” Everybody is in services” Servicification and trade policy

1. ”Everybody is in services” Servicification and trade policy Emilie Anér Magnus Rentzhog Presentation at lunch seminar: ”Servicification- Why free trade in services matter to manufacturing” ECIPE, BusinessEuropeand ESF April 25, 2013

2. Servicification = more and more services as inputs and outputs in manufacturing Increased dependence in the manufacturing industry on • Purchased service inputs • In-house service production • Sales of services integrated into products • Sales of services alongside products • Service import and export …supports competitiveness, productivity and trade

3. Keyfigures for manufacturingfirms Costs for services as inputs Sweden: 25 % Employees in service-relatedoccupations Sweden: 46 % Services sales in total turnover Sweden: 26 % Addedvalue in manufacturing: 30 % (OECD) OECD countries: 13-30% EU-12 countries: 40 % Various MNCs: 25-50% of total revenue

4. Services needed by Sandvik for effective supplychain and deliveryofgoods Legal services Accounting, book- keeping etc. Taxation services Medical services Computer services Research and development Rental/Leasing Advertising Market research Services incidental to manufacturing Placement of personnel Maintenance and repair Security services Packaging Printing, publishingDesign Building-cleaning services Photographic services Courier services Logistic services Postal services Telecommunications Audio-Visual services Educational services Environmental services Banking services Insurances Health related services Hotels and restaurants Travel agency services Maritime transport – freight Inland waterways – freight Inland waterways – freight Air transport - freight/passenger Road transport – freight/passenger Cargo-handling services Storage and warehouse services Freight transport agency service Feeder services Energy services

5. Services delivered by Sandvik tothe customer Computer services Research and development Rental/leasing Maintenance and repair Management consulting Technicaltesting and analysis services Services incidental tomanufacturing Design Environmental services Financial services Logistics Warehouse services

6. Motives for servicification in firms

8. Services as enablers in global valuechains Financial services Logistics Services Quality Control Services Marketing Services Source: USITC 2011

9. The GVC of video game Minecraft • USA • Germany • England • Scotland • Holland • Canada • Japan • Denmark • Finland • Sweden Plus: UN Habitat, and othercountries (”Community”, marketing and ”3rd Party Servers) Without order ofimportance

10. Trade policy implications Shifttowards a ”Goods AND services” mindset for • Formulationoftrade policy • Liberalisation • Negotiations

11. Service import dependency in the Swedish motor vehicleindustry Input-output tables for Sweden in 2008

12. Trade policy implications Shifttowards a ”Goods AND services” mindset for • Formulationoftrade policy • Liberalisation • Negotiations

14. Thankyou • Studies available at: http://www.kommers.se/In-English/ Servicificaiton ”Everybody is in Services” ”At YourService” [Sanvikcase-study] Services and GVC ”Global ValueChains and Services – An Introduction” ”Minecraft Brick by Brick”