Business Services in Europe:

Raising the Game

Norman Rose

Vice-Chairman

High Level Group on Business Services

&

Chairman

European Business Services Round Table

What are Business Services? Business Services cover the entire range of

services where one business supports another in the execution of its activities.

They include: Professional Services (e.g. management consultancy, accountancy and

legal services). Business-Related Services:

Technical Services (e.g. design, engineering and architectural services).

Operational Support Services (e.g. office leasing, labour recruitment, security, facility management and industrial cleaning activities).

Why do Business Services matter?

They represent 12% of EU value added

Their growth has outpaced the rest of the economy Between 1999-2009, the average growth rate for Business Services was 2.38%,

while the average for the EU economy was 1.1%.

Between 1999-2009, the average growth rate of employment of Business Services was 3.54%, while the figure for the EU economy was only 0.77%.

They have a dual impact on economic success

They provide crucial inputs that support the activities of other firms.

They have the potential to increase both their own and their clients’ productivity and innovation.

How well have Business Services

been performing?

Business Services account for€2,000 billion turnover (Plaisier et al. 2012)

France Germany Italy Poland Spain Sweden United Kingdom

0

50

100

150

200

250

300

350

Business Services Turnover by Country (€ billion, 2010)

Business Services create jobs

Business Services provide 24 million jobs (Plaisier et al. 2012)

Franc

e

Germ

any

Italy

Pola

nd

Spai

n

Swed

en

Uni

ted

Kingd

om0

1,000

2,000

3,000

4,000

Number of people employed (thousands, 2010)

The Vision

The High Level Group 2020 vision

for Business Services

European Business Services that

drive innovation, growth and high quality employment through technology and skills in order to deliver solutions for their clients, customers and society:

built on a solid regulatory and standards framework and an integrated Internal Market

becoming a key driver of economic transformation for a sustainable European Society

Europe 2020 Strategy

Business Services do not feature explicitly in the EU 2020 Strategy

Business Services must form a core element in the 2015 revision to the EU 2020 Strategy

The Commission must consider how best to support European Business Services within the global Business Services market

Complete the Internal Market for Business Services

Points of Single Contact should become comprehensive business portals

Administrative and regulatory burdens should be removed

More importance should be given to removing barriers to the temporary cross-border provision of services

European standards should be developed and their use promoted to encourage best practice

There is clear evidence that the Internal Market needs to be strengthened…

Seize the International opportunity

Only a small share of services provided in the EU have a cross-border dimension

Only €10 billion of EU exports (0.08% of EU GDP) currently find their way into global procurement markets

An estimated €12 billion of further EU exports remain unrealised due to restrictions

The quality of support provided in third countries for companies to undertake trade in business services needs to be improved

The Commission needs to consider how to support and encourage Business Services within and beyond Europe…

Create a technological infrastructure

We need an initiative of common European interest bringing together manufacturing and services to create a shared technological infrastructure enabled by the Internet of Things / web 4.0 bringing about a 4th industrial revolution

In its pilot phase this should focus on creating a shared virtual services marketplace for Europe in a few key industries

Business Services that are not technology intensive will become technology dependent or enabled …

Innovation and skills

Current developments such as Web 4.0 and Industry 4.0 will lead to a significant increase in the development and delivery of technology driven and dependent services

An overall European Skills Strategy is required, which includes an e-Skills strategy and which promotes lifelong skills and educational developments particularly in ICT and analytics

Business Services are more people and skills dependent than ever, especially due to the technological revolution

Improve statistics and data

NACE codes need to be revised and deepened in respect of business services

Eurostat and Member States should increase the level of statistical data on business services

Image of business services

Only business can develop a new, realistic profile of industries within the business services sector

Employment in business services companies can provide a valuable career path

In many areas companies are delivering high tech, high value service

Fragmentation

Currently, the various industries within the business services sector are fragmented vertically

There is a need for greater coordination at company and industry federation level – c.f. European Business Services Round Table European Centre for Facility Management

Follow-up and implementation

The Commission should establish a partnership with stakeholders including industrialists, SMEs, trades unions, academics and Member States

This should support - the implementation of the recommendations of the High

Level Group the development of a Business Services ‘scorecard’ to

assess the health, success and contribution to the EU 28 economy of the sector

Thank You