Real economy: IT sector, cluster development and value chain integration

Transcription

1 Real economy: IT sector, cluster development and value chain integration Bucharest, 11 April 2018 Stefanos Kotoglou, European Commission, DG CNECT Frank Siebern-Thomas, European Commission, DG GROW

2 Real economy Context & key messages buyoant economic growth and strong productivity growth, mainly driven by consumption and total factor productivity, and based on a dynamic start-up ecosystem, a solid IT infrastructure and rapid development of the ICT sector. need to ensure continuity and predictability of reforms to improve the economy s resilience and support Romania s transformation to a higher value-added economy, against the background of labour and skill shortages, limited skill anticipation/forecasting capacities and need to strengthen skills, vocational education and training in line with fast-changing needs of the economy; lack or poor quality of infrastructure considered as key barrier to investment, with businesses (also in ICT sector) seeing investment in infrastructure and education/upskilling as the main priorities for public spending modest innovation performance; very low R&D investment; few high-growth businesses other weaknesses of business environment.

3 Real economy Competitiveness & export performance Export performance has been strong and main export industries have gained significant market shares within these industries (notably machinery, vehicles and business services incl. ICT). In , the increase in real compensation was broadly in line with that of labour productivity. Since 2016 it has accelerated, with potential risks to cost competitiveness unless accompanied by structural reforms sustaining a transition to higher value-added products, integration in global value chains and access to new export markets. Despite the strong growth of labour and total factor productivity and real convergence, overall productivity levels continue to be the second lowest in the EU. Moreover, poor infrastructure and inefficient public spending on infrastructure may hamper further improvements in export performance of high-tech exporters. Non-cost competitiveness has improved, and shown quality gains: In , the share of top quality products in total export values increased by almost 50%.

4 Competitiveness & export performance Export value shares by quality category, manufacturing ,40 0,30 0,20 0,10 Notes: A rank of 1 reflects the highest quality in the EU market for a particular 'country of originproduct', while 0 corresponds to the lowest quality (manufacturing exports to the EU-28 are proxied by EU-28 imports) 0,00 bottom ( ) low ( ) middle ( ) high ( ) top quality ( ) Source: European Commission based on Comext and Orbis

5 Competitiveness & export performance Export market shares by country, Bulgaria UK Czech Rep. 1 Hungary Poland 0 Spain MarketDynamism(ps) Turkey Germany France Italy Notes: The size of the bubbles indicates the weight of the trade partner in Romaniaʼs total exports ʼMarket dynamismʼ stands for the difference between the annualised growth rates of world imports per geographical market and global world imports. ʼCompetitivenessʼ stands for the difference between the annualised growth rates of Romaniaʼs exports per market and world imports per market. Source: European Commission Competitiveness (pps)

6 Real economy Value chain integration Strong integration in EU value chains: Romania has captured an increasing part of trade related to EU production chains. Increasing specialisation in (regional) EU value chains: For Romania, the share of regional value chain integration has continued to grow more strongly, particularly in manufacturing and business services, in contrast with the general trend. Since 2011, global value chain trade intensity has decoupled from the evolution of regional EU value chain developments, notably for advanced manufacturing and business services, with global value chain trade now accounting for more than half of all value chain trade.

7 Value chain integration Evolution of regional and global value chain trade intensities in Romania and the EU, ,0% 15,0% 14,0% ( 13,0% 12,0% 11,0% 10,0% 9,0% 8,0% RO (GVC) RO (RVC) EU (GVC) EU (RVC) Notes: RVC/GVC indicate the share of regional EU value chain trade (RVC) and global value chain trade (GVC), respectively, as a % of total value added trade in the total economy Source: Stehrer et al. (2017) based on World Input-Output Databse release 2016

8 Real economy Cluster development and spill-overs (ICT cluster development in West Romania) vibrant ICT developers community and dynamic development of clusters in ICT and advanced manufacturing in the capital region and West Romania, starting to show spill-overs in high-tech products and start-ups concentrated in specific sectors such as automotive, advanced packaging, logistics services and mobility technologies, and fields such a big data, 3D printing, ICT services and software development. alignment of regional development and smart specialisation strategies, identifying ICT as the most relevant key enabling technology of the region and supporting ICT cluster development, diversification towards advanced manufacturing and higher valueadded production techniques and development of cross-sector technological capabilities (incl. through KET technology centres). close partnerships between technical universities and companies; joint trainings, research projects and curricula development. Sources: Eurofound (2017), Future of Manufacturing: Developing regional industrial policy capacity, Regional case study on West Romania; European Cluster Observatory

9 Real economy: IT sector Bucharest, 11 April 2018 Stefanos Kotoglou, European Commission, DG CNECT

10 Digital in Romania ICT contributes 6-7 % to Romania's GDP and the digital sector is growing, with two major hubs in Bucharest and Cluj and important ICT investments also in other cities. Slow progress over the last years, especially in digital skills and the digitisation of the economy. Romanians are benefiting from ultrafast broadband, but broadband networks are underdeveloped in rural areas, with risk of digital exclusion.

11 Digital dimensions 1. Network connectivity 2. Digital skills 3. Digitisation of the economy 4. egovernment

12 Network connectivity Levels of fixed broadband coverage remain low (88,1%), while the EU average is 97%. Rural standard fixed broadband is one of the lowest in EU (82,7%), while EU average is 92%. For addressing the urban-rural digital divide, 120 million are earmarked from the European Regional Development Fund (ERDF) and the European Agricultural Fund for Rural Development (EAFRD). Ultrafast take-up is one of the highest in Europe (43,8%, second after Sweden with 48%), while the EU average is 15%.

13 Network connectivity Fixed broadband coverage

14 Network connectivity The highest ultrafast broadband take-up in the EU

15 Digital skills Romania shows little progress, with only 2% of employed individuals working as ICT specialists. The number of STEM students has doubled over the last few years, but the number of teachers has remained the same. There is a significant mismatch between what the market requires and what universities are delivering. Only about 20% of the market needs are currently covered. The provision of ICT training at firm level remains low.

16 Digital skills Comparison by skills level

17 Digital skills Enterprise provided training to develop/upgrade ICT skills, 2016 Source: European Commission (Eurostat), ICT usage survey

18 Digitisation of the economy Romania is not progressing, recording a drop of 4% compared to 2016, while the EU average is increased by 9%. ecommerce turnover for SMEs (5,2%) has not been significantly increased compared to 2016, with the EU average at 10,3%.

19 Digitisation of the economy Digital intensity score for enterprises Source: European Commission based on Eurostat data Key indicators tracking digitisation processes for 2017 % Romanian SMEs Variation 2017 Difference with EU and 2015 average Having a web site or homepage 44% 0% -32% access to ICT specialist skills 46% 2% -18% Website has some interactive functionalities 43% 0% -15% Use any social media 34% 10% -12% >50% of the persons employed use computers & Internet 17% -1% -22% fastest broadband connection is at least 30 Mb/s 42% 9% 5% have ERP software package to share information 16% Not comparable -17% use Customer Relationship Management (CRM) 13% Not comparable -20% >20% of workers with portable devices for business use 16% 5% -16% selling online (at least 1% of turnover) 8% 0% -9% share electronically supply chain management data 6% -3% -11% Exploit B2C ecommerce 5% 0% -3%

20 egovernment Romania's performance is well below the EU average, but with progress compared to last year. Romania has advanced mainly on the supply side by increasing the number of services which can be completed online. In the current competitive environment, the Romanian public administration has difficulties in attracting and retaining ICT specialists that can develop efficient Digital Public Services.

21 egovernment Individuals interacting with Public Authorities 91,7% 57,4% 12,6%

22 Real economy: open issues and conclusions Thank you for your attention. Bucharest, 11 April 2018 Stefanos Kotoglou, European Commission, DG CNECT Frank Siebern-Thomas, European Commission, DG GROW

23 Real economy additional slides Bucharest, 11 April 2018

24 Context & main messages Business environment: SBA profile 2017 Source: European Commission, SBA Factsheet 2017

25 Context & main messages Business environment: SBA profile 2017 Source: European Commission, SBA Factsheet 2017

26 Competitiveness & export performance Total factor productivity, (2000=100) Total factor productivity (2000=100) Source: European Commission, Ameco

27 Value chain integration Illustration of Romania s involvement in RVCs and GVCs source of value added immediate production partner ( ultimate production partner final destination Romania France Russia Norway Germany Switzerland Russia Finland Canada Hungary China Italy Switzerland Germany Turkey Source: Stehrer et al. (2017) based on World Input-Output Databse release 2016

28 Value chain integration Evolution of regional and global value chain trade intensities by sector, ( ) RVC/GVC indicate the share of regional EU value chain trade (RVC) and global value chain trade (GVC), respectively, as a % of total value added trade in the total economy Source: Stehrer et al. (2017) based on World Input-Output Databse release