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2014.04.30.I author: European Association of Development Agencies -

Business service sector

Business Services will play a central role in the reindustrialization of Europe, both through the provision of innovative and productive services to other firms, and through the servitization of manufacturing.

Three factors will drive this growth: (i) continued outsourcing by firms as they seek to focus on their core competencies; (ii) the servitization of manufacturing - the tendency for manufacturing firms to sell services and solutions, rather than products and goods; and (iii) general economic trends, where levels of employment in services tend to increase relative to manufacturing and agriculture, because of increased automation and productivity. The 4th industrial revolution - with increasing numbers of devices being connected to the internet - will further reinforce and accelerate these trends, creating a significant global opportunity. A critical question for Europe is how to drive further innovation and productivity gains in services so that Europe can capture a significant share of the global market opportunity and ensure a sustainable European society.


While the future opportunities for European Business Services are significant, the High Level Group identified three factors that should concern the European Commission. First, the Business Services market is fragmented - both within Europe and in terms of support provided by the Commission. This fragmentation creates challenges for the policy and business communities. Second, we are seeing rapid growth of indigenous Business Service firms in some of the highest growth markets – e.g. growth of consultancy and software firms in China and India. It is vital that European Business Service firms gain a foothold in these rapidly growing and high potential markets and they need support in doing so. Third – we are in the midst of a 4th industrial revolution, enabled by sensors, data, analytics and the internet5. Business Service firms of the future will play a crucial role in supporting industrial firms seeking to capitalize on the “internet of things” or “web 4.0”.


http://ec.europa.eu/enterprise/policies/industrial-competitiveness/industrial-policy/hlg-business-services/index_en.htm


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