Activity (of 41 countries): slowdown Source: Institut für Weltwirtschaft (IfW) Real GDP Climate-Index (right scale) percentage index

19. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 19 19 GDP: growing worldwide economy

20. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 20 20 GDP: Biggest growth from countries like China and India

21. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 21 21 Effects on mechanical engineering in the EU 27 20082009 1. half 2010 new order - 5,3 %- 30,3 % + 25,0 % production + 1,3 %- 26,0 % - turnover + 21,3%- 24,0 % +3,8 % employment + 2,2% - 5,1 % -10,7%

22. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 22 22 Development of growth of New order is gaining speed quarter by quarter despite risks

23. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 23 23 Development of growth of New order by country (02/2010) vs. (01/2010) nearly everywhere improvement for Italy change rate 01/2010 against (04/2009)

24. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 24 24 Production of mechanical engineering: growing quickly (yoy), already +8,5% compared to crises, but still low level 122,3 (1. Qt. 08) -24% 92,5 (2. Qt. 10) 84,4 + 8,5% (3. Qt. 09)

25. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 25 25 Development of growth of Production: growing quarterly, low speed

26. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 26 26 Production is growing in comparison to last year in many branches of mechanical engineering at least in some important countries (Germany, Italy, UK)

27. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 27 27 Employment of mechanical engineering is still going down (yoy)

28. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 28 28 Development of growth Volume of working time and employment negative development comes to an end

29. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 29 29 Future beyond 2011 Part 4

30. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 30 30 1. Change of climate: 2. Globalization: 4.1 Growing interdisziplinarity 4. Individualization of markets 3. Demographic change 1.3 Rising costs for resources and factors of production 2.1 competition with low cost countries 3.1 Lack of skilled workers 3.2 other goods are demanded 2.2 presence in foreign countries 2.3 developing countries grow with greater force than „old markets“ 4.2 Shorter processing times 5. Reduction of public debts mean to less demand which means more competition, too 1.1 Other products1.2 Other ways of production Megatrends, that effect mechanical engineering

31. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 31 31 Examples how employers may react as a result of the megatrends 2. Liqudity (more and more flexible) 3. Cluster Cooperations 1.1 lower wages 1. cut costs 5. Improve Public Appearance of enterprise 2.1 innovation 3.1 to gain skilled workers 3.2 spend money on workers 2.2 service abroad 1.2 push more tasks on employees 1.3 longer working time and more flexible working time 1.4 more temporary work 1.5 employment of workers of low cost countries 4. tax reduction for enterprises

32. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 32 32 What the megatrends mean for employees (and what this means unions) 1. higher flexibility: 2. higher physical fitness 4.1 job security 4. less security 3. higher productivity 1.3 knowledge is at every time up to date 1.4 interdisciplinary knowledge 1.5 to pay for the constant eduction on ones own 2.1 to be able to work longer 4.2 income security 5. higher pressure on wages because of low-cost competition 1.1 time flexibility 1.2 geographic mobility - New Working time modells, - against temporary employment, -minimum wages, - save social standards, - make employers pay for education, … Examples for Tasks for unions

33. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 33 33 Reasons for a special policy for SME Part 5

34. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 34 34 outside the enterprise Characteristics of SME... inside the enterprise higher local dependency (not typical for mechanical engineering) can‘t survive a price competition against large scale produciton worse access to qualified staff no / few personnel policy worse employee participation than in GU low innovative power few research and development worse access to money …… lack of (good) reputation in other regions

35. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 35 35 Possible tasks 1. Förderung von Kooperationen transparente finanzielle Förderung von der Gründung bis zur Erzeugung marktreifer Produkte ? Reasons for a special policy for SME with regard to the supply side / the enterprise Characteristis of SME 1.less innovations less research and development

36. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 36 36 Reasons for a special policy for SME in Germany SME invest less than bigger enterprises in the future Innovatoren sind Unternehmen, die innerhalb der letzten 3 Jahre zumindest ein Innovationsprojekt erfolgreich abgeschlossen haben. Es muss sich dabei nicht um eine Neuerfindung handeln. Source: ZEW, Mannheim industries wit a high proportion of research other industries service sector with other services high proportion of skill-intensive work

37. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 37 37 Reasons for a special policy for SME in Germany Higher costs for innovations in SME Innovationsint ensität: Anteil des Umsatzes, den ein Unternehmen für Innovationen ausgibt Source: ZEW, Mannheim industries wit a high proportion of research other industries service sector with other services high proportion of skill-intensive work share of sales for innovations

38. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 38 38 Innovations pay off less in SME Source: ZEW, Mannheim share of sales caused by new innovative products reduction of costs caused by innovations of the production process

39. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 39 39 Reasons for a special policy for SME Investment in mechanical engineering in Germany 25 % spent money in research and development only every now and then 49 % don‘t do any research and development Reason: - not enough financial power - innovations are more expensive for SME because of high share of fixed costs for innovative projects - less profits through innovations not in times of big changes high risk that SME realise too late what is going on

40. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 40 40 Possible tasks 2.steuerliche Forschungsförderung speziell für KMU? Reasons for a special policy for SME with regard to the supply side / the enterprise Characteristis of SME 2.not enough equity capital / problems in financing

41. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 41 41 Reasons for a special policy for SME Less equity capital in SME

42. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 42 42 Reasons for a special policy for SME Least equity capital in non-coporate SME

43. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 43 43 Possible tasks gaining of members more codetermination higher wage-rises according to productivity Tarifbindung der KMU erhöhen working time models according to the whishes of workers Reasons for a special policy for sme Characteristics of SME 4. worse working conditions Examples: less co-determination und wrights to get informations compensation longer working time more flexibility

44. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 44 44 Handlungsansätze Ausbau der betrieblichen Altersrente mehr Weiterbildungsanstrengungen in KMU Anspruch auf Mitsprache bei der Weiterbildung Vernetzung von Forschung und Bildung Reasons for a special policy for sme Characteristika von SME 4. schlechtere Arbeitsbedingungen Beispiele: Soziale Absicherung (Rente) Weiterbildung, Ausbildungsmöglichkeit der Beschäftigten

45. Vorstand FB Wirtschaft-Technologie-Umwelt, Kerstin Warneke, Tel. 069-6693-2341Folie 45 45 Policy for the demand-side of the economy through the state - monetary policy in favour of demand - rise of wages according to productivity - against austerity Reasons for a special policy for sme Characteristics of SMEs - depend to higher degree than big enterprises on the demand of the domestic market