The pilot project The Future of Manufacturing in Europe is an explorative and future-oriented study. It explores the future adoption of some key game-changing technologies and how this adoption can be promoted, even regionally. The analysis of implications for working life focuses primarily on tasks and skills, not only at the white-collar, tertiary-education level, but also for blue-collar occupations, including a focus on challenges facing national and company apprenticeship systems. The future orientation also includes quantitative estimates of the employment implications of the Paris Climate Agreement, of large increases in global tariffs and of radical automation. It also measures the return of previously offshored jobs to Europe.
The research is comprised of seven modules/sub-projects.
‘Reshoring’ is the relocation of previously offshored value chain activities back to the EU and can be an important source of new manufacturing employment in Europe. Monitoring the evolution, magnitude and motivations of reshoring is crucial in understanding the drivers of reshoring decisions, to learn the way reshoring is implemented, and to evaluate the role of policy in encouraging this development. The European Reshoring Monitor was a regularly updated online database set up in 2015 to collect information on individual reshoring cases identified in media articles and other sources. The Monitor ran until the end of 2018.
Mapping of regional industrial policy capacity is one of the seven research projects investigated as part of the pilot project Future of Manufacturing in Europe (FOME).
Manufacturing is geographically much more regionally concentrated than other economic activities. Thus, analysing the effects of the development in the manufacturing sector on regional economic areas and labour markets is important to design and implement suitable regional policies.
Previous research highlights that successful approaches to local economic and employment development, including structural change and restructuring, are characterised by the involvement of a wide range of (regional) actors, a variety of measures and a coordinated implementation taking into consideration the particularities of the region. This pinpoints that designing and realising future-oriented regional policies is a challenging task. While it certainly is the case that some regions do have the knowledge and institutional capacity to orient their strategies and instruments towards a sustainable economic structure and labour market under consideration of core industrial activities, this is by no means the case throughout Europe.
The aim of this research project is to map the existing industrial policy capacity in selected EU regions, the identification of elements and processes of regional policy design and implementation and the identification of good practices thereof.
In this context, regional industrial policy refers to the set of strategic measures targeted at improving the competitiveness of the regional economy, taking into consideration the specific characteristics of the region. It addresses the institutional and business environment, structure of economic activity and the labour market to prepare the region for future developments so that economic growth and societal welfare can be realised. The regional industrial policy capacity constitutes the combination of involved actors (and the coordination/cooperation among them) as well as applied strategies and instruments in various policy fields that might be relevant in the individual case.
Through qualitative case studies (background document review and interviews), nine European regions have been explored regarding their key components of regional industrial policy design and implementation with the objective to identify good practice elements and success factors. This has been supplemented by findings from a literature review.
Overview report and case studies: Developing regional industrial policy capacity
Digital technology is changing manufacturing. Changes falling under the heading of 'Industry 4.0' describe a set of technologies which are likely to bring about deep transformations of the production process: advanced robots, networked machines and artificial intelligence will be combined to generate new products and new ways of making products. This will have consequences for work organisation, for employment at establishment level, as well as in terms of skill demands. It will also impact on the structures that regulate the relationship between social partners in specific sectors.
The project aims at examining the potential impact of new technologies, the 'game changers' or disruptors, on manufacturing in Europe. The main purpose of the five studies is to allow stakeholders to anticipate and address the impact of new technologies on production processes, working conditions and social dialogue.
The project includes five separate studies, each one focusing on a 'game changing' technology in European manufacturing: advanced robotics, 3D printing, electric vehicles, biotech, Industrial Internet of Things (IIOT). The methodology applied was a combination of desk research, in-depth interviews and workshops where innovators, employers, trade unions and policy makers had a chance to discuss the future of the technology in their specific sector. Each of the reports investigates the possible impact of these technologies on production processes, working conditions, and employment in terms of skills, competences and tasks. The horizon of the studies is 10 years into the future.
Overview report and case studies: Game changing technologies in European manufacturing: Exploring the impact on production process and work
This research on apprenticeships in manufacturing and advanced manufacturing is carried out in response to the increasing interest of EU and national policy makers in apprenticeships as a way to tackle the generally high levels of youth unemployment and to integrate young people into the labour market. It is, however, essential to ensure that any initiatives undertaken in relation to apprenticeships correspond to the needs of the labour market and the ways in which new technologies are transforming the work organisation and production processes across all sectors, particularly manufacturing. The countries in focus in this research are five EU Member States (Denmark, France, Germany, Italy and Ireland) and two non-EU countries (Australia and the USA). These countries were selected for the importance of advanced and high-tech manufacturing for the national economy and the labour market and for the prominent role of apprenticeships within the VET system.
This research is divided into two projects, each with specific objectives. The main objective of the first project is to provide an analytical overview of apprenticeship systems in the selected countries and to review policy developments in response to labour market shifts, changes in employment, career and mobility patterns, technological and structural change. The main objective of the second project is to investigate the actual implementation and adaptation of apprenticeship programmes particularly in advanced manufacturing at company or industrial district or regional cluster level. The aim is to identify innovative practices but also to assess the resilience and flexibility of the prevailing national apprenticeship models in that same sector which is challenged by the fast pace of technological change and requirements for new skills.
The main outputs of the first project are seven country reports, one for each country covered, and a comparative overview on policy developments on apprenticeship systems, with particular focus on the links between education/ training policies and industrial policies. These reports are based on extensive desk research underpinned by four to eight in-depth interviews per country with key stakeholders representing public authorities, employers organisations, trade union organisations, training providers and research institutes. Under the second project, 14 case study examples, two for each country covered, will illustrate adaptations of existing apprenticeship systems to local circumstances in the manufacturing and advanced manufacturing sector. Wider challenges related to structural and technological change are also explored. The findings from this research will feed into policy discussions around the role played by apprenticeships in the future development of manufacturing and will inform policy making in the context of current or planned reforms of apprenticeship systems.
Small and medium-sized enterprises are widely acknowledged as the 'backbone of the European economy', providing an important contribution to GDP and employment. In spite of the fact that international activity is in general positively related to firm performance, the share of SMEs engaged in international activities is comparatively limited. Also, there is considerable heterogeneity among SMEs regarding their internationalisation intensity, modes and target markets.
This research project focuses on a subgroup of internationally active SMEs: born globals. These companies that intensively engage in international activities briefly after start-up have been found to generally outperform other young firms in economic and employment terms. Furthermore, as they tend to be involved in international business networks, their success might have knock-on effects on other businesses. As currently little is known on their specific roles in global supply chains, and the effects of these cooperations, this is the main research question of this project. Furthermore, the driving and hindering factors for born globals' activities will be investigated, as will be potential support needs.
The project is mainly based on qualitative case studies on born globals' supply chains and an analysis of illustrative support instruments for SME internationalisation, supplemented by in-house literature review.
Overview report and case studies: Born globals and their value chains
The task content of occupations is continuously changing, reflecting the introduction of new technologies in production and of new forms of work organisation. Such processes of change in the task content of occupations poses important challenges for societies: many workers whose skills have become obsolete may find it difficult to update them, and face unemployment or downward mobility as a result; education systems themselves may struggle to keep up with the changing requirements of the economy, while existing employment regulations and industrial relations systems may be less effective or adapted to the new working environment and conditions. For these reasons, it is critical to monitor and understand the changes in the task content of occupations. While a quantitative approach is useful to provide broad overviews of the task content of occupations across Europe, the standardised collection of data removes most contextual information, which is necessary to understand the process of change in the task content of occupations, its drivers and implications. A way to try to cover at least some of the gaps in the existing quantitative information is to complement it with an alternative qualitative approach.
This project aims at providing a better understanding of the changes in the nature of key manufacturing occupations in Europe in recent years, as a result of factors such as technology, market changes, policy and regulation, and their implications on employment, tasks and skills, job quality and industrial relations. The study provides a qualitative perspective on recent changes in the content and nature of five manufacturing occupations in Europe: meat processing workers, hand-packers, car assemblers, chemical plant machine operators and inspection engineers. It also explores differences across four countries (Sweden, Germany, Italy and the UK) covering different European regions and tries to identify interaction between the task content of occupations and contextual aspects, such as industrial relations systems and market structures.
The main outputs are five comparative reports, one for each manufacturing occupation. Each report is based on four case studies, one per country. The 20 case studies are based on extensive desk research and in-depth interviews with workers, line managers, trade associations and union's representatives. As a final output from the project, an overview report highlights the main findings from the above material.
Overview report and case studies: New tasks in old jobs: Drivers of change and implications for job quality
There are various European and global developments that can impact upon the future of manufacturing. While the estimation of future developments is associated with appreciable uncertainty it is nevertheless useful to map out possible futures. The macroeconomic modelling will incorporate the trade relations in the global economy and requires an input-output framework in order to provide estimates of the impact of developments in manufacturing upon other sectors. It is also necessary to arrive at estimates of net demand, by also estimating job creation in order to replace retirement.
The project will examine the employment implications of possible scenarios of relevance for the future of manufacturing. These will include developments in energy and trade policy and technology and investment. The model will generate forecasts by sector and occupation. Various classifications of jobs (occupations in sectors) as generated by the European Job Monitor will be applied in order to obtain some indication of how the structure of employment implied by various scenarios differs from the baseline.
Economic and labour market developments since 2008 have highlighted the fundamental importance of manufacturing for economies in the global era. Manufacturing has always been vital for R&D and a nation’s capacity for innovation. Its importance for Europe is accentuated by the fact that almost 80% of Europe’s exports are manufactured goods.
There is also much to suggest that we are on the cusp of a new industrial revolution with fast-moving developments in areas such as the internet of things, new materials and green technologies. These technological innovations will lead to a massive increase in manufacturing productivity.
There will undoubtedly be some negative impacts on employment as firms introduce labour saving technology. However, previous episodes of rapid technological progress have also shown more positive impacts on employment. If productivity improves more rapidly in European manufacturing than elsewhere then European firms can capture new global market share and such scale effects can lead to higher levels of employment. Moreover, new technology can give rise to new products which generate new employment opportunities.
The multiplier effect of manufacturing jobs – the number of jobs created in related sectors – is greater than that for all other sectors meaning that manufacturing makes a disproportionate contribution to broader economic growth. As labour accounts for an increasingly smaller share of total value added, it may become both desirable and feasible to retain manufacturing in Europe. This will stimulate growth in related high-value activities in R&D and other services.
A series of regional industrial policy seminars were organised around this project. They aimed to investigate the role of regional actors and policies promoting employment in light of the very significant economic and technological challenges and opportunities for manufacturing in Europe.