International sourcing project in 14 EU and EEA countries Pekka Alajääskö, Peter Boegh Nielsen and Samuli Rikama

1. International sourcing project in 14 EU and EEA countriesPekka Alajääskö, Peter Boegh Nielsen and Samuli Rikama Catching the butterflies WORKS expert workshop on innovative methodologies for measuring employment effects of value chain restructuring 13 March 2008 - Leuven

2. Plan for the presentation • Background, objective and scope of the International sourcing survey • Survey coverage and target population • Draft questionnaire and its structure • Goals achieved and road ahead International sourcing project in 14 EU and EEA countries

3. Background, objective and scope • The phenomenon has a variety of labels and terms such as • off-shoring • delocalisation • outsourcing • insourcing • The somewhat generic heading of “international sourcing” is used in this project because it serves rather well • the need for a strict definition in terms of location • a less restrictive definition concerning the control aspect International sourcing project in 14 EU and EEA countries

4. Background, objective and scope • While manufacturing activities are independent of the location of production, majority of service functions requires a proximity to markets and clients • The international sourcing of services as a business strategy is being facilitated by information and communication technology and networks • Another significant facilitator is the increased globalisation within services markets as a consequence of market deregulation and trade liberalisation International sourcing project in 14 EU and EEA countries

5. Background, objective and scope • Objective of the project is to provide policy makers at national and European level with relevant statistical evidence and information about international sourcing • the impact on the competitiveness • motivations and perceived benefits • barriers met • consequences on employment • An operational survey tool and a methodology has been developed International sourcing project in 14 EU and EEA countries

6. Background, objective and scope CONTROL LOCATION: Within the compiling country Abroad International sourcing project in 14 EU and EEA countries

7. Background, objective and scope • The survey focuses on the relocation of a domestic or domestically sourced production to abroad • The definition used for international sourcing is strict in terms of location as it is limited to events replacing domestic (or domestically sourced) with foreign production • It is less restrictive concerning control as the definition includes all types of relocation of production of goods or services • to an affiliated enterprise abroad (all types) • contracted out to an external supplier abroad • all types of affiliated enterprises included International sourcing project in 14 EU and EEA countries

8. Survey coverage and target population • The survey on international sourcing is an economy-wide and linked to the Structural Business Statistics framework • The survey covers the so called non-financial business economy: • NACE sections C to I and K, • 14 NSIs of EU Member States and EEA countries participate • Statistics Denmark and Finland provide methodological support • Eurostat co-ordinates International sourcing project in 14 EU and EEA countries

9. Survey coverage and target population • The focus of the survey is on the large enterprises and international enterprises are considered to be key players • In terms of employment size class a relatively high threshold is established: • 100 or more persons employed • some countries covered size classes 50 - 99 or even 20-49 persons employed for sectors more likely to carry out international sourcing • The statistical unit is the one used in the SBS framework, i.e. enterprise International sourcing project in 14 EU and EEA countries

10. Draft questionnaire and its structure • The questionnaire is designed as a general survey tool in order to survey all economic activities • The core of the questionnaire is based on a qualitative approach, which is considered to be the most useful basis for providing harmonised data across the participating countries • An important feature of the survey is the split of the enterprise activities into a number of business functions: • core business function of the enterprise, being a manufacturing or service • a number of support business functions International sourcing project in 14 EU and EEA countries

11. Draft questionnaire and its structure • The survey consists of 6 modules: • Modules 1 and 2 collect background information together with some general aspects of international sourcing for all enterprises • Focus of the survey is on the module 3: international sourcing of enterprises already engaged in international sourcing • Information about the international sourcing plans of enterprises with no sourcing is asked in module 4 • In module 5 entreprises engaged in or with plans for international estimate expected impact on employment • Question on barriers related to international sourcing in module 6 is aimed at all enterprises International sourcing project in 14 EU and EEA countries

12. Draft questionnare and its structure 2. What types of functions has your enterprise sourced in the period 2001-2006? (Tick all that apply) International sourcing project in 14 EU and EEA countries

13. 5. Please give your best estimate of the number of jobs lost and created within the enterprise 2001-2006 domestically as an impact of the international sourcing activities 11. Please estimate the expected impact on employment in your enterprise in 2007-2009 due to international sourcing  (tick-mark once on each line) International sourcing project in 14 EU and EEA countries

14. 7. Please evaluate the impacts of the international sourcing activities 2001-2006 for your enterprise (Tick-mark once on each line) Draft questionnare and its structure International sourcing project in 14 EU and EEA countries

15. 12.Please assess the importance of the following barriers when considering or carrying out international sourcing (Tick-mark once on each line) International sourcing project in 14 EU and EEA countries

16. Goals achieved and road ahead • Czech Republic, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Norway, Portugal, Slovenia, Spain, Sweden and the United Kingdom participate in the survey • The methodological reports show that the surveys have been quite successful: high response rates, enterprises received the questionnaire well and had no big problems in responding to different questions etc. International sourcing project in 14 EU and EEA countries

17. Goals achieved and road ahead • In 6 out of 14 countries the survey was totally or partly mandatory • Five countries used paper and electronic (web) formats, one country only web format and rest traditional paper one • Definitions were part of the questionnaire and cover letters were used to inform about the background of the survey and motivate enterprises to fill in the questionnaire • Eurostat is currently treating the data and plans to disseminate the survey results during the second quarter of 2008 International sourcing project in 14 EU and EEA countries