Competitiveness Report of the European Commission

Since 1998 WIFO coordinates studies commissioned by the European Commission analysing the competitiveness of the European Union and its member countries in the context of a major framework contract. The Directorate General for Growth (previously DG Enterprise and Industry) of the European Commission has published an annual European Competitiveness Report between 1998 and 2014. In 2015 this publication has been discontinued and from 2015 onwards has been replaced by the European Internal Market and Competitiveness Report reflecting the merger of the Directorate General for the Internal Market and the Directorate General for Enterprise and Industry. In the context of this framework contract WIFO and its partner institutes have produced background studies for these EC publications which have been and will be the major tangible output of this project.

The results of these studies next to the European Internal Market and Competitiveness Report form also other landmark publications of the European Commission such as the EU Industrial Structure Report or the Member State Competitiveness Report. They also provide crucial intelligence to the Council and the wider public about the state of competitiveness of industries in the EU economy. In addition, the findings are used to measure progress towards the Europe 2020 Strategy and the effects of structural reforms in EU member countries.

The research is carried out by a WIFO- led consortium of 20 specialised research institutes from 14 European countries. The current framework contract is in force for the years 2015 till 2018.

Partners

AIT – Austrian Institute of Technology https://www.ait.ac.at/
BSI – The British Standards Institution https://www.bsigroup.com/de-AT/
CIREM – Center for International Research and Economic Modelling http://www.cepii.fr/cirem/en/presentation/cirem.htm
EBN – European Business and Innovation Center Network https://ebn.eu/
ECORYS – http://www.ecorys.com/
ESRI – Economic and Social Research Institute http://www.esri.ie/
KOF – Eidgenössische Technische Hochschule Zürich https://www.kof.ethz.ch/
ETLA – Research Institute of the Finnish Economy https://www.etla.fi/en/
FEEM – Fondazione Eni Enrico Mattei https://www.feem.it/en/
IDEA – Idea Consult http://www.ideaconsult.be/
ifW – Kiel Institut für Weltwirtschaft https://www.ifw-kiel.de/
ivie – Instituto Valenciano de Investigaciones Economicas http://www.ivie.es/es_ES/
IWE – Institute of World Economics http://www.krtk.mta.hu/english/, http://www.vki.hu/eindex.shtml?setlang=english
NIESR – National Institute of Economic and Social Research https://www.niesr.ac.uk/
SPI – Sociedade Portuguesa de Inovação http://www.spi.pt/
CWS – Center für Wirtschaftspolitische Studien https://www.cws.uni-hannover.de/center.html
SGH – World Economy Research Institute https://ssl-kolegia.sgh.waw.pl/en/KGS/structure/IGS-KGS/Pages/default.aspx
VTT – Technical Research Center of Finland http://www.vttresearch.com/
wiiw – Wiener Institut für internationale Wirtschaftsvergleiche https://wiiw.ac.at/
ZEW – Zentrum für Europäische Wirtschaftsforschung http://www.zew.de/
 

Publications

Iulia Siedschlag, Mattia Di Ubaldo, Manuel Tong Koecklin (ESRI)
Monographs, December 2017, 128 pages, https://ec.europa.eu/docsroom/documents/28182
Commissioned by: European Commission
Study by: Austrian Institute of Economic Research – Economic and Social Research Institute
Ireland's attractiveness to foreign direct investment is linked to a range of factors including participation in the European Single Market, skilled and flexible labour force, business-friendly environment, competitive statutory and effective tax rates. The productivity gap between foreign-owned firms and Irish-owned firms has increased over time and is larger in services in comparison to manufacturing. Relative to Irish-owned firms, foreign-owned firms are more productive, pay higher wages, invest more in tangible and intangible assets. On average, relative to Irish-owned firms, foreign-owned firms export a larger proportion of their output and import more relative to their output. Foreign-owned firms export and import a significantly large number of products in comparison to Irish-owned firms, 2 to 3 times more in recent years. Foreign-owned firms export to a larger number of destinations and import from more countries both EEA and extra-EEA countries. The analysis also shows that foreign-owned firms are integrated in more complex production and trade networks with a higher number of product-country combinations per firm. An interesting feature is the more important integration of foreign-owned firms in extra-EEA trade while Irish-owned firms tend to trade predominantly with EEA countries (mainly the UK). The evidence indicates only very limited intra-industry and intra-region FDI spillovers. It appears that Irish-owned firms benefit in terms of their export intensity from the presence in the same industry of affiliates of multinationals based outside the EU. However, the presence of multinationals crowd-out the export performance of Irish-owned firms within the same region. While the presence in the same region of affiliates of multinationals based in other EU countries affects negatively the export performance of Irish-owned firms in manufacturing, the presence of affiliates of non-EU multinationals has a negative effect on the export performance of Irish-owned firms in services.
Klaus S. Friesenbichler (Project co-ordinator), Christian Glocker, Werner Hölzl, Serguei Kaniovski, Agnes Kügler, Andreas Reinstaller, Gerhard Streicher (WIFO), Iulia Siedschlag, Mattia Di Ubaldo, Zuzanna Studnicka (ESRI), Robert Stehrer, Roman Stöllinger, Sandra Leitner, Doris Hanzl-Weiss, Oliver Reiter, Amat Adarov, Alexandra Bykova (wiiw)
Monographs, December 2017, 367 pages
Commissioned by: European Commission
Study by: Austrian Institute of Economic Research – Economic and Social Research Institute – The Vienna Institute for International Economic Studies
Online since: 08.01.2018 0:00
 
This report offers an extensive analysis of the effects of the EU Single Market. It sheds light on four interrelated aspects: It first reveals the asymmetric economic performance across member countries, which also mirrors structural differences. These differences in economic outcomes are next confronted with measures of the Single Market, economic institutions, changes in demand patterns, industrial turbulence and producer price developments. Next, the changes in value chains are tracked over time, and also put into a global perspective. Eventually, firm level evidence complements the findings. The results are highly relevant for economic policies at the member country and the EU level.
Michael Peneder (WIFO), Christian Rammer (ZEW)
Monographs, January 2018, 242 pages
Authors: Michael Peneder, Andreas Reinstaller, Stefan Weingärtner (WIFO), Florence Blandinières, Niklas Dürr, Stefan Frübing, Sven Heim, Bettina Peters, Christian Rammer (ZEW) – Disclaimer: This report has been prepared for the European Commission, DG GROW, under Specific Contract No SI2-750358 implementing the Framework Service Contract ENTR/300/PP/2013/FC-WIFO coordinated by the Austrian Institute of Economic Research (WIFO, coordinator: Andreas Reinstaller). The information and views set out in this study are those of the author(s) and do not necessarily reflect the official opinion of the Commission. The Commission does not guarantee the accuracy of the data included in this study. Neither the Commission nor any person acting on the Commission's behalf may be held responsible for the use which may be made of the information contained therein.
Commissioned by: European Commission
Study by: Austrian Institute of Economic Research – Centre for European Economic Research
Online since: 21.12.2017 13:34
 
The study serves as a background document for the European Commission and is conducted in close cooperation with the ZEW Mannheim. The main tasks are to define the concept of competitiveness at the micro, meso, and macro levels of economic activity, to establish a set of indicators that is suitable for comparing the competitive performance of EU countries, to develop a systematic grid of indicators and policy objectives, and to determine the strengths and weaknesses of commonly used indicators, including their associated measurement problems or biases.
Jan-Maarten de Vet, Andreas Pauer, Erik Merkus, Paul Baker, Ana Rosa Gonzalez-Martinez, Tamas Kiss-Galfalvi (ECORYS), Gerhard Streicher (WIFO), Ana Rincon-Aznar (NIESR, London)
Monographs, January 2018, 312 pages
Commissioned by: European Commission
Study by: ECORYS Holding BV – Austrian Institute of Economic Research – National Institute of Economic and Social Research, London
Online since: 13.03.2018 0:00
The mature cement and lime industry sectors are vital for a range of downstream industries, products and services. Over the past 10 years, both sectors have witnessed major downturns, and future prospects are uncertain. These sectors and, in turn, policy-makers, need a better understanding of how resilient the sectors are when responding to external shocks – notably to changes in demand, but also to regulatory reforms and new initiatives (at EU, national, regional and local levels).
Commissioned by: European Commission
Study by: Austrian Institute of Economic Research – ECORYS Holding BV – Centre for European Economic Research
Commissioned by: European Commission
Study by: Austrian Institute of Economic Research – SPI – IDEA Consult – The Vienna Institute for International Economic Studies – Economic and Social Research Institute – Hungarian Academy of Sciences, Institute for World Economics
Augusto Medina, Audry Maulana, Douglas Thompson, Nishant Shandilya, Samuel Almeida (SPI), Aki Aapaoja, Matti Kutila (VTT), Erik Merkus, Koen Vervoort (ECORYS)
Commissioned by: European Commission
Study by: Austrian Institute of Economic Research – SPI – Technical Research Centre of Finland – ECORYS Holding BV
Online since: 19.07.2017 0:00
The study provides a clearer picture of the EU's current position compared to its third country counterparts in the connected and automated driving (C&AD) sector. It analyses the strategies, funding programmes, standards, regulations and value chains for C&AD in the selected countries. It aimed to review and analyse C&AD technologies and to assess the effectiveness of existing EU support measures for the sector. Based on a comparative analysis of public support measures, programmes and regulations put in place in the USA, Japan, South Korea, China and the EU, we assess the technological and commercialisation readiness level of automated and connected driving and the effectiveness of instruments available for supporting the development of C&AD.
Commissioned by: European Commission
Study by: Austrian Institute of Economic Research – Austrian Institute of Technology – The Vienna Institute for International Economic Studies – IDEA Consult
This report investigates wholesale as one of the main service industries in the European economy. Wholesale is the resale of new and used goods to retailers, industrial, commercial, institutional or professional users, or to other wholesalers on their own account or for third parties. It plays a pivotal role in the European Single Market by bridging national markets and connecting producers, retail trade and industrial demand across Europe. Wholesale employs about 10 million persons in the EU 28 and accounts for a share of 7 to 9 percent in total employment in most EU countries. The share of micro and small enterprises is considerably higher than in manufacturing. The sector reveals considerable heterogeneity in terms of firm size, productivity and profitability across EU countries and wholesale sub-sectors. Moreover, the report sheds light on the integration of the wholesale sector in value chains with upstream manufacturers and downstream retailers, and on the role of technology and innovation in wholesale.
Commissioned by: European Commission
Study by: Austrian Institute of Economic Research – The Vienna Institute for International Economic Studies – ECORYS Holding BV
Several years after the global slump, the construction industry and many countries and sectors with construction-related activities and firms tied to them still feel the impact of that financial and economic crisis. In contrast, several years prior to the crisis, there had been a major construction bubble. This report outlines the significance of the construction sector for the EU economy, given its potential in job creation in micro and small enterprises as well as its role as a major consumer of intermediate products and related services. Developments within the industry have wide-reaching implications for the nature of growth that can be achieved, not least in terms of achieving the ambition of smart, sustainable and inclusive growth that is at the heart of the Europe 2020 strategy. Furthermore, a modernisation of the sector and improvements in the efficiency of building construction are also key aspects for the transformation of the EU's energy system as pointed out in the "Energy Roadmap 2050". In this context, the Commission introduced its "Strategy for the sustainable competitiveness of the construction sector and its enterprises" that contained a proposed Action Plan Construction 2020 aimed at addressing challenges within the 2020 time horizon. This Action Plan focuses on five thematic priorities which aim to address economic, skills, environmental, regulatory, and international challenges. This study provides an assessment of the role and dynamics of the construction industry in the European Union and its interlinkages with other industries over the last fifteen years. The report draws a picture of a sector in transformation, partly still suffering from the ramifications of the global crisis, and points to the new foundations from which the sector and the whole value chain can develop towards the future.
WIFO, Instituto Valenciano de Investigaciones Economicas, NIESR, London
Commissioned by: European Commission
Study by: Austrian Institute of Economic Research – Instituto Valenciano de Investigaciones Economicas – National Institute of Economic and Social Research, London
Total factor productivity at the aggregate levels of economies or sectors of activity can be broken down to firm-specific TFP, where considerable heterogeneity between firms can be found. It is therefore necessary to consider the entire TFP distribution across firms to derive correct policy implications. An important aspect in this connection is the allocation of productive resources between firms: a free flow of resources from low-productivity to high-productivity firms is likely to shift the entire distribution of TFPs in a positive direction, while aggregate TFP will suffer if resources are stuck in an inefficient allocation. The study will therefore assess to what extent the reallocation of productive resources can be attributed within-firm effects or between-firm effects and whether this process has changed over time in different EU manufacturing and services industries. The study characterises the TFP distribution, for the EU as well as for member countries, in important manufacturing sectors such as machinery, transport equipment, food and beverages, and fabricated metal products, and studies the characteristics of "frontier firms" at EU level in these industries. It assesses the dynamics of TFP developments over time across EU countries.
Commissioned by: European Commission
Study by: Austrian Institute of Economic Research – The Vienna Institute for International Economic Studies – Centre d'Information et de Recherche sur l'Economie Mondiale – Economic and Social Research Institute
The main purpose of the study is to document and analyse the changing composition of bilateral trade flows (with a focus on intra-EU trade flows) considering various indicators and dimensions of trade flows. Further, an important part of the study is devoted to the role and magnitude of intra-firm trade. As information on intra-firm trade is limited the study proposes and compares various measures. Moreover, based on its theoretical and empirical results, the study should inform policy-making in the European Commission.
Monographs, July 2016, 227 pages
Commissioned by: European Commission, DG Growth
Study by: Austrian Institute of Economic Research – National Institute of Economic and Social Research, London
Online since: 21.11.2016 0:00
 
This study analyses the main transmission mechanisms relevant for the absorption and propagation of asymmetries within the EU and EMU, putting a specific focus on Europe's real economy. In particular, the report aims to assess how the economic shock that triggered the financial and economic crisis has been transmitted and at least partially absorbed in the EU's real economy and the EMU member countries, from both a macro- and a microeconomic perspective. From a policy point of view, the results of the current study imply that, on account of the substantial heterogeneity among EU countries found in all parts of the study, "one size fit all" policies are likely to be very ineffective at increasing the resilience of the EU's single market.
Commissioned by: European Commission
Study by: Austrian Institute of Economic Research – Lower Saxony Institute for Economic Research – IDEA Consult
The development of Clean Industries has obtained a central place in EU policies. The Framework Strategy for a Resilient Energy Union with a Forward-Looking Climate Change Policy, better known as the Energy Union package, puts forward the following five mutually consistent dimensions as the way forward: 1. energy security, solidarity and trust, 2. a fully integrated European energy market, 3. improving energy efficiency contributing to moderation of demand, 4. decarbonising the economy, and 5. research, Innovation and Competitiveness. Notably the elements on energy efficiency and decarbonising the economy lie at the core of developing Clean Industries, while the last dimension is necessary to enable these transitions. This policy choice rests on both social objectives and sound economic rationality, as a transition towards Clean Industries can bring about both environmental benefits and sustained employment as well as opportunities for EU businesses. The aim of the present study is to feed the new EU Global Technology and Innovation Leadership Initiative on energy and climate to boost growth and jobs (TILI Initiative), which is expected to be launched in early 2016.
Commissioned by: European Commission
Study by: Austrian Institute of Economic Research – ECORYS Holding BV
In order to ensure that certain "public services" are guaranteed and available for the public, EU member countries can impose specific obligations on public or private service providers. The objective of this study is to assess how public services are financed and when those arrangements may create competition problems. The two key tasks are: 1. identifying the provided public services and developing a typology of used financing models, and 2. identifiying (potential) competition and efficiency problems for the selected sectors and countries and subsequent mapping to the financing models. This study focuses on the service provision in three sectors (waste, hospitals, broadband technology) within seven countries and is based on publically available information. The identification and description of the provided public services and their financing models (first key task) is primarily based on the assessment of the actual public intervention. Beside the financial mechanisms, attention is also paid to regulation and public ownership. With regard to the second key task, the main focus is on the (risk of) overcompensation and cross-subsidisation. This is in line with the general (state aid) principle that public service providers should not "profit" from the fact that they carry out this service.
Study by: Austrian Institute of Economic Research – IDEA Consult – Austrian Institute of Technology – Technical Research Centre of Finland – European Association of the Machine Tool Industries
Commissioned by: European Commission
Editors: European Commission
Commissioned by: European Commission
Study by: Austrian Institute of Economic Research – SPI – IDEA Consult – ECORYS Holding BV – Centre for European Economic Research
Financial distress at the company level plays a signalling role in an economy, indicating that a firm is not making optimal use of its resources. While financial distress and consequent market exit play a key role in ensuring an efficient allocation of resources, they can have negative economic consequences. The European Commission has allowed state aid to firms in difficulty. This aid can only be given under strict conditions, set out in guidelines on state aid for rescuing and restructuring firms in difficulty. The overall objective of the EU policy is to contribute to successful restructuring of firms and their return to viability. This study has the overall objective of evaluating the EC's ex-ante assessment of restructuring plans submitted by the member countries. Particular focus is given to investigating whether support was provided only in the context of a restructuring plan that was likely to return the firms to long-term viability within a reasonable period of time. The evaluation is based on the analysis of 12 evaluation questions, providing first a descriptive assessment followed by detailed analysis of effectiveness and efficiency.
Monographs, August 2015, 183 pages
This study has been prepared for the Executive Agency for Small and Medium-sized Enterprises (EASME), under Specific Contract ENT-SME-14-F-S107-SI2-698839 implementing the Framework Service Contract ENTR/300/PP/2013/FC-WIFO on "Studies in the Area of European Competitiveness" coordinated by the Austrian Institute of Economic Research (WIFO; coordinator: Andreas Reinstaller). This service contract is financed by the EU Programme for the Competitiveness of Enterprises and SMEs (COSME).
Commissioned by: European Commission
Study by: Austrian Institute of Economic Research
 
The aim of this study is to analyse the development of new industrial specialisations and the process of export diversification both at the country and the regional level for the EU countries over time. It examines to what extent these processes show path dependent properties, whether persistent development trajectories can be shifted in order to avoid structural traps and what role related and unrelated diversification play for the economic performance of regions. Overall, the results of this report and its policy implications underscore that Smart Specialisation policies require a smooth coordination of a larger set of diverse policy measures that take into account both the local context and all the involved players rather than a perfect setup of single policies. In particular, the educational system, specialisation patterns in research and innovation, and foreign direct investments play a key role in diversification processes and should be a constitutive element of Smart Specialisation policies.
Contact

Andreas Reinstaller

Function: Research staff member
Research groups: Industrial Economics, Innovation and International Competition