Академический Документы
Профессиональный Документы
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Issue 7 / 2015
06 October
Integration of Products
and
Services
Taking the Single Market into the 21 Century
st
Three factors combine to reshape the foundations of the modern economy. First, the digital revolution
dramatically augments the reach, flexibility and agility of companies, big and small, creating new economic
actors, such as micro-multinationals: technology-intensive companies that are born global. Second,
international competition draws millions of new workers and consumers into what is increasingly a race
to the top, rather than a race to the bottom, with emerging countries becoming champions of innovation,
engineering ingenuity and skills acquisition. Third, cultural and structural trends change the nature of
socio-economic interactions by transforming peoples aspirations and preferences, such as the expectation
of instant gratification offered by one-click services or the seamless interoperability between products and
electronic devices.
Introducing the
Interoperable Economy
EPSC Strategic Notes are analytical papers on topics chosen by the President of the European Commission. They are produced by the European Political
Strategy Centre (EPSC), the European Commissions in-house think tank.
Disclaimer
The views expressed in the EPSC Strategic Notes series are those of the authors and do not necessarily correspond to those of the European Commission.
A Hyperconnected Economy:
The New Landscape
Sweden
India
United States
Slovenia
Estonia
Russia
Cyprus
Luxembourg
Norway
Czech Republic
Greece
Lithuania
Germany
Slovakia
Latvia
Italy
Malta
France
Poland
Portugal
Ireland
Belgium
Denmark
United Kingdom
Brazil
Finland
Romania
Bulgaria
Austria
China
Spain
Hungary
Croatia
Netherlands
Iceland
Switzerland
0
Manufacturing
Services
80
60
40
Germany
France
Italy
Finland
United Kingdom
Sweden
Slovenia
Austria
Belgium
Hungary
Netherlands
Denmark
Czech Republic
Spain
Slovak Republic
Poland
Estonia
Portugal
Norway
20
1995
10
15
2011
20
25
30
35
40
45
Technological Revolution
The internet and digital communications are general
purpose technologies, transforming economies as
profoundly as the printing press, steam engine or
electricity have done in the past. Against this backdrop,
it is important to understand that there is no such
thing as a digital economy the economy
is digital. Far from being the exclusive domain of
technology startups, every company, particularly in
traditional industries, needs to prepare for digitisation.
Yet, on balance, European companies have been slow to
adapt: 41% of enterprises are still classifiable as nondigital meaning they do not use digital technologies
and have no digital strategy while only 2% take full
advantage of digital opportunities.3
Competition in the
Higher Value-Added Segment
2013
5%
3%
4%
2%
2%
5%
9%
20%
11%
33%
8%
17%
11%
4%
23%
OECD EU
China
United States
Other Asia and Oceania
Japan
3%
23%
17%
Other OECD
South and Central America
Other Europe
Africa
14
Computer and
electronic products
12
10
8
Apparel and
leather products
Miscellaneous
manufacturing
6
4
Transport
equipment
2
0
-2
-4
-10
-8
-6
-4
-2
0
2
4
Change in business services intermediate inputs
Implications:
Disrupt or Be Distrupted
From Static to Interactive
The fusion of product and service markets will continue
to have a profound impact. The world economy will
move from static products and services to smart
and interactive ones. This means that new ways need
to be explored with respect to the design and labelling
of products. Products are becoming smarter, more
capable of autonomously addressing and responding
to evolving consumers needs. Smart coffee machines,
for example, have built-in sensors that automatically
signal to the local brand store the need for repair. The
user therefore does not only purchase a product a
coffee machine but also a service, the promise of
maintenance whenever necessary.
4
134
Scientic R&D
17%
Computer soware
133
98
21
13
Advertising expenditure
56
33
Market research
Training
95
Organisational capital
194
Total
777
0
100
200
300
400
500
600
700
800
Source: INTAN-Invest
Policy Opportunities:
Walk the Talk and Fast
18%
Investment in KBC
16%
Investment in tangibles
14%
12%
10%
8%
6%
2011
2008
2005
2002
1999
1996
1993
1990
1987
1984
1981
1978
1975
1972
4%
Reshoring of Manufacturing
3D printing also referred to as additive
manufacturing could lead to reshoring or nearshoring
of industry, as it increases production speed while
reducing costs and meeting consumer demand with
more speed and greater influence over production. Both
can make production at or near headquarters cheaper
than production overseas. What it calls for are decisive
policy actions that incentivise technology adoption by all
corporate players competing internationally. The picture
will not be black or white, since reshoring will take
place alongside continued outsourcing and relocation
to emerging markets. However, the reshoring of some
high-end production processes is likely in connection
with building a stronger product-services nexus.
Develop Not-Easy-to-Replicate
Innovations
Adding sophisticated business services to advanced
manufactured goods leads to innovations that are not
easy to replicate by competitors and therefore gives
significant competitive advantage. In comparison,
it would be difficult to maintain such a competitive
advantage with a standard manufactured good void of
an additional service component. This story also plays out
8
Services
Manufacturing
-4
Canada
Portugal
Norway
Australia
Italy
Switzerland
Denmark
Greece
France
Sweden
Belgium
Austria
United Kingdom
United States
Germany
Hungary
Czech Republic
Netherlands
Estonia
Finland
Slovak Republic
Japan
-2
Luxembourg
Iceland
Spain
Slovenia
Ireland
Conclusion