Impact of the Enlargement of the European Union on Small and Medium-Sized Enterprises in the Union
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Rheinisch-W estfcilisches Institut fur Wirtschaftsforschung in Co-operation with European Policies Research Centre, University of Strathclyde Glasgow Impact of the Enlargement of the European Union on Small and Medium-sized Enterprises in the Union Final Report to the European Commission DG Enterprise Essen and Glasgow, November 2000 Research Team: Dr. Roland Dohm (RWI), project leader RWI Dr. Roland Dohm Dr. Antoine-Richard Milton Dr. Friederike Welter Matthias Peistrup (Research Assistant) EPRC Phil Raines Ewa Helinska-Hughes Rona Michie Fotoula Adrimi (Research Assistant) OIR Dr. Franz Delapina Dipl.-Ing. Herta Todtling-Schonhofer Mag. Gunter Eisenkolb (cartography) Universitat Autonoma Dr. Josep Llados de Barcelona Prof. Nestor Ouch Ramon Ribera (Research Assistant) Table of Contents Table of Contents ...................................................................................................................... i List of Tables ............................................................................................................................. v List of Figures and Maps ........................................................................................................ ix Executive Summary ................................................................................................................ xi Introduction ............................................................................................................................... ! 1. Impact of Enlargement on the Union .................................................................................. 4 1.1. Macroeconomic aspects ................................................................................................ 4 1.1.1 Growth perspectives in the EU ............................................................................ .4 1.1.2 Growth perspectives in the accession states ......................................................... 5 1.1.3. Growth effects of the enlargement ...................................................................... 7 1.2. Impact on trade in goods ............................................................................................... 9 1.2.1. General developments ......................................................................................... 9 1.2.2. Regional aspects ................................................................................................ 11 1.2.2. Sectoral aspects .................................................................................................. 14 1.3. Impact on trade in services .......................................................................................... 17 1.4. Impact on FDI ............................................................................................................. 19 2. SMEs in the international division of labour ................................................................. 24 2.1. SMEs on international markets: challenges and responses ......................................... 24 2.2. SMEs in international trade ......................................................................................... 26 2.3. SMEs and Foreign Direct Investment ......................................................................... 29 3. Small and medium-sized enterprises in the EU and enlargement .................................. 31 3 .1. Overview of enterprise structures in the EU ............................................................... 31 3.2. Sectoral analysis .......................................................................................................... 33 3.3. Types of effects on small and medium-sized enterprises ........................................... .37 3.4. "Sensitive" groups of small and medium-sized enterprises ....................................... .39 3.4.1. Opportunity groups ............................................................................................ 40 11 3.4.2. Risk groups ........................................................................................................ 43 3.5. Conclusions ................................................................................................................. 47 4. The impact of enlargement on SMEs - an assessment ....•...................................•.......... .49 4.1. Macroeconomic and sectoral effects .......................................................................... .49 4.2. SME specific effects .................................................................................................... 50 4.3. Regional effects ........................................................................................................... 51 4.3.1 Border region effects .......................................................................................... 51 4.3.2 Non-border region effects ................................................................................... 53 5. Policy recommendations ..................................................................................................... 54 5.1. EU policy context ........................................................................................................ 54 5.2. EU policy recommendations ....................................................................................... 58 Summary of Policy Options for the European Commission ..•............................................ 63 References .....•.......................................................................................................................... 64 Appendix A: Case studies ....................................................................................................... 68 Characteristics of the Case Study Regions .................................................................... 68 1 Bavaria .................................................................................................................................. 70 1.1. Reasons for the choice and the economic profile of the case study region ................. 70 1.2. The contribution of SMEs to economic development in Bavaria ............................... 72 1.2.1. The statistical database ...................................................................................... 72 1.2.2. Structure and development ofSMEs in Bavaria ................................................ 74 1.2.3. Employment in Bavarian SMEs ........................................................................ 79 1.3. Markets, exports and linkages ..................................................................................... 81 1.3 .I. Export behaviour in industry and the manufacturing sector.. ............................ 81 1.3.2 Exports and craft enterprises .............................................................................. 85 1.4. The regional view ........................................................................................................ 86 1.4.1. The regional distribution of the manufacturing industry, trade and services .... 86 1.4.2. Craft enterprises ................................................................................................. 87 1.5. The impact ofEU policies ........................................................................................... 88 1.6. Possible channels of an impact ofEU enlargement on Bavarian SMEs ..................... 91 1.6.1. Trade relations ................................................................................................... 91 1.6.2. FDI relations ...................................................................................................... 92 1.6.3. Competitive situation of Bavarian SMEs compared to producers in the potential new member states ....................................................................................................... 94 1.6.4. The impact ofEU enlargement on EU policies for Bavaria .............................. 95 1.7. Conclusions ................................................................................................................. 96 lll I. 7 .1. Opportunities or risks of the EU enlargement for the SME sectors .................. 96 1.7.2. Policy needs ofSMEs in the region ................................................................... 97 References .......................................................................................................................... 98 2. Austria's north eastern Border Regions ......................................................................... lOO 2.1. Description of the region ........................................................................................... ! 00 2.1.1. Economic development, growth and employment ......................................... .100 2.1.2 Structure of the region's economy by sector .................................................... 104 2.1.3 Austria's border regions in the 1990s .............................................................. .106 2.2. The contribution of SMEs to regional development ................................................ .! 06 2.2.1 Share of SMEs and Employment in SMEs in the region .................................. 106 2.2.2 Employment in SMEs ....................................................................................... l10 2.2.3 Markets, exports and linkages- a new situation in the 1990s .......................... 113 2.3. Possible channels of an impact ofEU enlargement on the region ............................ 116 2.4. Conclusions ..............................................................................................................