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Vol.1980/0156

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(80)448final
Brussels,24July1980
SIXTHANDSEVENTHPROGRESS REPORTOPTHE
BUSINESS COOPERATION CENTRE
(1978and1979)
COM(80)448final^'"j
•V.

%
SIXTH AND SEVENTH PROGRESS REPORT OFTHE
BUSINESS COOPERATION CENTRE
(197.8 and 1979 )
INTRODUCTION ' i - " '
Inpursuence ofthemodifications made bytheCommission tothe
instructions oftheBusiness Cooperation Centre ,itsactivities were rather
more orientated during theperiod under review ,towards more selective and
collective initiatives butcontinuing athigher level inthefield of
"twinning "operations between small andmedium-sized enterprises ofdifferent
nationalities .
1.Volume ofactivity
Information activity :
»
-requests forinformation
Partner-seeking activity
-number ofrequests
-number ofreplies
-number ofcontacts established1979
575
120
1737
1021978
513
88
1070
80(1977 )
(515 )
(84)
(894 )
(75)
Asaresult ofthese contacts ,thefollowing agreements were confirmed
tothe Centre :
Sector Purpose ofcooperation Nationality of
theundertaking
Management consultancy
Processing ofplastic
materials
Processiong ofplastic
materials
Saving banks
SoftwareSharing ofprojects
Exchange ofknow-how
reciprocal distribution
Reciprocal distribution
Reciprocal assistance ,
operations abroad
Technical and commercial
operationsUK-I
IRL
D-F
DK
DKA
UK
Consulting Engmeers Sharing ofprojects UK -F-F

*
SIXTH AND SEVENTH PROGRESS REPORT OFTHE
BUSINESS COOPERATION CENTRE
(1978 and 1979 )
1.Volume ofactivity
1979 1978 (1977 )
Information activity :
-requests forinformation
Partner-seeking activity
-number ofrequests
-number ofreplies
-number ofcontacts established575
120
1737
102513
88
1070
80(515 )
(84)
(894 )
(75)
Asaresult ofthese contacts ,thefollowing agreements were confirmed
tothe Centre :
Sector Purpose ofcooperation Nationality of
theundertaking
Management consultancy Sharing ofprojects
Processing ofplastic
materials
Processing ofplastic
materials
Saving banks
Software
Consulting EngineersExchange ofknow-how ,reciprocal
distribution
Reciprocal distribution
Reciprocal assistance ,
operations abroad
Technical and commercial
operations
Sharing ofprojectsUK-I -
D-IRL
D-F
DK-A
DK-UK
UK-F-F

-2-
•t
Chemical products
Data-processing
Consulting Engineers
Processing ofplastics'
ί
Consulting Engineers
Cosmetics
Furniture
Structural steel
engineering
Footwear
Leather
Footwear >
Consulting Engineers
Structural steel '
engineering
Management consul tancy
Footwear
Mechanical engineering
Mechanical handling
equipment
Civil Engineering
Structural steel
engineering
Tools
Optical products
Structural steel
engineeringReciprocal distribution
Joint development
Sharing ofprojects
Joint venture
Sharing ofprojects
Joint venture
Specialization ,reciprocal
distribution
Exchange oflicences ,reci­
procal distribution
Specialization
Joint venture
Specialization agreements
Sharing ofprojects
Joint venture
Sharing ofprojects
Specialization
Specialization andreciprocal
sales agreements
Joint marketing agreement
Joint undertaking ofprojects
Joint venture
»•
Reciprocai distribution
Reciprocai distribution
Reciprocai distributionB-UK
DK-UK
UK-F
D-UK
A-D
F-UK-UK
F-IRL
A
D
I
F
DD
IRL ■
IRL
F-IRL
UK
D-UK
D-UK
D-IRL
F–I
UK-NL
F-NL
F-I
UK-F
UK .-B
UK-F

Civil engineering Technical andsales cooperation
Environment alprotection Joint venture
Electronic componentsi "Spécialisation
Chemicals 1 Joint venture
Joint undertaking ofprojects
ιJoint venture
AssociationChemicals 1
Consulting Engineers
Mechanical engineering
Management consultancy
Bronze founding Technical exchanges and
joint marketingUK-F
UK-F
D-UK
B-UK
D-D-D-UK
I-NL
UK-F
A,B,D,UK,UK
F,I,NL,NL
In1978 and 1979 ,the instances ofbilateral cooperation in
which theB.C.C. sought apartner atthespecific request offirms
involved thefollowing undertakings ,broken down bynationality :
1978 -1979 (Total since 1974 )
24British undertakings 66
14German undertakings 55
17French undertakings 55
5Belgian undertakings 21
6Italian undertakmgs 20
5Netherlands undertakings 16
5Irish undertakings 9
3Danish undertakings 8
0Luxembourg undertakings 1
4Austrian undertakings 4

-4-
Asregards thevarious sectors ,astriking aspect isthecon­
siderable number ofservice undertakings among theparties totheagree -1
ments concluded .This isaccounted forby j
first ,thefact that ,since industrial enterprises areengaging in­
creasingly intransnational activity ,theservice undertakings are
feeling theneed also toberepresented ontheir clients external
markets ;
-secondly ,thefact that ,since the "product "ofaservice under­
taking isaffected bytheregulatory andadministrative environment to
astill greater extent than anindustrial product ,itismore diffi­
cult toexport assuchandinmany cases necessitates enlisting the
„assistance ofanon~the–spot partner *
# initiated bytheBusiness Cooperation Centre
- ' <
Inaddition tothe"twinning "ofundertakings when specif icially re­
quested todoso,theB.C.C ,hastaken advantage oftheopportunity
which itwasgiven in1977toinitiate projects onitsowninitiative ,
asit |hadannounced initsprevious progress report .
2.1 .Banks
Oneofthesectors oftheeconomy inwhich atrend towards con­
centration ismost obvious isthebanking sector .Faced with the
increases intheir capital andreserves which theyareperiodi­
cally required tocarry outbythesupervisory authorities ;
developments intheneeds ofthecustomers whothemselves are
having more andmore international contacts andexpect tore­
ceive service onaninternational scale ;andthecooperation
groupings setupbythemajor banks ,which have putanendto
thelinks ofreciprocity between major andsmall banks ,thein­
dependent regional ormedium-sized banks arecoming under the
control ofthemajor banks oneafter theother .
■i

Oneofthefewmeans ofsafeguarding their independence xsfor
them tocomplement each other .
After many preparatory contacts ,theB.C.C. wasable topreside
over theconstitution ofthe "European Group ofBanks "(GEB),
which atthepresent time consists of10medium-sized banks
(twoBelgian ,twoFrench ,three Italian ,oneGerman ,oneDanish
andoneDutch ),having between them 525branches andemploying
about 6.500 persons . •
Thetypes ofcooperation currently being practised comprises ;
Vf
-opening ofaccounts andlines ofcredit onthebasis ofreci­
procal preference ;
-exchanges ofexperience atthelevel ofgeneral management
anddepartment heads ;
-reciprocal assistance incustomer service andmarketing ;
-exchange oftrainees .
Inthecourse oftime ,more intensified forms ofcooperation ,such
,asconsortium financing ,will have tobebuilt up.
Tråde fa_irs _forjsub-contraetors
Theattention oftheB.C.C. wasdrawn byboth theorganizers and '
theusers (that istosay ,thesub-contracting industries andthe
principals ,mainly inthemetalworking sectors )tothe stendency
towards proliferation oftrade fairs forsub-contractors .Theover­
lapping ofdates ,thediversity ofdefinitions of"sub-contracting
products 1'andtheapplication ofcriteria ofvarying degrees of
importance could only create problems fortheorganizers ,theex­
hibiting sub-contractors andtheprincipals visiting thefairs .

The B.C.C. arranged anumber ofmeetings between theorganizers of
themain European trade fairs forsub-contractors and ,incoope­
ration with therepresentatives ofthemain sub-contracting in­
dustries ,aninstrument forconcerted action was set up,which :
-didaway with theoverlapping ofdates :,
-adopted comparable definitions ofthesub-contracting products
tobeadmitted ;
-adopted harmonized systems ofassessing theimportance ofthe
■■different trade fairs ;
-brought about bilateral cooperation between various trade fairs ..
Medical ,andliosp^tjil_e^u^pment
InWestern Europe ,theneed fornewhospital capacity isreaching
saturation point ,ontheother hand ,increasing demand isbecoming
evident inoverseas countries .
There isalso thefact that medical andhospital equipment isoften
manufactured bysmall andmedium-sized enterprises which have too
restricted arange ofproducts toparticipate intenders andin­
sufficient resources toseek large export orders themselves .
TheB.C.C. hadaccordingly devised aproject forbringing together
anumber ofsmall andmedium-sized enterprises inthis sector with
theaim ofsetting upalarge-scale export group ,which would be
also todomarket research onthespot .andwould simultaneously be
asound partner for thecoordinating contractors .

-7-
The B.C.C. contacted close to200 small and medium-sized enter­
prises intheCommunity medical andhospital equipment sector .Over
athird ofthem reacted favourably and aninitial meeting took place
for thepurpose ofdetermining thefunctions and thestructure of
such agroup . *
Although this meeting confirmed theinterest shown bythefirms in
such aninitiative ,theB.C.C. wasnot able tofollow itup,mainly
for two reasons :
I
i-thevery great diversity ofhospital equipment ,sometimes ofa
rather small unity value ,required theparticipation ofavery
large number ofparticipants ifthegroup would beable tooffer
acomplete set ofitems ofitsownmanufacture ;
-such agroup ,necessitating amanagement structure ofitsown ,
\
incurs rather substantial costs and cannot beprofitable during
theinitial period .Whilst inacertain number ofmember countries ,
such agroup could benefit from government aid ,groups ofanin­
ternational character arenoteligible forsuch grants .
(
2.4 .HoJ^el equipment
The B.C.C. took asimilar step when itapproached manufacturers .of
equipment andornamental articles for "four-star "hotels andbusiness
premises (carpets ,furnishing fabrics ,linen ,cutlery ,chinaware ,
drawing-room furniture ,chandeliers ,decorations ,kitchen imple­
ments ,etc.),with aview toforming agroup foroverseas export
marketing ,initially ontheNorth-American market .
./.

-8-
This proposition metwith avery positive response from the
firms involved ,there being more than 200manufacturers inte­
rested .
2.5 .Bronze foundries _
Onthe initiative ofthe Business Cooperation Centre ,some ten
bronze founders (Belgium ,Holland ,Germany ,France ,Italy ,Great
Britain ,Austria )will meet periodically toexchange technical
ideas andtocarry outjoint marketing oftheir products .
3.General observations ,
3.1 .Ove_rsea.s_expor_t j>rou£S _
When endeavouring tosetupatransnational group for theexport
ofmedical andhospital equipment ,theB.C.C. received confir­
mation that many small andmedium-sized enterprises allow dis­
-trust orscepticism tooutweigh solidarity ofinterests ,parti­
cularly when there arepartners ofother nationalities ,and this
inhibits them from making aninvestment where equal rates ofre­
turn cannot beguaranteed foreach participant .
The B.C.C. therefore reiterates itssuggestion that theCommunity
forjoint overseas export schemes among firms which bythemselves
arenot inaposition toexport tothird countries ,could provide
afinancial contribution tothecosts ofsetting upsuch groups ,
assuming foralimited period afraction ofthemanagement and
market prospection costs .

-9-
3.2 .The ]Eu^o^e_an_Co^o2_er_at_io^n_G_roup^n ^
Thepainful gestation ofthis Community legal instrument seems •-
sometimes toraise doubts about itsusefulness ornecessity .
Itistrue that quite rightly ,thelegal obstacles totransnational
S # #cooperation nolonger have theprohibitive importance that was
attributed tothem' during thefirst decade oftheCommon Market 's
existence .Itisalso true that aCommunity Statute isnotneces­
sarily intrinsically superior ormore effective .
However ,the B.C.C. canbear witness tothe fact that thepsycho­
logical importance ofmaking use ofaCommunity Statute will
often bedecisive :since small andmedium-sized enterprises
areinvolved ,thefact ofhaving tochoose anational legal struc­
ture automatically places oneofthepartners onunfamiliar ground ,
which hedistrusts ,andtheB.C.C. hasseen several groupings
fail forwant ofanE.C.G. that could have put allpartners on
thesame footing . -
Thefuture member countries have also already expressed their
interest inthe existence ofsuch astatute .
Terms ofreference ofthe B.C.C.
The formation ofthe B.C.C. in1973 coincided inthemain with the
first enlargement oftheCommunity .Logically thenewmember countries
were themost active incalling upon theservices oftheB.C.C. in
order tofurther contacts with the Six .
Theadmission ofGreece ,Spain andPortugal will nodoubt create
newresearch needs forpartners andcontacts onbehalf ofthefirms
ofthese countries seeking complementary technical ,commercial or
financial factors .

-10-
Given that onaverage these countries are less developed
economically then thepresent day Community ,itishighly desirable
toencourage this activity from nowoninorder toprepare thesmall
andmedium-sized Greek ,Portuguese andSpanish enterprises fortheir
confrontation with theEconomy oftheNine ,
Having regard for this situation ,'this newpriority implies in
itself anequivalent reduction intheCentre 'sactivities inside the
present Community andwith thenon-member countries .
Inaddition theexperience oftheB.C.C. vintheperipheral
regions oftheCommunity ,shows that firm -to-firm contacts arediffi­
cult toorganise andcome tofunction less frequently when thepoten­
tial partners are of'greatly diverse degrees ofdevelopment .Also
theB.C.C. proposes ,within Community competition rules ,toconcen­
trate itsefforts mainly intheorganisation ofcollective contacts
onasectorial orregional basis ,between industrialists oftheCom­
munity andindustrialists ofthefuture member countries .
These collective contacts will permit exchange ofexperiences and
familiarisation with theeconomic environment ,which will prepare the
participants formore operational types ofcooperation links .
Finally itshould beremembered that theB.C.C. hasestablished
onanexperimental basis ,exchanges ofinformation with certain third
countries -European andoutside ofEurope .

-11-
Onemust state here andnow that this type ofindustrial cooperation
does notfunction inavery satisfactory manner ,anddoes not seem
tolead toconvincing results .Thereasons inthemajority ofcases are :
-thedifficulties ofcommunication due tothegeographical distance ;
-thediversity ofcontent intheinformation ,exchanges ;
-theprojects presented bythethird countries being ofasize not
accessible tothe small andmedium-sized clients ofthe B.C.C.
For these reasons the B.C.C. considers that itshould not becon­
firmed initsduties with regard tofirms innon-member countries .
';
CONCLUSION
Theforegoing considerati.ons lead theB.C.C. toorientate its
future activities intwo main directions :
-tosupport asbroadly aspossible thesmall andmedium-sized enter­
prises ofthethree candidate countries intheir efforts toadapt
tothemarket conditions oftheEuropean Community ;
-tomaintain acertain contact structure for the small andmedium-sized
enterprises oftheCommunity toassist them intheir search for trans -
frontier links .
*
* *