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BENCHMARKING REPORT

2015

Overview

Foreword Europe at a glance 03


EU COMPETITIVENESS
Economic growth 04
EUs 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 KPIS

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


Europes 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 Europes 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

ERT BENCHMARKING REPORT 2015 | 3

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

7.8

7.6

5.1

6
4.7

4.5

3.4
2.5

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

EUs 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

Finland : 3.3%

Sweden : 3.3%

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 Europes internal competitiveness gap is instrumental for increasing growth and jobs.

Global Positions

29

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

10

Ranking top non-EU countries

Switzerland

Singapore

United States

Japan

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 EUs 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 EUs labour productivity will remain
crucial to ensure the EUs 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

-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

4.5

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 Europes industry. Policy measures
should consider the impact on energy prices
so as not to enlarge the gap with EUs 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

0.10

0.05

0.00

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

Qubec

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
So 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

SOURCE: OECD
ERT BENCHMARKING REPORT 2015 | 17

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 lions 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

SOURCE: OECD
ERT BENCHMARKING REPORT 2015 | 18

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

SOURCE: OECD
ERT BENCHMARKING REPORT 2015 | 19

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

Korea

Denmark

Switzerland

US

Netherlands

Germany

Sweden

Spain

France

Portugal

SOURCE: OECD
ERT BENCHMARKING REPORT 2015 | 20

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

SOURCE: OECD
ERT BENCHMARKING REPORT 2015 | 22

EMPLOYMENT, SKILLS & EDUCATION

Europes unemployment

Youth employability is essential to secure and


improve Europes 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

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

SOURCE: OECD
ERT BENCHMARKING REPORT 2015 | 23

EMPLOYMENT, SKILLS & EDUCATION

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

EMPLOYMENT, SKILLS & EDUCATION

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

SOURCE: OECD
ERT BENCHMARKING REPORT 2015 | 25

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

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

Europes 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 todays 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 KPIS

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

-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 KPIS

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

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 KPIS

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

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 Asias 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 n5, 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 BENCHMARKING REPORT 2015 | 33

ERT Members
CHAIRMAN
Benot Potier - Air Liquide

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

Jean-Paul Agon

LOral

Claudio Descalzi

Eni

Grard Mestrallet

ENGIE

Csar Alierta Izuel

Telefnica

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. Galn

Iberdrola

Patrick Pouyann TOTAL

Zsolt Herndi

MOL

Norbert Reithofer

Jean-Franois van Boxmeer Heineken

BMW Group

Carlo Bozotti

STMicroelectronics

Heinrich Hiesinger

ThyssenKrupp

Stphane Richard Orange

Svein Richard Brandtzaeg

Norsk Hydro

Timotheus Httges

Deutsche Telekom

Kasper Rorsted

Henkel

Antonio Brufau

Repsol

Frans van Houten

Royal Philips

Gler Sabanci

Sabanci Holding

Ton Bchner

AkzoNobel

Pablo Isla

Inditex

Risto Siilasmaa

Nokia

Paul Bulcke

Nestl

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-Andr de Chalendar Saint-Gobain


Marijn Dekkers

Bayer

SECRETARY GENERAL
Brian Ager

ERT BENCHMARKING REPORT 2015 | 34

stephenson design.eu

European Round Table of Industrialists

Place des Carabiniers 18A Karabiniersplein I B-1030 Brussels

Tel. +32 2 534 31 00 I www.ert.eu I @ert_eu I contact@ert.eu


ERT BENCHMARKING REPORT 2015 | 35