Changes in Manufacturing Occupations Leading to Fast Growing Regions. Evidence from the EU-15 Labour Markets

Sunday, June 26, 2016: 9:00 AM-10:30 AM
263 Dwinelle (Dwinelle Hall)
Mariachiara Barzotto, University of Birmingham, Birmingham, United Kingdom; Birmingham Business School, University of Birmingham, Birmingham, United Kingdom
Lisa De Propris, Birmingham Business School, University of Birmingham, Birmingham, United Kingdom of Great Britain and Northern Ireland
In the last decades, European manufacturing has been the object of an intense reorganisation driven crucially by multinational firms' offshoring strategies. European multinational companies have mainly devoted their efforts to presiding over high value-added upstream and downstream activities whilst offshoring low value-added operations to low labour cost economies. The hollowing out of manufacturing activities had a great impact on the EU labour market: it has affected EU job demand, as well as the local and regional stock of competences, raising concerns over the sustainability of the EU manufacturing industries longer term.

Such an hollowing out is particular critical in a sector which account for 15.1% of the EU 27 GDP (2013), and where each additional manufacturing job is found to be able to create 0.5-2 jobs in other sectors in Europe (Rueda-Cantuche, et al., 2012). Notwithstanding the importance and the related threats attributed to the changes in the international production structure, there is scant evidence of: 1) what job profiles are needed to sustain innovation in manufacturing industries across the EU, and 2) where they can be founded.

Our main research question is therefore aimed at addressing this gap, namely: What occupational mix should a region aim to create in order to promote a smart and inclusive economic growth?  The paper empirically addresses this question by using regional data from the European Union Labour Force Survey (EU-LFS) and Eurostat statistics. Job profiles are classified according to the occupation groups within the European Skills, Competences, qualifications and Occupations (ESCO) framework. The study will focus on EU-15 countries which have similarly developed manufacturing industries. A descriptive analysis is carried out to track the evolution of job profiles and, accordingly, the (mis)match between demand and supply in the manufacturing sector over the last 10 years. An econometric analysis is performed to study which occupational mix in the EU manufacturing sector leads to a higher gross value added at NUT2 geographical disaggregation level.

The research sheds light on the geographical distribution of job profiles demand and supply in the EU manufacturing sector. Since long-term European socio-economic growth rests of maintaining a competitive manufacturing sector necessarily in high value added industries, the work proposes to identify which combination of job profiles positively affects the regional economic growth. The study provides a better understanding of how Europe can increase its competitive edge in strategic manufacturing industries for a sustainable competitiveness. Finally, the study provides suggestions on what would be effective skills development interventions, in terms of higher education and vocational education and training.