benchmarking report - European Round Table of Industrialists

BENCHMARKING REPORT 2015

Overview

Foreword – Europe at a glance 03 EU COMPETITIVENESS Economic growth 04 EU’s R&D intensity gap 05 EU-US competitiveness gap 06 Uneven competitiveness in the EU 07 Patent filings 08 Labour productivity vs labour cost 09 Industry production 10 Loan flows to non-financial firms 11 EU governments’ debt 12 ENERGY & CLIMATE Energy prices 13 Primary consumption by fuel type 14 Energy intensity & emissions 15 Carbon pricing systems worldwide 16

DIGITAL ECONOMY

FINANCIAL KPI’S

Telecommunication infrastructure 17

Revenue 30

Machine-to-Machine communication 18

EBIT 31

ICT-related patents 19

R&D expenses 32

Devices online 20 Fostering start-ups development 21

Bibliography and Glossary 33

Venture capital investments 22

ERT Members 34

EMPLOYMENT, SKILLS & EDUCATION Europe’s unemployment 23 Digital jobs: vacancies and graduates 24 Education performance 25

TRADE & INVESTMENT Structure of EU trade balance 26 EU share of global exports 27 Foreign direct investments 28 Rare earth in the modern economy 29

ERT BENCHMARKING REPORT 2015 | 2

FOREWORD

Europe at a glance

As Chairmen and CEOs of leading European multinationals, Members of the European Round Table of Industrialists (ERT) see the business world changing. Competitive pressure on European industries is increasing. If we are to lay the foundations of our future competitiveness and prosperity, Europe must offer an attractive environment for investment to maintain a vibrant and innovative manufacturing base in Europe, as well as to create jobs. Last year, ERT published Industrial Renaissance – ERT Agenda for Action 2014-2019, which called on political leaders to step up progress for the completion of the Single Market. It also presented key recommendations in all policy areas covered by ERT. The 2015 edition of the Benchmarking Report takes stock of the economic reality and tracks progress towards a competitive industry in areas identified as key for Europe: competitiveness, energy/climate, the digital economy, employment/skills and trade/investment. This report is also the opportunity to highlight – and be proud of – the strengths of the European Union which are recognised worldwide. The Union is indeed the first economic power in terms of trade. We are also a top economy in terms of wealth creation. Our work force is highly educated and skilled. Our sophisticated products and services are appreciated for their quality. Last but not least, we also benefit from political stability provided by democracy and rule of law.

It is of vital interest for Europe’s prosperity that the growth and strengthening of the European industrial base remain at the heart of the political agenda, both in Brussels and in Member State capitals. Industry remains the backbone of the European economy, notably in terms of exports and R&D. However, a certain number of imbalances could jeopardise our future. Markets and legal frameworks in Europe are still highly fragmented. Unemployment is high. We do not sufficiently invest in innovation and new technologies. Other regions of the world are already implementing strong industrial policies, including energy and competition policies that serve their strategic interests. Global competitors are rapidly expanding the digitisation of their economies, with increases in innovation and productivity expected to follow. As a result, growth is taking place outside Europe. Thus, European leaders need to take action to ensure that Europe stays a top business location. European climate policy should not jeopardise the competitiveness of the European industry and urgent measures are needed to enable the Internet of Things. We trust you will find this report useful. Yours sincerely, Kurt Bock

Chairman of the ERT Competitiveness Working Group Chairman of the Board of Executive Directors, BASF SE

December 2015


EU COMPETITIVENESS

Economic growth

Since economic growth is mostly taking place outside Europe and in particular in emerging countries, EU companies’ export and growth opportunities depend on the effective opening of those markets.

While the EU has been recovering from the 2012 slowdown, it is far from the levels of growth observed and forecasted in India, China or even the US.

Gross domestic product, volume (percentage change on preceding year) - 2010 | 2012 | 2014 12 10.6

10.3

10

8

7.8

7.6

5.1

6 4.7

4.5

4

3.4 2.5

2

7.3

7.3

2.0

2.1

2.2

1.5

0.9

2.4 1.8

0.6

0.1

0 -0.8

1.7

-0.1

-0.4

-2 %

Euro Area

2015

(Forecast)

1.5%

EU-28

Russia

US

Brazil

Japan

China

India

1.9%

-3.8%

2.6%

-3.0%

0.6%

6.8%

7.3%

SOURCE: IMF ERT BENCHMARKING REPORT 2015 | 4

EU COMPETITIVENESS

EU’s R&D intensity gap

Underinvestment in R&D hampers the long-term competitiveness and health of the entire EU industrial value chain.

China has now overtaken the EU in terms of R&D spending (as % of GDP). Only Finland, Sweden, Denmark and Austria have reached the EU2020 target (3%).

Gross domestic spending on R&D as a % of GDP 2010 | 2013 (top third countries and EU average) 5

Within the EU-28, only 3 countries comply with the EU2020 R&D target 2013

4

Finland : 3.3%

3

Sweden : 3.3%

2

Denmark : 3.1%

1 EU2020 R&D TARGET: 3% of GDP to be invested in R&D by 2020

0 %

Israel

Korea

Japan

US

China

EU-28

SOURCE: OECD ERT BENCHMARKING REPORT 2015 | 5

EU COMPETITIVENESS

EU-US competitiveness gap While being our main commercial partner, the US is also a more competitive economy, ahead of any EU country. Such competitiveness gap between the EU and the US translates into a persistent income gap.

Investing in innovation, in new technologies and implementing the EU Single Market are ways to gain a competitive advantage.

EU-28 (2014): GDP/capita: $36,317 GDP/hour worked: $50

US (2014): GDP/capita: $54,630 GDP/hour worked: $67

SOURCE: OECD, World Bank, WEF ERT BENCHMARKING REPORT 2015 | 6

EU COMPETITIVENESS

Uneven competitiveness in the EU

Structural weaknesses in the European economies should be tackled. Greater coordination and alignment of policies by the EU and its Member States with industrial objectives are needed.

Addressing Europe’s internal competitiveness gap is instrumental for increasing growth and jobs.

Global Positions

29

1-10 11-20 21-40 41-70 >70

8

9

10

5

Ranking top non-EU countries

4

1

Switzerland

2

Singapore

3

United States

6

Japan

7

Hong Kong

11

Norway

13 Canada 51

14 Qatar 15 Taiwan 16 New Zealand

SOURCE: WEF ERT BENCHMARKING REPORT 2015 | 7

EU COMPETITIVENESS

Patent filings

As shown by its decreasing share in total patent filings, the EU’s overall R&D position continues to decline thus weakening its competitiveness.

The ambitious R&D policies of China, Japan and Korea have led to bigger global shares of patent filings worldwide (PCT + EPO)*.

Country shares as a percentage of total patent filings 2007 | 2012 40 35

Patent filings in 2012:

325,905

30

(PCT+EPO)*

25 20 15 10 5 0 %

Switzerland

Netherlands

Italy

UK

South Korea

France

China

Germany

Japan

US

EU-28

* PCT: Patent Cooperation Treaty * EPO: European Patent Office SOURCE: OECD ERT BENCHMARKING REPORT 2015 | 8

EU COMPETITIVENESS

Labour productivity vs labour cost

Although key external competitors also see their labour costs increasing (including China), improving the EU’s labour productivity will remain crucial to ensure the EU’s competitive edge in a globalised economy.

Between 2004 and 2014, unit labour costs in the EU have in average increased faster than labour productivity.

Percentage change from 2004 to 2014

GDP per hour worked

Unit Labour Costs

4

3

2

1

0

-1 %

Euro Area

EU-28

Japan

Korea

US

SOURCE: OECD, The Economist ERT BENCHMARKING REPORT 2015 | 9

EU COMPETITIVENESS

Industry production

The 20% of GDP goal for the EU manufacturing sector must be respected and achieved through adequate policy measures (e.g. in the energy and climate change sector).

EU industry contributes to a quarter of wealth production and also plays an important role in terms of jobs and innovation. Wide differences throughout Europe can be observed, e.g. in Eastern Europe, the share of industry is still around a third of GDP. Nonetheless, in general it has faced a continuous decline (as measured below by manufacturing). Such trend can also be observed in other developed economies.

Gross value added by manufacturing (% GDP)

20%

16.8%

2000

2014

13.7%

-3.2% -6.3%

13.9%

%

Gap to EU target (20% of GDP)

Share of total industry in GDP (%)

2014

42.6% 23.7%

2014 2013

20.5%

SOURCE: EUROSTAT, WORLD BANK ERT BENCHMARKING REPORT 2015 | 10

EU COMPETITIVENESS

Loan flows to non-financial firms

In absence of sufficient funding from banks, an effective European capital market is needed, in particular for SMEs. Unintended consequences of regulations designed for the banking sector must also be avoided in order to not undermine industry capacity to invest in productive assets.

Non financial firms have been hit by the financial crisis in terms of access to capital. Total lending provided has not yet recovered from their 2007 levels. By contrast, loans to governments have followed a steady increase.

Euro Area lending to non-financial firms

Loans to governments versus to non-financial firms 5.0

4

4.5

3

200 180 160

4.0 2

140 3.5

1 3.0 0 2.5

120 100 80 60

-1

Loans & Securities General Government

2.0 40

-2

%

% change on a quarterly basis

Total loans in stock (€ trillion)

2014 Q1

2013 Q1

2012 Q1

2011 Q1

2010 Q1

2009 Q1

2008 Q1

2007 Q1

2006 Q1

2005 Q1

2004 Q1

2003 Q1

-3

1.5

1.0

20

Loans to Non-Financial Firms, Non-Government Securities

0 JAN 2005 = 100

JUL 2015

SOURCE: ECB, BRUEGEL ERT BENCHMARKING REPORT 2015 | 11

EU COMPETITIVENESS

EU governments’ debt

In some Member States, high government debt may endanger their capacity to fulfill their public service mission (education, infrastructure, social...) which could in the long term threaten their competitiveness , in particular when coupled with excessive deficits.

In 2014, government debt in the EU reached an average of 86.8% of GDP, i.e. 26.8% above the Maastricht criteria. Cyprus, Portugal and Spain also presented severe budget deficits (i.e. at least twice the 3% Maastricht target) while others (Germany and Estonia) managed to generate a surplus.

General gross government debt (% GDP)* 2011 | 2014

‘Maastricht Criteria’: debt-to-GDP ratio must not exceed 60%

180 160 140 120 100 80 60 40 20 0 %

NL

MT

DE

HU

SI

AT

HR

EU-28

UK Euro Area

FR

ES

BE

CY

IE

PT

IT

GR

*Only countries/areas above the threshold are represented

SOURCE: EUROSTAT ERT BENCHMARKING REPORT 2015 | 12

ENERGY & CLIMATE

Energy prices In general, industrial consumers in Europe pay higher electricity and gas prices than in other regions of the world. Individual policy decisions have become an important driver of price gaps within the EU thus also contributing to an increasing price differential with other economies.

Access to energy sources at a competitive price is key for Europe’s industry. Policy measures should consider the impact on energy prices so as not to enlarge the gap with EU’s major competitors and reflect the direct production and access costs of energy.

Average retail electricity and gas prices for industrial consumers 2012

Electricity 100+ €/MWh 75-100 €/MWh 50-75 €/MWh 25-50 €/MWh

Gas 40-60 €/MWh 20-40 €/MWh 0-20 €/MWh

SOURCE: EC ERT BENCHMARKING REPORT 2015 | 13

ENERGY & CLIMATE

Primary consumption by fuel type

Facilitating innovation and technology development remains essential, as well as ensuring that the value chain for providing low carbon solutions remains in Europe. The EU should also focus on sustainable domestic energy production, while diversifying supply sources and developing required energy infrastructure.

In 2014, the world was still predominantly relying on oil and coal in terms of primary energy consumption and will do so for the next decades.

World primary energy consumption by fuel type 2014* (Million tonnes oil equivalent) Share 4,211 (33%)

3,066 (24%)

3,882 (30%) 879 (7%) 317 (2%) 574 (4%)

Total world consumption for all fuel types: 12,928

China

18%

6%

66%

1%

8%

2%

23%

US

36%

30%

20%

8%

3%

3%

18%

EU-28

37%

22%

17%

12%

5%

7%

12%

Russia

22%

54%

12%

6%

6%

0%

5%

India

28%

7%

56%

1%

5%

2%

5%

Japan

43%

22%

28%

0%

4%

3%

4%

Canada

31%

28%

6%

7%

26%

1%

3%

Brazil

48%

12%

5%

1%

28%

5%

2%

Australia

37%

21%

36%

0%

3%

3%

1%

World

33%

24%

30%

4%

7%

2%

*All data is for main consumers

SOURCE: BP ERT BENCHMARKING REPORT 2015 | 14

ENERGY & CLIMATE

Energy intensity & emissions

The EU must push for an ambitious international agreement on climate change. Engaging with EU trading partners is a key success factor towards such agreement.

Russia and China consume more energy per GDP than the US and the EU. In addition, although their energy intensity is lowering, total CO2 emissions continue to grow, contrary to the US and the EU.

Primary energy consumption per GDP 2000 | 2013

CO2 Emissions 2000 | 2013 12

0.35

10

0.25 8

Billions of Tonnes

Toe/GDP constant 2011 thousand USD

0.30

0.20

0.15

6

4

0.10

2

0.05

0.00

0

Russia

China

US

EU-28

China

US

EU-28

Russia

SOURCE: BP, World Bank, EC-JRC ERT BENCHMARKING REPORT 2015 | 15

ENERGY & CLIMATE

Carbon pricing systems worldwide

Carbon pricing mechanisms are a basic tool to promote the most efficient clean technologies, but essential provisions have to be aligned to avoid distortions of competition.

Different concepts of carbon pricing systems are developing worldwide. The existing prices vary significantly from less than 1 to 130 USD/tCO2e. However, 85% of emissions are priced at less than 10 USD/tCO2e.

Alberta Manitoba British Columbia Washington Oregon

Sweden Finland

Iceland EU

Denmark

Kazakhstan

Québec

Ontario

California

Ukraine

Japan China

RGGI

Ireland

Turkey

Estonia Latvia Poland

UK

France Portugal

Mexico

Slovenia Switzerland

Thailand

Brazil

Chile

Rep. Korea

Rio de Janeiro São Paulo Beijing Tianjin

South Africa

New Zealand ETS implemented or scheduled for implementation

ETS and carbon tax implemented or scheduled

Carbon tax implemented or scheduled for implementation

ETS implemented or scheduled, tax under consideration

ETS or carbon tax under consideration

Carbon tax implemented or scheduled, ETS under consideration

Hubei

Chong-Qing

Kyoto

Saitama

Tokyo Shanghai Guangdong Shenzhen

SOURCE: World Bank Group ERT BENCHMARKING REPORT 2015 | 16

DIGITAL ECONOMY

Telecommunication infrastructure

Public and private investments in telecommunication infrastructure are essential for the deployment of digital economy. Market consolidation in Europe is needed to keep up with global competitors.

In main European economies, investments in public telecommunication infrastructure are below the US and OECD average.

Investment in public telecommunication in the US and main EU economies 2013 300

250

$276 US$ per capita

200

150

$162

100

$146 $131

$131 $113

50

$104 $71

00

US

OECD average

France

UK

Italy

Spain

Germany

Poland


DIGITAL ECONOMY

Machine-to-Machine communication

Given the huge potential of connected machines, including for the Industrial Internet, and the speed of technological changes, urgent policy measures are needed in the EU.

The “Internet of Things” as measured by the number of M2M SIM cards in use, is quickly expanding. Scandinavian countries are particularly well positioned (per capita). However, with more than 30 million units used, the US takes the lion’s share.

M2M /embedded mobile cellular subscriptions: Top OECD countries 2014 35

30

Number in million units

25

20

15

10

05

00

US

Japan

France

Italy

Sweden

Germany

Korea

Netherlands

Norway

Belgium


DIGITAL ECONOMY

ICT-related patents

Urgent action is needed at EU level to enable the digitisation of the European economy, in particular to encourage R&D investments in ICT.

ICT-related patents reflect the important role of ICT innovation in the digital economy. As reflected by other patent-related indicators, most EU countries are lagging behind other economies, including in the ICT sector. This reflects the lower portion of R&D investment in this area (e.g. compared to the US and Japan).

ICT-related patents under PCT* (Top OECD countries and EU) 2010-2012 30

World ICTrelated patents:

25

217,042

20

15

10

05

0 %

EU-28

US

Japan

China

Korea

Germany

France

UK

Sweden

Canada

Netherlands

*PCT: Patent Cooperation Treaty


DIGITAL ECONOMY

Devices online

The expected global boom of connected devices will make the “Internet of Things”. For this to become a reality, strong telecommunication networks are necessary.

With the digitisation of the economy, the number of devices connected to the internet (i.e. with an individual IP address) is increasing. However, some countries like Korea, Denmark or Switzerland are much more “connected” than others. Important differences can also be observed within Europe.

Devices online (Top 10 OECD countries) 2015

Other countries of interest

40

35

Number per 100 inhabitants

30

UK

13.0

Italy

10.2

Japan

8.2

Poland

6.3

China

6.2

25

20

15

10

5

0

Korea

Denmark

Switzerland

US

Netherlands

Germany

Sweden

Spain

France

Portugal


DIGITAL ECONOMY

Fostering start-ups development

Efforts should be made by policy makers to ensure that the EU develops the start-ups scene required to enter in the digital economy era.

Although the cost of starting a business (fees and capital) is particularly low in some EU Member States (UK, Ireland, Lithuania) and comparable to the US, on average such cost remains much higher in the EU than in other key economies.

Cost of starting a business and the number of procedures involved

5.1

Lowest cost:

UK

11.0

China

6.0

US

5.0

Israel

8.0

Japan

3.0

Korea

4.9

EU-28 %

02

04

06

Number of procedures required

08

10

Cost (% of income per capita)

Highest cost:

UK

Hungary

Ireland

Slovenia

Lithuania

Germany

12

14

16

Paid-in minimum capital (% of income per capita)

SOURCE: World Bank Group ERT BENCHMARKING REPORT 2015 | 21

DIGITAL ECONOMY

Venture capital investments

The absence of a genuine EU capital market remains an obstacle for the development of Europe based start-ups.

With the exception of Israel and the US where venture capital markets are well developed, in other countries only a very tiny proportion of GDP is used to support entrepreneurship.

Venture capital investments top 10 countries (flows, % GDP 2014)

Other countries of interest

0.45

France

0.40

0.03

Germany 0.02

0.35

Spain

0.0 1

Italy

0.00

0.30 0.25 0.20 0.15 0.10 0.05 0.00 %

Israel

US

Canada

Sweden

Korea

Finland

South Africa

Ireland

Japan

UK


EMPLOYMENT, SKILLS & EDUCATION

Europe’s unemployment

Youth employability is essential to secure and improve Europe’s innovation and growth in an ageing society.

On average, almost a quarter of the economically active population in the EU younger than 24 was without a job in 2014.

Youth Unemployment

Unemployment rates 2014

Total Unemployment

60 58.3 55.5 50

40 38.1

40.0

33.6

30 26.6 20 15.5 10 7.8

9.7

11.0

17.9

19.0

20.0

21.1

21.6

23.5

23.6

23.7

27.3

29.6

23.9

15.5

13.1

16.2

9.2

0

%

DE

AT

NL

DK

LU

EE

CZ

FI

UK

SI EU-28 SE

BE

FR

HU

PL

IE

SK

PT

IT

ES

GR

NO

US OECD

5.0

5.6

7.4

6.6

5.9

7.4

6.1

8.7

6.1

9.7

10.2

8.5

10.3

7.7

9.0

11.3

13.2

13.9

12.7

24.4

26.5

3.5

6.2

8.0

7.3



Digital jobs: vacancies and graduates

To embrace the full potential of the digital economy, ICT skills are needed in Europe. This will benefit not only the industry but also growth and innovation in almost all sectors of the EU economy.

By 2020, Europe might face a shortage of 825,000 ICT professionals.

Jobs total

Total potential demand

9,000,000 8,809,000 8,800,000 8,600,000 Gap: 825,000

8,400,000 8,200,000 8,000,000 7,594,000 7,800,000

7,984,000

7,600,000 7,400,000 7,200,000

7,325,000

7,000,000 2013

2014

2015

2016

2017

2018

2019

2020

SOURCE: EC and EMPIRICA ERT BENCHMARKING REPORT 2015 | 24


Education performance

No student should leave school without a basic set of STEM and ICT skills, which are essential to operate in a fully digitised information society.

The top 5 performers in mathematics, reading and science (average score at the PISA test) are all situated in Asia.

Mathematics, reading and science mean score of 15-year-olds 2012 630 < 5 TOP ACHIEVING COUNTRIES

MAIN EU COUNTRIES (PER GDP) >

610 590 570 550 530 510 490 470 450 Shanghai China

Singapore

HongKong China

Chinese Taipei

Korea

OECD average

Germany

France

Mathematics

UK

Italy

Reading

Spain

Science


TRADE & INVESTMENT

Structure of EU trade balance

Besides bringing revenue, international trade also contributes to millions of jobs in the EU. Therefore the EU and Member States should remain committed to international negotiations in view of reaching effective agreements for trade, energy and climate issues.

The EU trade balance is strong thanks to a large surplus in manufactured goods and in commercial services (2014). However, Europe is also increasingly relying on energy imports. By contrast, the US, (our main commercial partner), although remaining a heavy importing economy, has reduced their energy imports (partly due to the shale gas reserves).

Net imports and exports in key sectors (€Billions)

2005

-617.4Bn

2014

-547.8Bn

2005

-59.3Bn

2014

-800

-600

-400

+101.5Bn

-200

Trade Balance

0

200

Energy

Manufacturing

400

Services

600

Agricultural

SOURCE: EC, OECD, US Government, CBS ERT BENCHMARKING REPORT 2015 | 26

TRADE & INVESTMENT

EU share of global exports

Facilitating market access, the elimination of trade and investment barriers and adherence to a rules-based global trading system are crucial to strengthen the EU economy and to remain globally competitive.

The EU remains the main trading power. However, over the last decade, its share of global trade has decreased (like the US and other advanced economies), while China has become a significant actor.

Total global trade in goods and services 2004 | 2014*

€13.7 Trillion

2004

2 01 4

€28.4 Trillion

% Share of world trade: 2004 | 2014* 19.5 16.5

17.5 13.8

13 7.6

7.6

EU-28 SOURCE: Eurostat

US

China *Estimates 23 ERT BENCHMARKING REPORT 2015 | 27

TRADE & INVESTMENT

Foreign Direct Investments The global share of FDI flooding in and out of Europe and the US is following a downward trend. The significant decline in Europe has followed the crisis in 2007.

FDI inflows and outflows 2007 | 2014

Europe’s capacity to attract investments is essential to its economic and technological development.

FDI inflows

FDI outflows

1,400

1,200

1,000

800

600

400

200

0 €Bn

EU-28

Asia (East and South-East)

US

SOURCE: UNCTAD ERT BENCHMARKING REPORT 2015 | 28

TRADE & INVESTMENT

Rare earth in the modern economy

Since rare earth elements, and raw materials in general, represent the lifeblood of today’s industry and given the high concentration of production in a few third countries, political efforts should be maintained to secure the supply to EU industry at competitive terms.

Our modern economies make use of a wide spectrum of technology metals, including rare earth elements. They have gained an increasing strategic importance for the ICT and defence industries and for the green economy.

Distribution of producing countries in percent 1995 | 2012

1995

China 60.1%

US 27.8%

India - 3.4% Brazil - 0.5% Malaysia - 0.6% FSU* - 7.5% Others - 0.2%

2012

China 86.8%

US - 6.4% India - 2.6% Australia - 3.7% Others - 0.6%

*FSU : Former Soviet Union SOURCE: UNCTAD ERT BENCHMARKING REPORT 2015 | 29

FINANCIAL KPI’S

Revenue

On average, the revenue growth generated by ERT Member companies has slowed down since 2012. In Europe, it was even negative for two consecutive years while a rebound could be observed outside Europe in 2014.

Average annual change (%) per region*

Rest of the World

Europe

25

20

15

10

5

0

-5

-10 %

Total annual revenue*

2011

2012

2013

2014

€1,693 Bn

€1,823 Bn

€1,710 Bn

€1,654 Bn

*calculated for 38 ERT companies representing a total of 77% of total revenue of ERT companies SOURCE: ERT ERT BENCHMARKING REPORT 2015 | 30

FINANCIAL KPI’S

EBIT

The total EBIT generated by ERT Member companies has recovered from the economic crisis. However, for many companies, international competition has increased, thus affecting their operational earnings. In terms of revenue share, EBIT has also decreased compared to the 2010 level.

Total EBIT of ERT Member companies €237Bn 250

€208Bn

€202Bn

€212Bn €191Bn

200

150

100

50

0

EBIT as % of total revenue

2010

2011

2012

2013

2014

10.7%

11.0%

8.7%

9.6%

8.9%

SOURCE: ERT ERT BENCHMARKING REPORT 2015 | 31

FINANCIAL KPI’S

R&D expenses

Around €50 billion are invested each year by ERT industries in R&D. This amount even shows a steady increase on a yearly basis, in spite of increasing pressure on their revenue. For many European companies, growing global competition requires them to invest more and more in R&D to stay competitive.

R&D expenses of ERT Member companies 60

€53Bn

€54Bn

€55Bn

€49Bn 50

€40Bn 40

30

20

10

0

R&D expenses as % of total revenue

2010

2011

2012

2013

2014

2.1%

2.2%

2.3%

2.5%

2.6%

SOURCE: ERT ERT BENCHMARKING REPORT 2015 | 32

Bibliography & Glossary EU COMPETITIVENESS

DIGITAL ECONOMY

IMF: World Economic Outlook, 2012-2015 OECD data: Gross domestic spending on R&D, 2015 OECD Library: Main Science and Technology Indicators, 2015 The World Bank: GDP per capita, 2015 OECD data: GDP per hour worked, 2015 WEF: The Global Competitiveness Report, 2015-2016 OECD Stat: Patents by technology, 2015 OECD Stat: Growth in GDP per capita, productivity and ULC, 2015 The World Bank: World Development Indicators, 2015 The Economist: Tightening grip - Rising Chinese wages will only strengthen Asia’s hold on manufacturing, 14 March 2015 European Central Bank Statistical Data Warehouse: Estimated MFI loans to NFCs by economic activity, 2015 Eurostat: General government gross debt, 2015 BRUEGEL: Capital Market Union, A vision for the long term, April 2015

OECD: Digital Economy Outlook, 2015 World Bank Group: Starting a business, 2014 OECD: Entrepreneurship at a Glance, 2015

ENERGY & CLIMATE European Round Table of Industrialists BP: Statistical Review of World Energy, 2015 The World Bank Database Joint Research Center EDGAR: CO2 time series 1990-2013 per region/country, 2015 World Bank Group: Carbon pricing watch, 2015 The World Bank Group: State and Trends of Carbon Pricing, September 2015

EMPLOYMENT, SKILLS & EDUCATION OECD: Unemployment rate, 2015 OECD: Youth unemployment rate, 2015 European Commission and EMPIRICA: e-Leadership in Europe, Demand and supply forecasts (2015-2020), June 2015 OECD: Pisa 2012 Results in focus, 2012

TRADE & INVESTMENT European Commission: European Union trade in the world: index, 2015 USDA: US Agricultural Trade, 2015 OECD Stat: International Trade balance (MEI), 2015 United States Census Bureau: US International Trade Statistic, 2015 Eurostat: Trade in goods, by main world traders, 2015 UNCTAD: World Investment Reports 2012 and 2015 UNCTAD: Commodities at a glance - Special issue on Rare Earth n°5, 2014

SHORT FORM ISO COUNTRY IDENTIFIERS EU COUNTRIES

OTHER COUNTRIES

Belgium

BE

Greece

GR

Lithuania

LT

Portugal

PT

Japan

Bulgaria

BG

Spain

ES

Luxembourg

LU

Romania

RO

Norway NO

JP

Czech Rep.

CZ

France

FR

Hungary

HU

Slovenia

SI

US

Denmark

DK

Croatia

HR

Malta

MT

Slovakia

SK

Germany

DE

Italy

IT

Netherlands

NL

Finland

FI

Estonia

EE

Cyprus

CY

Austria

AT

Sweden

SE

Ireland

IE

Latvia

LV

Poland

PL

UK

UK

US


ERT Members CHAIRMAN Benoît Potier - Air Liquide

VICE-CHAIRMEN Nils S. Andersen - A.P. Møller-Maersk Vittorio Colao - Vodafone Group

Jean-Paul Agon

L’Oréal

Claudio Descalzi

Eni

Gérard Mestrallet

ENGIE

César Alierta Izuel

Telefónica

Henrik Ehrnooth

KONE

Lakshmi N. Mittal

ArcelorMittal

Paulo Azevedo

SONAE

John Elkann

FCA

Dimitri Papalexopoulos

Titan Cement

Ben van Beurden

Royal Dutch Shell

Christoph Franz

F. Hoffmann-La Roche

Jan du Plessis

Rio Tinto

Kurt Bock

BASF

Ignacio S. Galán

Iberdrola

Patrick Pouyanné TOTAL

Zsolt Hernádi

MOL

Norbert Reithofer

Jean-François van Boxmeer Heineken

BMW Group

Carlo Bozotti

STMicroelectronics

Heinrich Hiesinger

ThyssenKrupp

Stéphane Richard Orange

Svein Richard Brandtzaeg

Norsk Hydro

Timotheus Höttges

Deutsche Telekom

Kasper Rorsted

Henkel

Antonio Brufau

Repsol

Frans van Houten

Royal Philips

Güler Sabanci

Sabanci Holding

Ton Büchner

AkzoNobel

Pablo Isla

Inditex

Risto Siilasmaa

Nokia

Paul Bulcke

Nestlé

Leif Johansson

Ericsson

Tony Smurfit

Smurfit Kappa Group

Jean-Pierre Clamadieu

Solvay

Joe Kaeser

Siemens

Ulrich Spiesshofer

ABB

Iain Conn

Centrica

Jacek Krawiec

PKN Orlen

Carl-Henric Svanberg BP

Ian Davis

Rolls-Royce

Bruno Lafont

LafargeHolcim

Johannes Teyssen

E.ON

Rodolfo De Benedetti

CIR

Thomas Leysen

Umicore

Jacob Wallenberg

Investor AB

Bill McDermott

SAP

Nancy McKinstry

Wolters Kluwer

Pierre-André de Chalendar Saint-Gobain Marijn Dekkers

Bayer

SECRETARY GENERAL Brian Ager


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European Round Table of Industrialists

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