EU policies to promote the growth of firms:

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Sujets

• Économie
• Economy

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• Publié par: paul.vallen
• Nombre de lectures: 15
• Langue: English

Extrait

EU policies to promote the growth of firms: is there a need to promote winners?

IFRI, 16 January 2007

Emmanuelle Maincent* European Commission

The views expressed in this presentation are those of the author and do not necessarily reflect the official * European Commission's view on the subject.

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Overview:

Arguments for promoting large firms and high tech sectors Stylised facts: – is it the right debate? The role of EU policies: – Which tools to promote the emergence of fast growing companies in high tech sectors? Concluding remarks

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Preliminary remarks: the nature of the debate

Since a few years, strong focus on improving business environment – Entrepreneurship lower in the EU compared to US (Surveys) – High regulation impedes firm creation and firm dynamism (administrative costs. OECD studies) – Productivity gap with the US.

Fears of a process of deindustrialisation in the EU – Request for supporting industrial champions – Request for a strong EU industrial policy targeting high tech sectors – Industrial policy initiatives in Member States (France, Italy, Belgium, …)

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Rationale behind the support of large firms

Economies of scale and scope – Classical argument – Logic behind the single market Knowledge diffusion – Market failures as a justification for public support to small and large firms Agglomeration effects – Acknowledge the positive role of firms in a region as a catalyst for innovation – Logic behind the French « grands projets » 

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Arguments pros the support of hi tech sectors

Market is not sufficient to help emerge new sectors

Replicate the Airbus case in other sectors – Classical argument

Emergence of China on intermediate industries – Increase in intra-industry trade with China – Strong industrial policy in China

2001

Total

Stylised facts (1): EU25 business structure (manufacturing)

Micro (less than 10) Small (10-49) Medium (50-249) Large (more than 250)  of which 1000 or more Source: New Cronos - Eurostat

Number of Enterprises

France

250 420 100%

81,8% 13,9% 3,4% 0,9%

0,2%

EU-25

2,165,842 100%

79,6% 15,8% 3,7% 0,9%

0,1%

Number of Employees (Mn)

France

3.9 100%

9,8% 19,3% 22,7% 48,2%

26,8%

EU-25

32.4 100%

9,8% 20,6% 25,2% 44,4%

22,3%

Turnover (Mn  )

France EU-25

944,568 5,769, 100% 436 100% 5,2% 5,9% 11,9% 12,9% 17,2% 20,3% 65,7% 60,9%

44,1% 36,0%

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Stylised facts (2): EU worldclass companies

The EU has internationally ranked companies The majority of them are: – in services (retail, banking, insurance) – 1/3 are in industry (energy, petroleum) Sectors: mining, petroleum, motor vehicles – are those that were involved in the industrial revolution at the end of the 19th century.

Stylised facts (3): comparative advantages in low-medium skill sectors EU25 Trade in Manufacturing Products Revealed Comparative advantage Index (average 2002-2004) Graph VI.1: EU-25 trade in manufactured products - Revealed Comparative Advantage index (2002-2004) Pharmaceuticals (HS - 6.7%) Mechanical engineering (LIS - 15.8%) Aircraft and spacecraft (HIS - 4.4%) Non-metallic mineral products (LS - 1.9%)  Printing & publishing (LIS - 1.0%) Scientific instruments (HIS - 4.1%) Other chemical (HS - 10.4%) Pulp, paper & paper products (LIS - 1.8%) Fabricated metal products (LIS - 2.6%) Leather and footwear (LS - 1.5%) Building and repairing of ships (HIS - 1.2%) Food, drink & tobacco (LS - 5.7%) Motor vehicles (LS - 12.1%) Mineral oil refining & nuclear fuel (HS - 1.3%) Other electrical machinery nec (LIS - 4.2%) Furniture; manufacturing nec (LS - 3.4%) Rubber & plastics (LS - 2.4%) Telecommunication equipment (HS - 2.7%) Insulated wire (LIS - 0.4%) Wood & products of wood (LIS - 0.9%) Basic metals (LS - 3.6%) Railroad and transport equipment nec (HIS - 0.4%) Other instruments (HIS - 1.0%) Textiles (LS - 2.6%) Clothing (LS - 1.4%) Office machinery (HS - 2.8%) Electronic valves and tubes (HS - 3.0%) Radio and television receivers (HS - 0.4%) 0.00 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2.00 2.25 Source: EU Industrial Structure (Forthcoming).

Stylised facts (4): A slow pace of change of industrial structure

60

50

40

30

20

10

Volatility of Enterprise Population (birth rate + death rate. 1999-00)

0 EE DE PL HU IE LU (*) US DK (*) NL (*) UK (*) GR SI ES (*) BE (* ) EU (*) IT (*) FI (*) PT (*) SE (*) AT CZ LV 1999 2000

Source: Benchmarking Enterprise Policy: Results from the 2004 Scoreboard (SEC(2004)1427)

Stylised facts (5a) Large firms contribute to Europe’s technological base

Share of BERD Performed by Large Firms (%) 100,0 90,0 80,0 HU NL 70,0 PT  CZ PL 60,0 SK  ES 50,0 EL  IE

40,0 IT 30,0 CY 20 0  EE , LV 10,0 MT 0,0 0,00 0,50 1,00

Source: DG Research, OECD.

BERD as % of GDP and % Shared by Large Firms

DE (1) AT UK  FR EU-25 (3)

1,50

US

DK

2,00

Japan (4) FI

2,50

3,00

SE (2)

3,50 BERD as % of GDP

Stylised facts (5b) Business R&D in EU large companies

Top 10 companies with more that  200 mn net sales by R&D/sales ratio

Top 10 EU companies Elan (IE) ARM (UK) Dassault System (Fr) Industria de Turbo Propulsores (ES) Schwarz Pharma (DE)

Finmeccanica (IT) Schering (DE) Ipsen (LUX)

R&D/sales ratio 39,9 32,8 27,8

21,6 20,9

19,3 19,0 18,5

Rank in  Date of  Employ Sector 2005 R&D  cr ti  ees scoreboard eaon 98 1969 2000 Biotech 155 1978(?) 1324 IT 69 1981 a 5693 IT

141 74

AstraZeneca (UK) 17,7 Infineon Technologies (DE) 16,9 Total R&D investment Source: 2005 Industrial ResearchScoreboard, + company website

19 26 97

9 21

1989 b 1946

1948 1851 1929 1913/19 26 a 1999 c 7,2 bn 

2200 4400

56600 26000 4000 65000 41600

aerospace pharmacy aerospace/ energy pharmacy pharmacy pharmacy IT