Sectoral specialisation in the EU a macroeconomic perspective

The downturn in the global ICT sector since 2001 has had an effect on economic performance.
Output and employment fell sharply in Ireland, but a buffer was provided for the economy,
initially at least, by the continued strong performance of the chemicals sector and robust growth
in domestic demand in 2001. In Finland, the downturn in global telecommunications demand
has been associated with a slowdown in the previously rapid growth of the industry, but there
are no signs of stagnation. The dominant company, Nokia, has managed to sustain good
profitability with only minor layoffs. In Sweden, the contribution of the telecom product
industry to GDP growth was negative in 2001 and 2002.

is, the more concentrated an industry is across
countries²⁶.

Overall, the results indicate that in the period
1985-1989 production was in general not very
concentrated across EU countries, with utilities
and business sector services being less

26 M. Amiti (1997), “Specialisation patterns in Europe”, CEP
Discussion Paper, no 363, p. 6. The Balassa indices can be used
either way: when the weighted standard deviation is calculated
across industries (weighted by the industry shares), an index of
country specialisation can be derived; calculating the standard
deviation across countries (weighted by country shares) allows
to draw conclusions about the relative concentration of
industries. In a sense, (relative) industry concentration is the
flip side of country specialisation.

Table 2 Balassa and concentration indices

(1985-1989)

std.

BE DE GR ES FR IE IT LU NL AT PT FI DK SE UK dev.

Total manufacturing                   0.97

Food products, beverages and tobacco 1.09
Textiles, textile products, leather

and footwear                         0.85

Wood and products of wood and cork  0.63

Pulp, paper, paper products, printing
and publishing                          0.72

Rubber, plastics and fuel products      0.94

Chemicals and chemical products      1.58

Other non-metallic mineral products    0.94

Basic metals and fabricated metal

products                                1.32

Machinery and equipment            0.75

Transport equipment                  1.05

Manufacturing NEC; recycling         0.89

Low technology intensity               1.00

Medium-low technology intensity       0.75

Medium-high technology intensity      1.15

High technology intensity               1.00

Business sector services and utilities    1.03

1.21 0.74 0.87 0.85 1.27 0.99 0.70

0.71  1.68 1.45  1.24 2.73 0.76 0.94

0.57 3.21  1.27 1.06 0.60 1.94 0.43

0.79  1.45  1.44  0.86 0.41  1.22     -

0.82 0.62 1.02 0.98 0.83 0.69 0.74

0.97 2.39 1.06 0.92 0.53  1.29 2.16

0.96 0.66 1.06 1.01  1.77 0.88 0.49

0.79  1.16  1.48  1.08  0.82  1.22  1.81

0.94 0.67 1.01  1.08 0.33  1.09 2.86

1.38 0.23 0.48 0.81  0.94 0.89 0.67

1.32 0.28 0.95  1.02 0.16 0.72 0.10

0.88  1.08 1.06 0.99 0.93  1.13 0.27

0.66 2.27 1.38  1.17 1.90 1.22 0.67

0.83 0.86 1.09 0.97 0.80 0.88 0.50

0.92  1.19 1.12  1.04 0.48  1.16 2.50

1.27 0.34 0.72 0.90 0.94 0.85 0.48

0.97 1.16 1.09 1.10     - 1.08 1.09

0.81 0.94 1.04 1.01 0.80 0.94 1.02  0.04

1.36  1.11  1.61  0.85  1.49  0.70  1.12  0.10

0.44  1.14 3.58 0.81  0.71  0.25 0.94  0.22

0.63 2.35 1.72 2.80 1.34  1.65 0.74  0.15

1.32 0.92 1.10 2.86 1.50 2.07 1.27  0.13

0.80 0.62 0.46 0.67 1.04 0.84  1.03  0.07

1.74 0.65 0.95 0.67 0.72 0.75  1.00  0.07

0.94  1.64 1.73 0.83  1.10 0.64 0.89  0.07

0.96 1.21 0.43 0.76 0.71  1.05  1.02  0.04

0.81  0.95 0.36 0.84  1.04  1.01  0.90  0.08

0.42 0.47 0.32 0.56 0.33  1.43 0.96  0.07

1.73  1.38 0.76 0.81  1.67 0.52 0.97  0.07

1.00 1.12 2.37 0.84  1.19 0.52  1.05  0.10

1.33  1.24 1.10 2.32  1.52  1.60 1.12  0.09

0.92  1.15 0.71  0.75 0.87 0.91  1.00  0.04

0.92 0.76 0.48 0.74 0.79  1.05 0.94  0.05

1.01  1.05 0.95 0.97 1.05     - 1.03  0.02

- 0.98  0.60 0.91  1.20  1.39  1.06 0.81     - 0.98  0.04

- 0.89  1.02  1.04  1.11  1.21  1.11  0.93     - 0.88  0.04

-  1.13  0.94  1.18  1.10  1.48  1.09  1.19     - 0.95  0.04

-  1.13  0.96 0.61  1.43  1.01  0.56 0.52     -  1.05  0.17

-  1.19     -  1.13  1.20  1.05  1.65  1.16     -  1.16  0.06

- 0.67     -  1.12  1.12 0.89  0.86 0.87     -  1.14  0.04

- 0.94  3.15  1.10  1.08 0.76 0.93  1.07     -  1.04  0.06

- 0.90 0.90 0.85 0.67 0.60 0.81  0.92     - 0.96  0.04

ECB

Occasional Paper No. 19

July 2004

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