EN    EN EN 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 19.06.2008 
SEC (2008) 2047 
  
COMMISSION STAFF WORKING DOCUMENT 
 
Accompanying the 
  
FIFTH PROGRESS REPORT ON EC ONOMIC AND SOCIAL COHESION 
Growing Regions, growing Europe 
  
{COM(2008) 371final} 
EN 2   EN COMMISSION STAFF WORKING DOCUMENT  
accompanying the  Fifth Progress Report on economic and social Cohesion 
Growing Regions, growing Europe 
 
1. FIGURES AND TABLES  
Figure 1 – Convergence of GDP per head, employment rates and unemployment rates, 
2000-2006 
Figure 1 - Dispersion of regional (NUTS2) key  indicators (%) (coefficient of variation)
707580859095100105110115
2000 2001 2002 2003 2004 2005 2006GDP/head
Employment rate
Unemployment rate
Source: Eurostat 
 
Table 1: Main characteristics for th e Convergence, Transition and Regional 
Competitiveness and Employment regions 
Conv Transition RCE EU27
Population share in 2005 in % 31.4 7.2 61.3 100
Average annual change in population 2000-2005 in % *** -0.13 0.75 0.58 0.37
Number of regions* 84 28 159 271
Employment rate in 2006 in %** 57.6 62.8 68.1 64.4
Change in employment rate 2000-2006 in percentage points 
** 1.6 5.2 2.1 2.2
Unemployment rate in 2006 in %*** 11.0 8.8 6.8 8.2
Change in unemployment rate 2000-2006 in percentage 
points *** -2.9 -2.5 0.2 -1.0
GDP per head in 2005, EU27=100 **** 58 95 122 100
Change in GDP per head 2000-2005 in index points 
EU27=100 **** 4.3 5.6 -3.7 0
R&D as % of GDP, 2004 or most recent year 0.77 0.94 2.07 1.85
* DEE0 (Sachsen-Anhalt) taken into account as Convergence region
** based on NUTS breakdown valid 1/1/2007
*** Excluding two UK, PT, DE and one Finish region (no data)
*** excl. UKM5 and UKM6 (no data)
Source: Eurostat and DG REGIO calculations  
EN 3   EN Table 2: Employment and GVA share and change in six sectors, 2000-2005 
Share in 2005 in %
Conv Transition RCE EU27 Conv Transition RCE EU27
Agriculture, hunting and fishing           15.5 5.2 2.7 6.4 4.8 3.0 1.4 1.9
Total industry, including energy 21.4 15.1 17.0 18.1 20.7 16.9 20.4 20.2
Construction 7.5 10.4 6.6 7.1 7.7 8.5 5.5 6.0
Trade, transport & communication 23.3 29.2 25.9 25.4 23.1 25.9 21.0 21.4
Financial and business services 8.5 11.1 16.9 14.2 19.6 21.6 29.4 27.7
Other services 23.9 29.0 30.8 28.8 24.1 24.2 22.4 22.8
Total  100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Share of EU27 27.5 6.1 66.4 100.0 12.9 5.7 81.5 100.0
Average Annual Change 
2000 - 2005 in %
Conv Transition RCE EU27 Conv Transition RCE EU27
Agriculture, hunting and fishing           -6.8 -4.8 -2.0 -5.5 0.9 -1.5 -0.4 -0.1
Total industry, including energy -0.6 -0.9 -2.0 -1.5 3.3 1.7 0.6 0.9
Construction 0.5 2.0 0.8 0.8 0.9 3.0 1.1 1.2
Trade, transport & communication 1.3 1.3 0.6 0.8 2.8 3.3 2.1 2.2
Financial and business services 3.8 4.0 1.9 2.3 2.9 4.1 2.5 2.6
Other services 0.9 1.2 1.3 1.2 1.8 2.8 1.4 1.5
Total  -0.7 0.9 0.5 0.2 2.4 2.9 1.6 1.8
Note: Due to the lack of regional data in the UK, national data was used and all of UK was considered as RCE.
Source: Eurostat and DG REGIO calculationsEmployment GVA
Employment GVA
 
Table 3: Productivity by sector  in 2005 by type of region 
2005 GVA per person employed EU27=100 Conv Transition RCE EU27
Agriculture, hunting and fishing                          15 54 65 30
Total industry, including energy 46 106 150 112
Construction 49 77 105 84
Trade, transport & communication 47 83 101 85
Financial and business services 111 183 217 192
Other services 48 78 91 79
Total  48 94 125 100
Note: Due to the lack of regional data in the UK, national data was used and all of UK was considered as RCE.
Source: Eurostat and DG REGIO calculations
 
Table 4: Share of knowledge workers and populat ion with high educational level by type 
of region, 2006 
Conv Transition RCE EU27
Share of knowledge workers (ISCO 1,2,3) as % of total 
employment 30.6 34.1 41.3 37.7
Change in share of knowledge workers 2000-2006 in 
percentage points 3.5 1.9 3.4 3.4
Share of population 25-64 with high educational level (% of 
total population 25-64) 17.0 24.0 25.6 22.8
Change in share of population 25-64 with high educational 
level 2000-2006 in percentage points 3.1 4.1 3.0 3.0
Share of Human Resources in Science and Technology 
(core) (% of active population) 2006 12.4 15.7 17.0 15.5
Change in share of Human Resources in Science and 
Technology (core) 2000-2006 3.1 2.5 2.2 2.6
The breakdown by category does not include FR9, DE41, DE42, UKM6 and UKM5
Source: Eurostat and DG REGIO calculations
 
 
EN 4   EN 2. IDENTIFYING EUROPEAN HIGH GROWTH SECTORS  
At the national and European level, total employment and GVA can be broken down into 
301 NACE categories based on the national accounts data. Regional accounts also 
provides a breakdown of employment and GVA but only in a six sector breakdown for 
NUTS2 regions.  
Therefore, growth sectors are first identifie d at the EU27 level based on the 30 sector 
breakdown. In a second step, these growth se ctors are then related to the six sector 
breakdown at the regional level.  
At the European level, several sectors experienced high growth in GVA and/or 
employment. Figure 2 shows four quadrants  according to GVA growth (above and below 
average) and employment growth (above a nd below) average. The quadrant where both 
employment and GVA growth is above th e EU average were selected. Two more 
quadrants were partially considered. In one  quadrant, GVA growth was above average 
but employment growth was below. The s ectors where GVA growth was sufficiently 
high to compensate for lower employment gr owth or in some cases even employment 
decline were selected. In the other quadran t employment growth was above average, but 
GVA growth was below. Again in this quadr ant only the sectors where high employment 
growth compensated for low GVA growth were  included as growth sectors. The line on 
figure 2 shows this distinction. 
The second step of the sel ection involved considering wh ether all these sectors are 
drivers of economic growth. Two sectors were considered to be more  beneficiaries than 
drivers of economic growth: Activities of  households and Health and social work. 
Activities of households were excluded because  it is a very small sector, especially in 
terms of GVA. The Health and social work sector was excluded as expenditure in this 
area contributes to well-being, but is not a main driver of  the economy. Nevertheless, due 
to the ageing of the EU population, the Health  and Social work sector will continue to 
grow and cover an important and gr owing share of total employment.  
The Education sector, which was not retained  as growth sector due to its low GVA 
growth, is also likely to continue to grow  given the increasing importance of education 
for the competitiveness of the EU, as mentioned in the Communication. 
The education and the health and social  work sector, however, both share the 
characteristic that their performance cannot  be determined from GVA or employment 
shares or growth. The main goal of these s ectors is to increase the health and the 
education level of the EU's population. Th erefore, increases in expenditure and 
employment in these sectors have  to be assessed in the light of these goals. As such an 
analysis was not feasible within the confin es of this communication and they were not 
included in the analytical section. 
As a result, nine sectors were identifie d as EU growth sectors (See Figure 2):  
– Two services sectors with high productiv ity levels: Business activities (K) and 
Financial services. (J) 
                                                 
1 One category "Q: Extra-territorial organizations and bodies" was empty both at national and 
regional levels and has thus been excluded from this analysis. So the breakdown is officially in 17 
and 31 categories respectively. To avoid confusion, as the graphs only show 16 and 30 categories, the text refers to 16 and 30 categories. 
EN 5   EN – Three services sectors w ith either high employment or GVA growth and average 
productivity: Trade (G); Hotels and restau rants (H); and trans port and communication 
(I) 
– Construction which experienced strong empl oyment growth combined with a fairly 
strong, but below average, GVA growth (F) 
– Three manufacturing sectors which achieve d high GVA growth despite a decline in 
employment: Chemicals and man-made fibr es, Electrical and op tical equipment and 
Transport equipment. These three sectors t ogether constitute the so-called high and 
medium-high tech manufacturing sector. (DG, DL, DM) 
In order to fit the format of  regional data, these sector s are aggregated under broader 
categories. The first group falls under the heading Financial and business services 
(J+K), the second under Trade, transport and communication  (G+H+I), and 
Construction  (F) remains (See Figure 1).  
The fourth group is not identifiable at the regional level. Regional data combines the 
three manufacturing sectors with all other manu facturing sectors, several of which are in 
decline (see Figure 2), as well as Mining a nd Electricity, gas and water supply under the 
heading Industry (C+D+E). As a result, this aggregat e can not be considered as a pure 
growth sector (See Figure 1). 
EN 6   EN Figure 1: Table linking the NACE 30 sector breakdown at EU level to the 6 sector 
breakdown at regional level, identifying growth sectors 
NACE 
Code Full Name of SectorProductivity 
(EU27=100)Growth 
Sector?NACE 
Code Full Name of SectorGrowth 
Sector?
A Agriculture, hunting and forestr y 29
BF i s h i n g 66
C Mining and quarrying 216
D Manufacturing 101
DAManufacture of food products, beverages 
and tobacco 90
DB Manufacture of textiles and textile products 54
DC Manufacture of leather and leather products 58
DD Manufacture of wood and wood products 64
DEManufacture of pulp, paper and paper 
products; publishing and printing 114
DFManufacture of coke, refined petroleum 
products and nuclear fuel 415
DGManufacture of chemicals, chemical 
products and man-made fibres 205 Y
DH Manufacture of rubber and plastic products 94
DIManufacture of other non-metallic mineral 
products 100
DJManufacture of basic metals and fabricated 
metal products 94
DKManufacture of machinery and equipment 
n.e.c. 106
DLManufacture of electrical and optical 
equipment 108 Y
DM Manufacture of transport equipment 120 Y
DN Manufacturing n.e.c. 63
E Electricity, gas and water suppl y 271
F Construction 85 Y F Construction Y
GWholesale and retail trade; repair of motor 
vehicles, motorcycles and personal and household goods 77 Y
H Hotels and restaurants 66 Y
I Transport, storage and communication 122
Y
J Financial intermediation 207 Y
K Real estate, renting and business activities 189 Y
LPublic administration and defence; 
compulsory social security 95
M Education 74
N Health and social work 77
OOther community, social and personal 
service activities 88
P Activities of households 29J+KFinancial and 
business servicesData at National and European Level 
A+BAgriculture, hunting 
and fishing                  
C+D+E Industry In partNo
NoData at the regional level
L thru P Other servicesY
YG+H+ITrade, transport & 
communication
 
 
EN 7   EN Figure 2: Change in GVA and empl oyment by sector in EU27, 2000-2006 
Change in GVA and employment by sector in the EU27, 2000-2006
AgricultureFishing
Mining and quarryingManufacture 
of food
Manufacture of textiles
Manufacture of leatherManufacture 
of wood
Manufacture of paper
 and publishing Manufacture of coke,
petroleum and nuclear fuelManufacture of chemicals & man-made 
fibresManufacture 
of rubber & 
plastic products
Manufacture of 
other non-metallic 
mineral productsManufacture of 
basic metals
Manufacture of 
machinery n.e.c.
Manufacture of 
electrical and 
optical equipmentManufacture of ransport equipment
Manufacturing n.e.c.
Electricity, 
gas and 
water supplyConstruction
TradeHotels and restaurants
Transport and communicationFinancial 
servicesBusiness activities
Public administration etcEducationHealth and social work
Social and personal servicesActivities of households
-5%-4%-3%-2%-1%0%1%2%3%4%5%
-5% -4% -3% -2% -1% 0% 1% 2% 3% 4% 5%
Annual Average Change in GVA, 2000-06Annual Average Change in employment, 2000-05  .EU27 Average change in employment EU27 Average change in GVA
Bubble size reflects average employment 
and GVA share in 2005/2006High and medium-high 
tech manufacturin gEU Growth sectors in Green
 This line shows distinguishes sectors with a combined above 
average growth on GVA and employment (above the line) from those sectors with a below average growth (below the line)
 
EN 8   EN 3. SOURCES OF DATA AND REFERENCE YEARS  
The data presented in the fift h Progress Report is derived main ly from three sources: National 
accounts, Regional accounts a nd the Labour Force Survey. 
Due to the different rhythms at which these da ta sources are updated, the report contains a 
mix of end years. Below follows an overview of the availability of data by source: 
(1) National accounts 30 sector breakdo wn of GVA and employment 
From this source GVA was available up  until 2006, while employment was only 
available up until 2005 
(2) Regional accounts  
Regional accounts provides data on empl oyment and GVA by sector, population and 
GDP up until 2005.  
– Population and GDP are almost complete  with only two new NUTS regions in 
Northern Scotland missing 
– GVA for the 6 sector breakdown is complete with the exception of the UK 
– Employment for the 6 sector breakdown is  complete with the exception of the UK 
(3) Labour Force Survey 
This source provides a wide range of data including employment rates, 
unemployment rates, edu cation levels, knowledge workers and employment by 
sector. Data is available up until 2006. Due to changes in the NUTS boundaries, time 
series may not cover the entire period 2000-2006. 
– Unemployment rate is complete with th e exception of two new NUTS regions in 
Northern Scotland  
– Employment by sector is complete. However to ensure a sufficiently large sample, 
the average of 2005-2006 was used for employment in Trade, Hotels and Restaurants, High and medium-high ma nufacturing and K nowledge intensive 
services.  
– Change in employment by sector could not be calculated for the smaller sectors as 
the changes were almost always within the margin of error. Therefore, national employment data from national accounts wa s used instead. This is the case for 
Trade, Hotels and Restaurants and Hi gh and medium-high tech manufacturing.  
– Share of Knowledge workers is complete. 
– High Education level is complete 
4. D
EFINITIONS  
4.1. Human Resources in Science and Technology Core 
The group is defined by the OECD public ation: "Manual on the measurement of 
human resources devoted to S&T "Canberra Manual" 1995 
This indicator covers people who have succ essfully completed education at the third 
level in an S&T field of study and are employed in an S&T occupation. It is 
measured as a share of the economically active population. 
 
EN 9   EN 4.2. Knowledge Workers 
This defines employment by the type of occ upation in all sectors. It covers the first 
three classes of the International Standard  Classification of Occupations (ISCO) as 
defined by the International Labour Organisation  classification: (1) legislators, senior 
officials and managers, (2) professiona ls and (3) technicians and associate 
professionals. 
4.3. High and medium-high tech manufacturing 
Eurostat defines this group as th e following NACE 2 digit codes:  
24 Manufacture of chemicals and chemical product,  29 Manufacture of machiner y and equipment n.e.c.; 
30 Manufacture of office machinery and computers; 31 Manufacture of electrical m achinery and apparatus n.e.c.; 
32 Manufacture of radio, te levision and communication e quipment and apparatus; 
33 Manufacture of medical, precision and op tical instruments, watches and clocks; 
34 Manufacture of motor vehicles , trailers and semi-trailers; 
35 Manufacture of other transport equipmen t, excluding 35.1 Building and repairing 
of ships and boats 
This group can be aggregated to the NAC E codes DG, DL and DM with the only 
issue that it does not excludi ng 35.1 Building and repairi ng of ships and boats. This 
aggregation means that this sector can be  identified in the 30 sector breakdown. This 
is also the definition that wa s used to measure employment. 
4.4. Knowledge intensive services 
Eurostat defines knowledge intensive services as following: 
61 Water transport; 62 Air transport; 64 Post and telecommunications; J: 65 to 67 Financial intermediation; K: 70 to 74 Real estate, re nting and business activities; 
M: 80 Education; N: 85 Health and social work; 92 Recreational, cultural and sporting activities 
Due to the detailed breakdown of the NACE codes, only employme nt data based on 
the LFS is available.  
GVA can only be provided for a proxy wh ich included 63 (Suppor ting and auxiliary 
transport activities; activities of travel  agencies) and excludes 92 (Recreational, 
cultural and sporting activities), whic h was not used in this report. 
 
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