Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European Parliament and of the Council concerning structural business statistics COM(2006) 66 final — 2006/0020 (COD)
Date: 2006-09-14
Institutions: European Economic and Social Committee
Subjects: EU statistics, branch of activity, business policy, company structure, competitiveness, economic statistics, statistical method

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Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the
European Parliament and of the Council concerning structural business statistics

COM(2006) 66 final — 2006/0020 (COD)

(2006/C 318/13)

On 27 March 2006 the Council decided to consult the European Economic and Social Committee, under
Article 285(1) of the Treaty establishing the European Community, on the abovementioned proposal.

The Section for the Single Market, Production and Consumption, which was responsible for preparing the
Committee's work on the subject, adopted its opinion on 26 July 2006. The rapporteur was Ms Florio.

At its 429th plenary session, held on 13 and 14 September 2006 (meeting of 14 September), the European
Economic and Social Committee adopted the following opinion by 130 votes, with seven abstentions.

1. Background

1.1
On 20 December 2000, the European Council decided
to launch a ‘Multiannual programme for enterprise and entre-
preneurship, and in particular for small and medium-sized enter-
prises’ (1). This new reference framework was intended by the
European Union to improve the competitiveness of enterprises
in a knowledge-based society, to simplify and facilitate their
legal, administrative and financial environment, and above all to
foster
research and innovation, give them easier access to
services and Community programmes and promote entrepre-
neurship.

In early 2003, the European Commission presented its
1.2
Green Paper on Entrepreneurship in Europe (2),
in which it
stressed the need for targeted support and called for strategic
policies to promote the industrial and manufacturing sector,
which has been experiencing a perilous slow-down for years
now in Europe, above all when compared with other areas of
the world.

1.2.1
the entrepreneurial spirit in Europe were:

The principal actions proposed to support and increase

— bringing down barriers

to business development and

growth,

— balancing the risks and rewards of entrepreneurship,

— encouraging a more favourable attitude in society as a whole

towards the establishment of new businesses.

1.3
In 2004, following a consultation of stakeholders based
on the Green Paper, the Commission presented an action plan
on entrepreneurship (3) which took account of
the new
responses received and built on the Multiannual Programme for
Enterprise and Entrepreneurship.

1.4
At both national and European level, key issues such as
industrial policy, support for services, and employment as an

(1) Decision 2000/819/EC.
(2) COM(2003) 27 final, 21.1.2003.
(3) COM(2004) 70 final, 11.2.2004.

engine of economic growth are closely linked to priorities in the
employment and social spheres, which are an important goal of
the European Union's policy decisions. In this area, too, the
European institutions have taken a number of
initiatives in
recent years, including the presentation of an annual plan by
Member States.

The Luxembourg Summit of 1997 launched the Euro-
1.5
pean Employment Strategy (EES), which would later be seen as a
key element of the Lisbon Strategy. It is the Lisbon Strategy, in
fact, which set the goal of modernising the European economy
by cutting unemployment and creating highly skilled jobs. These
goals can only be achieved if attention is paid to social policies
and to policies providing equal opportunities among all levels of
the population. This is in effect a sine qua non, prior to a
substantive restructuring of the economic system, for achieving
a higher growth rate and a ‘healthy’ economy.

Other elements that were to be included in this ambi-
1.6
tious project are the European Research Area, a complete inte-
gration of markets and the creation of an SME-friendly environ-
ment. In its proposal on the Competitiveness and Innovation
Framework Programme (2007-2013) (4), the Commission itself
states that the promotion of technologies and research is directly
linked to exploiting opportunities offered by the market to new
products, services and business practices. The willingness to take
risks and try out new ideas on the market should also be nour-
the main causes of
ished.
Europe's disappointing growth.

innovation is one of

Insufficient

there was a call

On the social cohesion front,

1.7
for
immediate interventions in the fields of education/training and
social protection. To ensure coordination between Member
States when formulating their policies, an open method of coor-
dination was mooted through which best practices and perfor-
mances in the different fields would be exchanged and dissemi-
nated.

(4) COM(2005) 121 final, 6.4.2005.

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It was thanks to the mid-term review of

the Lisbon
1.8
Strategy that in 2005 the European Commission was able to
its Communication on growth and employment (5),
present
which focused attention on two important points: bringing
about solid and sustainable economic growth and creating ever
more and better jobs. These goals were thought to be achievable
through a synergy of the Community and national levels.

The European development model differs from others in
2.2
the considerable role attributed to the social component and to
the very notion of sustainable economic growth. This must be
borne in mind whenever the European institutions intend legis-
lating in their sphere of competence.

2. General comments

2.1
The process of change in the economy and manufac-
turing spheres is continuous and fast moving: the various indus-
trial sectors and their operators adapt and innovate to keep
abreast of market evolution, endeavouring to remain competi-
tive and create ever greater growth and profit opportunities.

2.1.1
In a market such as the European one, where busi-
nesses evolve at break-neck pace and traditional sectors (manu-
facturing, commerce, distribution, etc.) encroach upon one
another, the demarcation line between the different types of
operation can be difficult to define. Moreover, when it comes to
it is becoming more and
assessing and classifying businesses,
their
more difficult to determine where the main thrust of
activity lies (whether in commerce, agriculture, manufacturing,
cottage industry, services, etc.).

The growth of the social economy to a point where it
2.1.2
now accounts for a large and increasing part of the European
market makes it difficult for statistical data to keep pace with a
situation of constant flux and renewal. Eurostat officials say
they have found it difficult to define this field because social
economy activities are not always registered as business activ-
ities. However, the Committee thinks that no effort should be
spared in order to measure the increasing importance of the
social economy sector, which is crucial for the achievement of
the Lisbon Strategy objectives. Absence of such data is an
obstacle to a better understanding of developments of the busi-
ness world and the market place.

In stressing the importance of statistical support,

The importance of obtaining structural statistics on the
2.1.3
European Union's businesses — updated and focused above all
on their activity, competitiveness and output — has been estab-
lished.
it
the collection and subsequent
should be remembered that
processing of data involves what could be substantial
invest-
ments in human and financial resources, especially for small
businesses.

2.1.4
Economic growth is an absolute priority for all the
countries of the European Union, as the European Council and
other European institutions have reiterated on countless occa-
sions. This economic growth must necessarily be accompanied
by the creation of new and better jobs. In all sectors, but espe-
cially in manufacturing and the services sector, this must be
done in a way that fuels growth itself and allows Europe's citi-
zens to reap the benefits.

(5) COM(2005) 330 final, 20.7.2005.

This means that a very clear idea of the real state of
2.3
European industry is needed if
truly effective, useful and
coherent legislation is to be framed. Political choices should be
based on an analysis of the real situation and the problems
involved and offer solutions that embrace as many elements as
possible, seeking to anticipate the impact that decisions will
have on that situation from all angles (political, economic, legal,
social, national and subnational).

2.4
Statistical data are undoubtedly a crucial instrument for a
thorough and effective analysis of reality. The work Eurostat has
carried out since its inception is a valuable and indispensable
support for the European Union's decision-making and political
processes.

2.4.1
Statistical data are of fundamental importance because
they can measure, study and describe the numerous and diverse
aspects of the reality on the ground. The availability of statistical
information is cardinal for the formulation and evaluation of
policies, for the management of public services and functions,
for a better legislative framework and for regular ongoing moni-
toring of the success and the progress delivered by the policies
adopted.

the Member States,

2.5
This is true for all areas of the European Union's compe-
tence. For this reason Eurostat, supported and assisted by the
statistics institutes of
is charged with
compiling and providing up-to-date and reliable data. Of crucial
importance in recent years have been the data collected in the
fields of economy and finance, agriculture, demographic poli-
cies, social security, business, scientific research, environment,
transport and, no less important, the world of industry and its
attendant market indicators.

2.5.1
To have an idea of the importance attributed to the
European business world and its development, one need look
no further than the initiatives the Commission and the Council
have taken on this front in recent years.

3. The proposal for a regulation on structural business

statistics

3.1
Council Regulation (EC, Euratom) No 58/97 adopted by
the Council on 20 December 1996 has been amended no fewer
than four times in the last decade, and this is the latest proposed
recast,
intended to improve the coherence of analyses and
applicability of polices and strategies for supporting European
industry and manufacturing.

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To respond to the increased need for statistics, the
3.1.1
Commission proposes a number of improvements, paying par-
ticular attention to services, which have been at the centre of
considerable discussion in recent months because of
their
economic importance and their potential, which is not entirely
reflected at EU level. The Commission also adds an annex on
the demography of enterprises and business services.

3.2
The Commission has confirmed that no detailed and
recent statistics are available for a raft of activities, mostly
related to business services; the new proposal
is therefore an
opportunity to adapt the provisions in force so that economic
and manufacturing activities can be compared with those in
services.

3.2.1
In addition, the Commission has considered it neces-
sary to have harmonised data on the demographics of busi-
nesses (start-up, operation and wind-up) and their impact on
employment to support strategic recommendations on the spirit
of enterprise. The ‘demographic’ data of businesses already
feature in the structural indicators used for monitoring the goals
set by the Lisbon Strategy. It is in this context that the Commis-
sion's proposed recast should be examined.

3.3
The proposal identifies the NACE code, normally used by
the Commission's services for all statistics on economic activity,
as the reference instrument for collecting statistical data (6). The
NACE code has itself been revised and updated to provide a
better understanding of trends in the EU's economy and manu-
facturing.

NACE REV. 1.1, the reference indicator,

3.4
is simply an
update of NACE REV. 1 and does not represent a significant
reorganisation. The purposes of the revision was to reflect:

— new activities that did not exist when NACE REV. 1 was

drawn up;

The collection of statistics, defined by the field of applica-
3.5
tion (Article 2), is organised in modules, as set out in Article 3
of the proposal for a regulation:

— a common module for annual structural statistics;

— a detailed module for structural statistics in industry;

— a detailed module for structural statistics in trade;

— a detailed module for structural statistics in construction;

— a detailed module for structural statistics in insurance;

— a detailed module for structural statistics on credit institu-

tions;

— a detailed module for structural statistics on pension funds;

— a detailed module for

structural

statistics on business

services;

— a detailed module for structural statistics on business demo-

graphy;

— a flexible module for the conduct of a small ad hoc data

collection of enterprise characteristics.

3.5.1
The last three modules are new to this proposed recast
of the regulation and an annex is devoted to each module and
its use.

3.6
the
Pilot studies are also envisaged for just some of
modules. Such pilot studies have always accompanied the collec-
tion of statistics via modules; in this instance, the inclusion of
ad hoc pilot studies for the health and education sectors should
be highlighted. These are voluntary studies which, according to
Eurostat, are intended to afford a more accurate assessment of
the impact of market activities in these sectors.

— activities which had become more important since the
drafting of NACE REV. 1 as a result of changes in tech-
nology or in the economy;

4. Specific comments

— the correction of errors in NACE REV. 1 which were already
apparent at the time, i.e. not reflecting any changes in the
philosophy of the operation.

The latest version of NACE, bringing new modifica-
3.4.1
is currently at its second reading in the
tions and revisions,
European Parliament and will be launched in the coming
months.

(6) NACE: Nomenclature générale des Activités économiques dans les
Industrial Classification of

Communautés Européennes
Economic Activities in the European Communities).

(General

4.1
The EESC recognises the crucial contribution that statis-
tical data make to setting industrial policy priorities under the
Lisbon Strategy. The Commission also affirms, again in the
Competitiveness and Innovation Framework Programme 2007-
2013 (7), the value of benchmarking as a useful instrument for
drafting policies, along with studies and exchanges of good
practice between national and regional authorities.

For this reason the EESC considers the revision of Regu-

4.2
lation 58/97 important and suggests some modifications.

(7) See footnote 4.

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security costs’

The heading ‘social

in the common
4.3
module (Annex I) was also present
in previous versions.
However, new developments in the internal market now make it
seem vague and difficult to interpret. Social security in the
Member States is organised in different ways, with different
‘social security
systems and practices: the very definition of
system’ is problematic for the 25 EU Member States and should
probably be elaborated and articulated further.

the complexity of

4.4
Again in Annex I, though it also appears in those that
follow, the data on employment are unduly limited and do not
reflect
the
EU Member States. They are restricted, in fact, to the number of
those working part time and full time: in reality, there are far
more modes of employment than this. Moreover, there is no
breakdown by sex, apart from in the banking sector (Annex VI).

the labour market across all

tant, since they give a broad picture of energy consumption and
use by businesses; moreover, Article 1 of the draft regulation
states that data on ‘the factors of production used’ will be
collected and there is not the slightest doubt that energy is one
of these. Above all, these indicators are accorded high priority
in the most recent statements by the Council and the European
Parliament,
including the recent Green Paper: A European
Strategy for Sustainable, Competitive and Secure Energy (8).

4.8
Annex VIII is new and concerns the structure, activity
and performance of business services, while Annex IX concerns
business demographics. The collection of statistics in these two
fields requires far more frequent monitoring. Moreover, in the
module on business demographics, the data on employment are
not broken down according to employment mode or sex,
although it would be very useful to know the nature and struc-
ture of the workforce when businesses are started and wound
up.

4.4.1
Article 1 of earlier versions of Regulation 58/97
already included among the goals of statistical collection that of
analysing ‘business conduct’: this recast could also have been an
opportunity to gauge more carefully and in greater depth the
employment policy of businesses, given the importance this has
in the policies of the European Union.

5. Conclusions and recommendations

4.5
On the issue of pilot studies, the Committee has misgiv-
ings about the method chosen by the Commission, which sees a
need to analyse sectors such as health and education in order to
‘test the feasibility of covering market and non-market activities
in these Sections’. In particular, bearing in mind the Commis-
sion's provisional proposal on the services directive, which
would exclude them, the Committee believes that such sensitive
sectors should not be covered by structural business statistics. In
the light of the new regulatory proposals concerning services in
the single market, the EESC thinks it would be useful for the
Commission to initiate ad hoc gathering of statistics on these
sectors.

The European Union needs better statistics to support

5.1
current sector-specific industrial policies.

5.2
For this reason, the EESC stresses the key role played by
Eurostat as the instrument for monitoring the European Union's
policies. The EESC thinks, therefore, that Eurostat's work should
be reinforced and the statistics-gathering networks
in the
Member States expanded and improved.

The EESC broadly supports

to recast
5.3
Council Regulation (EC, Euratom) No 58/97 on industrial statis-
tics.

the proposal

4.6
In Annex II (the industry sector module), the Commis-
sion has decided to exclude data on overall spending and
spending on staff involved in research and development. In the
light of the Lisbon Strategy, the absence of such data is an
obstacle to a better understanding of developments in the busi-
ness world and the nature and aims of investments.

Statistics are an important tool at both Community and
level, so support instruments should be devised to

5.4
national
make them ever more effective, timely and reliable.

4.7
The Commission has elected to exclude data on the
acquisition of energy products. However, these are quite impor-

(8) COM(2006) 105 final, 8.3.2006.

As far as possible, statistics should be based on up-to-
5.4.1
date data already kept by administrative authorities and other
authorised bodies. The administrative burden of collecting statis-
tics must match the size of the business concerned. In some
countries, gathering data on SMEs is the responsibility of local
or regional business associations. It would be useful for Member
States to pool good practices of this kind.

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Increasingly targeted and up-to-date statistics are needed
5.5
on the structure of businesses and their production activity,
taking into account
the volume and variety of activities
(production, commerce, distribution) sometimes carried out by
one and the same company.

5.6
The Committee considers it important to have a good
system within which Eurostat, the social partners, the academic
world and businesses can consult one another and pool experi-
ence. This mechanism should be improved and expanded within
the CEIES-Eurostat forum (one representative of users for each
Member State).

5.7 Were Eurostat to dialogue more closely with social part-
ners on social security costs, for example, it would be possible
to get a more detailed breakdown of the burden on businesses
in this area, which is not uniform throughout
the 25 EU
Member States, rather than having just one heading.

if

they were more detailed,

Although employment data are part of other targeted
5.8
they could provide a
statistics,
clearer picture of the activities of businesses. The Committee
including those on
notes that structural business statistics,
demography, must always include a careful analysis of
the
quality of employment. Employment
is a key factor in the
success of business activities and so statistics on modes of work
that distinguish only between part-time and full-time work are
entirely inadequate, particularly in the light of constant changes
in the labour market. Moreover,
the Committee does not
consider it useful to separate structural business statistics from
employment data, as the two fields are inextricably linked.

its doubts

The Committee reiterates

regarding the
5.10
appropriateness of assessing the health and education sectors
using the pilot study method. Given the sensitivity of these
sectors and their crucial importance for all of Europe's citizens,
it would be inappropriate to include these fields in structural
business statistics. In the light of the new regulatory proposals
concerning services in the single market, the EESC thinks it
would be useful for the Commission to initiate ad hoc gathering
of statistics on these sectors.

5.11
On the question of energy purchases and investment in
human resources in the research and development sector, the
EESC considers that, although ad hoc statistical gathering is
provided for, it is important to assess both the qualitative and
quantitative importance this has in the life of businesses — in
the light of both the Lisbon Strategy goals and the most recent
concerns and initiatives undertaken by the European Union on
energy policy.

As far as statistics on environmental variables are
5.12
concerned, the EESC stresses the importance of collecting data
on the treatment of industrial waste, waste-water purification
and the cleaning-up of polluted areas. It would also be good to
know whether industrial waste treatment is performed in-house
or contracted out, given the cost of such operations.

5.13
In Annex IV, which refers to the building industry, it
would be useful to differentiate between the various activities:
housing, public buildings, transport networks and infrastructure.

Year after year, the social economy accounts for an ever
5.9
greater part of
the European economy. The EESC suggests,
therefore, that the Commission could use Eurostat to examine
this sector and its impact on the business world using the pilot
study method.

5.14
Greater emphasis should be given to regionally based
statistics showing in which areas industry and business had
sprung up, what the principal activities were,
in which areas
research investment was concentrated, and where the most busi-
ness start-ups and failures were.

Brussels, 14 September 2006.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND