EU Competitiveness Bench marking Report 2015

BENCHMARKING REPORT2015

Foreword – Europe at a glance 03

EU COMPETITIVENESS

Economic growth 04

EU’s R&D intensity gap 05

EU-US competitiveness gap 06

Uneven competitiveness in the EU 07

Patent filings 08

Labour productivity vs labour cost 09

Industry production 10

Loan flows to non-financial firms 11

EU governments’ debt 12

ENERGY & CLIMATE

Energy prices 13

Primary consumption by fuel type 14

Energy intensity & emissions 15

Carbon pricing systems worldwide 16

DIGITAL ECONOMY

Telecommunication infrastructure 17

Machine-to-Machine communication 18

ICT-related patents 19

Devices online 20

Fostering start-ups development 21

Venture capital investments 22

EMPLOYMENT, SKILLS & EDUCATION

Europe’s unemployment 23

Digital jobs: vacancies and graduates 24

Education performance 25

TRADE & INVESTMENT

Structure of EU trade balance 26

EU share of global exports 27

Foreign direct investments 28

Rare earth in the modern economy 29

FINANCIAL KPI’S

Revenue 30

EBIT 31

R&D expenses 32

Bibliography and Glossary 33

ERT Members 34

Overview

ERT BENCHMARKING REPORT 2015 | 2

Europe at a glance FOREWORD

As Chairmen and CEOs of leading European multinationals, Members of the European Round Table of Industrialists (ERT) see the business world changing. Competitive pressure on European industries is increasing.

If we are to lay the foundations of our future competitiveness and prosperity, Europe must offer an attractive environment for investment to maintain a vibrant and innovative manufacturing base in Europe, as well as to create jobs. Last year, ERT published Industrial Renaissance – ERT Agenda for Action 2014-2019, which called on political leaders to step up progress for the completion of the Single Market. It also presented key recommendations in all policy areas covered by ERT.

The 2015 edition of the Benchmarking Report takes stock of the economic reality and tracks progress towards a competitive industry in areas identified as key for Europe: competitiveness, energy/climate, the digital economy, employment/skills and trade/investment.

This report is also the opportunity to highlight – and be proud of – the strengths of the European Union which are recognised worldwide. The Union is indeed the first economic power in terms of trade. We are also a top economy in terms of wealth creation. Our work force is highly educated and skilled. Our sophisticated products and services are appreciated for their quality. Last but not least, we also benefit from political stability provided by democracy and rule of law.

Industry remains the backbone of the European economy, notably in terms of exports and R&D. However, a certain number of imbalances could jeopardise our future. Markets and legal frameworks in Europe are still highly fragmented. Unemployment is high. We do not sufficiently invest in innovation and new technologies. Other regions of the world are already implementing strong industrial policies, including energy and competition policies that serve their strategic interests. Global competitors are rapidly expanding the digitisation of their economies, with increases in innovation and productivity expected to follow.

As a result, growth is taking place outside Europe. Thus, European leaders need to take action to ensure that Europe stays a top business location. European climate policy should not jeopardise the competitiveness of the European industry and urgent measures are needed to enable the Internet of Things.

We trust you will find this report useful.

Yours sincerely,

Kurt BockChairman of the ERT Competitiveness Working Group Chairman of the Board of Executive Directors, BASF SE

December 2015

It is of vital interest for Europe’s prosperity that the growth and strengthening of the European industrial base remain at the heart of the political agenda, both in Brussels and in Member State capitals.


-2

0

2

4

6

2.12.0

1.50.9

4.5

3.4

0.6

2.5 2.4

7.6

1.8

0.1

4.7

1.7

-0.1

10.6

7.87.3

10.3

5.1

7.3

2.2

-0.4-0.8

8

10

12

%

Gross domestic product, volume (percentage change on preceding year) - 2010 | 2012 | 2014

2015 (Forecast)

EU-28

1.9%

Russia

-3.8%

Euro Area

1.5%

US

2.6%

Brazil

-3.0%

Japan

0.6%

China

6.8%

India

7.3%

Economic growth

SOURCE: IMF

While the EU has been recovering from the 2012 slowdown, it is far from the levels of growth observed and forecasted in India, China or even the US.

Since economic growth is mostly taking place outside Europe and in particular in emerging countries, EU companies’ export and growth opportunities depend on the effective opening of those markets.

EU COMPETITIVENESS


0

1

2

3

4

5

%

Gross domestic spending on R&D as a % of GDP 2010 | 2013 (top third countries and EU average)

Israel Korea Japan US China EU-28

Within the EU-28, only 3 countries comply with the EU2020 R&D target 2013

Finland : 3.3%

Sweden : 3.3%

Denmark : 3.1%

EU2020 R&D TARGET:3% of GDP to be invested in R&D by 2020

EU’s R&D intensity gapChina has now overtaken the EU in terms of R&D spending (as % of GDP). Only Finland, Sweden, Denmark and Austria have reached the EU2020 target (3%).

SOURCE: OECD

Underinvestment in R&D hampers the long-term competitiveness and health of the entire EU industrial value chain.

EU COMPETITIVENESS


EU-28 (2014): GDP/capita: $36,317GDP/hour worked: $50

US (2014): GDP/capita: $54,630GDP/hour worked: $67

Investing in innovation, in new technologies and implementing the EU Single Market are ways to gain a competitive advantage.

EU-US competitiveness gapWhile being our main commercial partner, the US is also a more competitive economy, ahead of any EU country. Such competitiveness gap between the EU and the US translates into a persistent income gap.

SOURCE: OECD, World Bank, WEF

EU COMPETITIVENESS


8

5

9

5

4 Ranking top non-EU countries

1 Switzerland

2 Singapore

3 United States

6 Japan

7 Hong Kong

11 Norway

13 Canada

14 Qatar

15 Taiwan

16 New Zealand

10

29

51

Global Positions 1-10

11-2021-4041-70>70

Structural weaknesses in the European economies should be tackled. Greater coordination and alignment of policies by the EU and its Member States with industrial objectives are needed.

Uneven competitiveness in the EUAddressing Europe’s internal competitiveness gap is instrumental for increasing growth and jobs.

SOURCE: WEF

EU COMPETITIVENESS


40

35

30

25

20

15

10

5

0

Country shares as a percentage of total patent filings 2007 | 2012

%South Korea

FranceItalyNetherlandsSwitzerland UK JapanGermany US EU-28China

* PCT: Patent Cooperation Treaty * EPO: European Patent O�ce

Patent filings in 2012:

325,905 (PCT+EPO)*

As shown by its decreasing share in total patent filings, the EU’s overall R&D position continues to decline thus weakening its competitiveness.

Patent filings The ambitious R&D policies of China, Japan and Korea have led to bigger global shares of patent filings worldwide (PCT + EPO)*.

SOURCE: OECD

EU COMPETITIVENESS


4

3

2

1

0

-1

Percentage change from 2004 to 2014

% KoreaJapan USEU-28Euro Area

GDP per hour worked Unit Labour Costs

Labour productivity vs labour costBetween 2004 and 2014, unit labour costs in the EU have in average increased faster than labour productivity.

Although key external competitors also see their labour costs increasing (including China), improving the EU’s labour productivity will remain crucial to ensure the EU’s competitive edge in a globalised economy.

SOURCE: OECD, The Economist

EU COMPETITIVENESS


Gap to EU target (20% of GDP)

Gross value added by manufacturing (% GDP)

Share of total industry in GDP (%)

20%

42.6%

23.7%2014

2014

2013 20.5%

13.9%

2014 13.7% -6.3%

2000 16.8% -3.2%

%

Industry productionEU industry contributes to a quarter of wealth production and also plays an important role in terms of jobs and innovation. Wide differences throughout Europe can be observed, e.g. in Eastern Europe, the share of industry is still around a third of GDP. Nonetheless, in general it has faced a continuous decline (as measured below by manufacturing). Such trend can also be observed in other developed economies.

SOURCE: EUROSTAT, WORLD BANK

The 20% of GDP goal for the EU manufacturing sector must be respected and achieved through adequate policy measures (e.g. in the energy and climate change sector).

EU COMPETITIVENESS


0

1

2

3

4

-1

-2

-3

%

Euro Area lending to non-financial firms Loans to governments versus to non-financial firms

4.0

4.5

3.0

3.5

2.5

1.5

2.0

1.0

5.0

Total loans in stock (€ trillion)% change on a quarterly basis

Loans & Securities General Government

Loans to Non-Financial Firms, Non-Government Securities

200

4 Q

1

200

5 Q

1

200

6 Q

1

2007

Q1

200

8 Q

1

200

9 Q

1

2010

Q1

2011

Q1

2012

Q1

2013

Q1

2014

Q1

JAN 2005 = 100 JUL 2015

200

3 Q

1

0

20

40

60

80

100

120

140

160

180

200

Loan flows to non-financial firmsNon financial firms have been hit by the financial crisis in terms of access to capital. Total lending provided has not yet recovered from their 2007 levels. By contrast, loans to governments have followed a steady increase.

In absence of sufficient funding from banks, an effective European capital market is needed, in particular for SMEs. Unintended consequences of regulations designed for the banking sector must also be avoided in order to not undermine industry capacity to invest in productive assets.

SOURCE: ECB, BRUEGEL

EU COMPETITIVENESS


General gross government debt (% GDP)* 2011 | 2014

*Only countries/areas above the threshold are represented

0

%

20

40

60

80

100

120

140

160

180

‘Maastricht Criteria’: debt-to-GDP ratio must not exceed 60%

BEDE IE GRESFRHR ITCYHUMTNL AT PTSI UKEU-28 Euro Area

EU COMPETITIVENESS

EU governments’ debtIn 2014, government debt in the EU reached an average of 86.8% of GDP, i.e. 26.8% above the Maastricht criteria. Cyprus, Portugal and Spain also presented severe budget deficits (i.e. at least twice the 3% Maastricht target) while others (Germany and Estonia) managed to generate a surplus.

In some Member States, high government debt may endanger their capacity to fulfill their public service mission (education, infrastructure, social...) which could in the long term threaten their competitiveness , in particular when coupled with excessive deficits.

SOURCE: EUROSTAT


Average retail electricity and gas prices for industrial consumers 2012

Gas

40-60 €/MWh

20-40 €/MWh

0-20 €/MWh

Electricity

100+ €/MWh

75-100 €/MWh

50-75 €/MWh

25-50 €/MWh

Energy pricesIn general, industrial consumers in Europe pay higher electricity and gas prices than in other regions of the world. Individual policy decisions have become an important driver of price gaps within the EU thus also contributing to an increasing price differential with other economies.

Access to energy sources at a competitive price is key for Europe’s industry. Policy measures should consider the impact on energy prices so as not to enlarge the gap with EU’s major competitors and reflect the direct production and access costs of energy.

SOURCE: EC

ENERGY & CLIMATE


World primary energy consumption by fuel type 2014*(Million tonnes oil equivalent)

Total world consumption for all fuel types: 12,928 *All data is for main consumers

Share

4,211 (33%) 3,066 (24%)

3,882 (30%)

574 (4%)

879 (7%)

317(2%)

China 18% 6% 66% 1% 8% 2% 23%

US 36% 30% 20% 8% 3% 3% 18%

EU-28 37% 22% 17% 12% 5% 7% 12%

Russia 22% 54% 12% 6% 6% 0% 5%

India 28% 7% 56% 1% 5% 2% 5%

Japan 43% 22% 28% 0% 4% 3% 4%

Canada 31% 28% 6% 7% 26% 1% 3%

Brazil 48% 12% 5% 1% 28% 5% 2%

Australia 37% 21% 36% 0% 3% 3% 1%

World 33% 24% 30% 4% 7% 2%

Primary consumption by fuel typeIn 2014, the world was still predominantly relying on oil and coal in terms of primary energy consumption and will do so for the next decades.

Facilitating innovation and technology develop-ment remains essential, as well as ensuring that the value chain for providing low carbon solutions remains in Europe. The EU should also focus on sustainable domestic energy production, while diversifying supply sources and developing required energy infrastructure.

SOURCE: BP

ENERGY & CLIMATE


0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

10

12

8

6

4

2

0

Primary energy consumption per GDP 2000 | 2013 CO2 Emissions 2000 | 2013

Russia China

Toe/

GD

P co

nsta

nt 2

011

thou

sand

USD

EU-28 USChina EU-28 RussiaUS

Bill

ions

of T

onne

s

Energy intensity & emissionsRussia and China consume more energy per GDP than the US and the EU. In addition, although their energy intensity is lowering, total CO2 emissions continue to grow, contrary to the US and the EU.

The EU must push for an ambitious international agreement on climate change. Engaging with EU trading partners is a key success factor towards such agreement.

SOURCE: BP, World Bank, EC-JRC

ENERGY & CLIMATE


Alberta Manitoba

Ontario

Iceland

Oregon

California RGGI

QuébecWashington

New Zealand

Mexico

Chile

Brazil

Rio de Janeiro

South Africa

Thailand

China

KazakhstanUkraine

Turkey

EU

JapanUK

France

Denmark

Sweden

São Paulo

BritishColumbia

Carbon tax implemented or scheduled for implementation

ETS implemented or scheduled for implementation

ETS or carbon tax under consideration Carbon tax implemented or scheduled, ETS under consideration

ETS and carbon tax implemented or scheduled

ETS implemented or scheduled, tax under consideration

Tianjin

Hubei

Chong-Qing

Rep. Korea

Kyoto

Tokyo

SaitamaBeijing

Shanghai

Shenzhen

Guangdong

SwitzerlandSlovenia

Portugal

Ireland PolandLatvia

Estonia

Finland

Carbon pricing systems worldwide Different concepts of carbon pricing systems are developing worldwide. The existing prices vary significantly from less than 1 to 130 USD/tCO2e. However, 85% of emissions are priced at less than 10 USD/tCO2e.

Carbon pricing mechanisms are a basic tool to promote the most efficient clean technologies, but essential provisions have to be aligned to avoid distortions of competition.

SOURCE: World Bank Group

ENERGY & CLIMATE


Investment in public telecommunication in the US and main EU economies 2013

US$

per

cap

ita

300

250

200

150

100

50

00

PolandGermanySpainItalyUKFranceOECD averageUS

$276

$162$146

$131 $131

$113$104

$71

In main European economies, investments in public telecommunication infrastructure are below the US and OECD average.

SOURCE: OECD

Public and private investments in telecommunication infrastructure are essential for the deployment of digital economy. Market consolidation in Europe is needed to keep up with global competitors.

DIGITAL ECONOMY

Telecommunication infrastructure


M2M /embedded mobile cellular subscriptions: Top OECD countries 2014

BelgiumNorwayNetherlandsKoreaGermanySwedenItalyFranceJapanUS

Num

ber i

n m

illio

n un

its

35

30

25

20

15

10

05

00

The “Internet of Things” as measured by the number of M2M SIM cards in use, is quickly expanding. Scandinavian countries are particularly well positioned (per capita). However, with more than 30 million units used, the US takes the lion’s share.

SOURCE: OECD

Given the huge potential of connected machines, including for the Industrial Internet, and the speed of technological changes, urgent policy measures are needed in the EU.

DIGITAL ECONOMY

Machine-to-Machine communication


30

20

25

15

05

10

0

%

ICT-related patents under PCT* (Top OECD countries and EU) 2010-2012

EU-28

*PCT: Patent Cooperation Treaty

World ICT-related patents:

217,042

NetherlandsCanadaSwedenUKFranceGermanyKoreaChinaJapanUS

ICT-related patents reflect the important role of ICT innovation in the digital economy. As reflected by other patent-related indicators, most EU countries are lagging behind other economies, including in the ICT sector. This reflects the lower portion of R&D investment in this area (e.g. compared to the US and Japan).

SOURCE: OECD

Urgent action is needed at EU level to enable the digitisation of the European economy, in particular to encourage R&D investments in ICT.

DIGITAL ECONOMY

ICT-related patents


0

5

10

15

20

25

30

35

40

Devices online (Top 10 OECD countries) 2015

Denmark Switzerland US Netherlands Germany Sweden Spain France PortugalKorea

UK 13.0

Italy 10.2

Japan 8.2

Poland 6.3

China 6.2

Other countries of interest

Num

ber p

er 10

0 in

habi

tant

s

With the digitisation of the economy, the number of devices connected to the internet (i.e. with an individual IP address) is increasing. However, some countries like Korea, Denmark or Switzerland are much more “connected” than others. Important differences can also be observed within Europe.

The expected global boom of connected devices will make the “Internet of Things”. For this to become a reality, strong telecommunication networks are necessary.

SOURCE: OECD

DIGITAL ECONOMY

Devices online


% 02 04 06 08 10 12 14 16

EU (28) (average) 52 5,1Canada 2 98,82 1China 128 77,43 11Hong Kong SAR, China 8 96,38 3India 158 68,42 11,9Israel 53 90,54 5Japan 83 86,21 8Korea, Rep. 17 94,36 3Mexico 67 88,85 6Russian Federation 34 92,17 4,4Singapore 6 96,48 3Switzerland 69 88,42 6Turkey 79 86,86 7United States 46 91,22 6

UK5.1

US6.0

China11.0

Israel5.0

Japan8.0

Korea3.0

EU-284.9

Cost (% of income per capita)Number of procedures required Paid-in minimum capital (% of income per capita)

UK

Ireland

Lithuania

Lowest cost:

Hungary

Slovenia

Germany

Highest cost:

Cost of starting a business and the number of procedures involved

SOURCE: World Bank Group

Although the cost of starting a business (fees and capital) is particularly low in some EU Member States (UK, Ireland, Lithuania) and comparable to the US, on average such cost remains much higher in the EU than in other key economies.

Efforts should be made by policy makers to ensure that the EU develops the start-ups scene required to enter in the digital economy era.

DIGITAL ECONOMY

Fostering start-ups development


Venture capital investments top 10 countries (flows, % GDP 2014)

%

0.45

0.40

0.35

0.30

0.25

0.20

0.15

0.10

0.05

0.00

Israel US Canada Sweden Korea Finland Ireland Japan UKSouth Africa

France 0.03

Germany 0.02

Spain 0.01

Italy 0.00

Other countries of interest

SOURCE: OECD

DIGITAL ECONOMY

Venture capital investmentsWith the exception of Israel and the US where venture capital markets are well developed, in other countries only a very tiny proportion of GDP is used to support entrepreneurship.

The absence of a genuine EU capital market remains an obstacle for the development of Europe based start-ups.


Unemployment rates 2014

NODE

7.8

5.0

9.7

5.6

AT

15.5

5.9

LU

19.0

6.1

CZ

21.1

6.1

UK US OECD

Youth Unemployment Total Unemployment

15.5

6.2

16.2

7.3

DK

13.1

6.6

EE

17.9

7.4

NL

7.4

11.0

SE

8.0

23.6

FI

8.7

20.0

SI

9.7

21.6

EU-28

23.5

10.2

IE

11.3

29.6

IT

12.7

40.0

ES

24.4

55.5

GR

26.5

58.3

9.2

3.5

SK

13.2

33.6

PT

13.9

38.1

FR

10.3

23.9

PL

9.0

27.3

BE

8.5

23.7

HU

7.7

26.6

0

10

20

30

40

50

60

%


Europe’s unemploymentOn average, almost a quarter of the economically active population in the EU younger than 24 was without a job in 2014.

SOURCE: OECD

Youth employability is essential to secure and improve Europe’s innovation and growth in an ageing society.


7,200,000

7,000,000

2013 2014 2015 2016 2017 2018 2019 2020

7,400,000

7,600,000

7,800,000

8,000,000

8,200,000

8,400,000

8,600,000

8,800,000

9,000,000

Jobs total Total potential demand

7,325,000

7,594,000

8,809,000

Gap: 825,000

7,984,000

Digital jobs: vacancies and graduatesBy 2020, Europe might face a shortage of 825,000 ICT professionals.

SOURCE: EC and EMPIRICA

To embrace the full potential of the digital economy, ICT skills are needed in Europe. This will benefit not only the industry but also growth and innovation in almost all sectors of the EU economy.



Mathematics, reading and science mean score of 15-year-olds 2012

450

470

490

510

530

550

570

590

610

630

SpainItalyUKFranceGermanyKorea Chinese Taipei

HongKongChina

Singapore ShanghaiChina

Mathematics Reading Science

< 5 T O P A C H I E V I N G C O U N T R I E S M A I N E U C O U N T R I E S ( P E R G D P ) >

OECD average

Education performanceThe top 5 performers in mathematics, reading and science (average score at the PISA test) are all situated in Asia.

No student should leave school without a basic set of STEM and ICT skills, which are essential to operate in a fully digitised information society.

SOURCE: OECD



EnergyTrade Balance Manufacturing Services Agricultural

Net imports and exports in key sectors (€Billions)

2005

2014

2005

EU (USD) USA (USD) 2005 2014 2005 2014Services 51,8 150,1 44,3 131,1Manufacturing 127,1 351,5 -420,5 -456,6Agricultural -4,4 17,7 3,5 24,9Energy etc. -228,1 -333,5 -212,8 -116,2Trade balance (€) -59,3 101,5 -617,4 -547,8Trade balance ($) -73,7 134,8 -767,5 -727,2

-800 -600 -400 -200 0 200 400 600

-547.8Bn

-617.4Bn

-59.3Bn

+101.5Bn

2014

SOURCE: EC, OECD, US Government, CBS

Besides bringing revenue, international trade also contributes to millions of jobs in the EU. Therefore the EU and Member States should remain committed to international negotiations in view of reaching effective agreements for trade, energy and climate issues.

TRADE & INVESTMENT

Structure of EU trade balanceThe EU trade balance is strong thanks to a large surplus in manufactured goods and in commercial services (2014). However, Europe is also increasingly relying on energy imports. By contrast, the US, (our main commercial partner), although remaining a heavy importing economy, has reduced their energy imports (partly due to the shale gas reserves).


23

Total global trade in goods and services 2004 | 2014*

% Share of world trade: 2004 | 2014*

*Estimates

19.516.5 17.5

13.8

7.6

13

7.6

EU-28 US China

2004

2014

€13.7 Trillion

€28.4 Trillion

SOURCE: Eurostat

Facilitating market access, the elimination of trade and investment barriers and adherence to a rules-based global trading system are crucial to strengthen the EU economy and to remain globally competitive.

EU share of global exportsThe EU remains the main trading power. However, over the last decade, its share of global trade has decreased (like the US and other advanced economies), while China has become a significant actor.

TRADE & INVESTMENT


200

€Bn

0

400

600

800

1,000

1,200

1,400

FDI inflows and outflows 2007 | 2014 FDI inflows FDI outflows

EU-28 Asia (East and South-East) US

SOURCE: UNCTAD

Europe’s capacity to attract investments is essential to its economic and technological development.

Foreign Direct InvestmentsThe global share of FDI flooding in and out of Europe and the US is following a downward trend. The significant decline in Europe has followed the crisis in 2007.

TRADE & INVESTMENT


Distribution of producing countries in percent 1995 | 2012

China 60.1%

China 86.8%

India - 3.4% Brazil - 0.5% Malaysia - 0.6% FSU* - 7.5% Others - 0.2%

US - 6.4% India - 2.6% Australia - 3.7% Others - 0.6%

US 27.8%

1995

2012

*FSU : Former Soviet UnionSOURCE: UNCTAD

Since rare earth elements, and raw materials in general, represent the lifeblood of today’s industry and given the high concentration of production in a few third countries, political efforts should be maintained to secure the supply to EU industry at competitive terms.

Rare earth in the modern economyOur modern economies make use of a wide spectrum of technology metals, including rare earth elements. They have gained an increasing strategic importance for the ICT and defence industries and for the green economy.

TRADE & INVESTMENT


-5

0

5

10

15

20

25

%

-10

Average annual change (%) per region*

*calculated for 38 ERT companies representing a total of 77% of total revenue of ERT companies

EuropeRest of the World

2011 20142012 2013

€1,693 Bn €1,823 Bn €1,654 Bn€1,710 BnTotal annual revenue*

SOURCE: ERT

RevenueFINANCIAL KPI’S

On average, the revenue growth generated by ERT Member companies has slowed down since 2012. In Europe, it was even negative for two consecutive years while a rebound could be observed outside Europe in 2014.


0

50

100

150

200

250

2010 2011 2012 2013 2014

Total EBIT of ERT Member companies

EBIT as % of total revenue 10.7% 11.0% 8.7% 9.6% 8.9%

€208Bn

€237Bn

€202Bn€212Bn

€191Bn

SOURCE: ERT

The total EBIT generated by ERT Member companies has recovered from the economic crisis. However, for many companies, international competition has increased, thus affecting their operational earnings. In terms of revenue share, EBIT has also decreased compared to the 2010 level.

EBITFINANCIAL KPI’S


2010

€40Bn

2011

€49Bn

2012

€53Bn

2013

€54Bn

2014

€55Bn

R&D expenses as % of total

revenue2.1% 2.2% 2.3% 2.5% 2.6%

60

50

40

30

20

10

0

R&D expenses of ERT Member companies

SOURCE: ERT

Around €50 billion are invested each year by ERT industries in R&D. This amount even shows a steady increase on a yearly basis, in spite of increasing pressure on their revenue. For many European companies, growing global competition requires them to invest more and more in R&D to stay competitive.

R&D expensesFINANCIAL KPI’S


EU COMPETITIVENESS IMF: World Economic Outlook, 2012-2015OECD data: Gross domestic spending on R&D, 2015OECD Library: Main Science and Technology Indicators, 2015The World Bank: GDP per capita, 2015OECD data: GDP per hour worked, 2015WEF: The Global Competitiveness Report, 2015-2016OECD Stat: Patents by technology, 2015OECD Stat: Growth in GDP per capita, productivity and ULC, 2015The World Bank: World Development Indicators, 2015The Economist: Tightening grip - Rising Chinese wages will only strengthen Asia’s hold on manufacturing, 14 March 2015European Central Bank Statistical Data Warehouse: Estimated MFI loans to NFCs by economic activity, 2015Eurostat: General government gross debt, 2015 BRUEGEL: Capital Market Union, A vision for the long term, April 2015

ENERGY & CLIMATEEuropean Round Table of IndustrialistsBP: Statistical Review of World Energy, 2015The World Bank DatabaseJoint Research Center EDGAR: CO2 time series 1990-2013 per region/country, 2015 World Bank Group: Carbon pricing watch, 2015The World Bank Group: State and Trends of Carbon Pricing, September 2015

DIGITAL ECONOMYOECD: Digital Economy Outlook, 2015World Bank Group: Starting a business, 2014OECD: Entrepreneurship at a Glance, 2015

EMPLOYMENT, SKILLS & EDUCATIONOECD: Unemployment rate, 2015OECD: Youth unemployment rate, 2015European Commission and EMPIRICA: e-Leadership in Europe, Demand and supply forecasts (2015-2020), June 2015OECD: Pisa 2012 Results in focus, 2012

TRADE & INVESTMENTEuropean Commission: European Union trade in the world: index, 2015USDA: US Agricultural Trade, 2015OECD Stat: International Trade balance (MEI), 2015United States Census Bureau: US International Trade Statistic, 2015Eurostat: Trade in goods, by main world traders, 2015UNCTAD: World Investment Reports 2012 and 2015UNCTAD: Commodities at a glance - Special issue on Rare Earth n°5, 2014

Bibliography & Glossary

SHORT FORM ISO COUNTRY IDENTIFIERS

EU COUNTRIES OTHER COUNTRIES

Belgium BE

Bulgaria BG

Czech Rep. CZ

Denmark DK

Germany DE

Estonia EE

Ireland IE

Greece GR

Spain ES

France FR

Croatia HR

Italy IT

Cyprus CY

Latvia LV

Lithuania LT

Luxembourg LU

Hungary HU

Malta MT

Netherlands NL

Austria AT

Poland PL

Portugal PT

Romania RO

Slovenia SI

Slovakia SK

Finland FI

Sweden SE

UK UK

Japan JP

Norway NO

US US


ERT Members

Jean-Paul Agon L’Oréal

César Alierta Izuel Telefónica

Paulo Azevedo SONAE

Ben van Beurden Royal Dutch Shell

Kurt Bock BASF

Jean-François van Boxmeer Heineken

Carlo Bozotti STMicroelectronics

Svein Richard Brandtzaeg Norsk Hydro

Antonio Brufau Repsol

Ton Büchner AkzoNobel

Paul Bulcke Nestlé

Jean-Pierre Clamadieu Solvay

Iain Conn Centrica

Ian Davis Rolls-Royce

Rodolfo De Benedetti CIR

Pierre-André de Chalendar Saint-Gobain

Marijn Dekkers Bayer

SECRETARY GENERALBrian Ager

CHAIRMANBenoît Potier - Air Liquide

VICE-CHAIRMEN Nils S. Andersen - A.P. Møller-Maersk

Vittorio Colao - Vodafone Group

Claudio Descalzi Eni

Henrik Ehrnooth KONE

John Elkann FCA

Christoph Franz F. Hoffmann-La Roche

Ignacio S. Galán Iberdrola

Zsolt Hernádi MOL

Heinrich Hiesinger ThyssenKrupp

Timotheus Höttges Deutsche Telekom

Frans van Houten Royal Philips

Pablo Isla Inditex

Leif Johansson Ericsson

Joe Kaeser Siemens

Jacek Krawiec PKN Orlen

Bruno Lafont LafargeHolcim

Thomas Leysen Umicore

Bill McDermott SAP

Nancy McKinstry Wolters Kluwer

Gérard Mestrallet ENGIE

Lakshmi N. Mittal ArcelorMittal

Dimitri Papalexopoulos Titan Cement

Jan du Plessis Rio Tinto

Patrick Pouyanné TOTAL

Norbert Reithofer BMW Group

Stéphane Richard Orange

Kasper Rorsted Henkel

Güler Sabanci Sabanci Holding

Risto Siilasmaa Nokia

Tony Smurfit Smurfit Kappa Group

Ulrich Spiesshofer ABB

Carl-Henric Svanberg BP

Johannes Teyssen E.ON

Jacob Wallenberg Investor AB


step

hens

on d

esig

n.eu

European Round Table of Industrialists Place des Carabiniers 18A Karabiniersplein I B-1030 Brussels

Tel. +32 2 534 31 00 I www.ert.eu I @ert_eu I [email protected]


Economy & Finance

EU Competitiveness Bench marking Report 2015