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Spotlight on the Commerce and Biomedical Healthcare Sectors
added: 2007-10-22

Two new reports from Eurofound’s European Monitoring Centre on Change (EMCC) throw light on the current situation in two sectors undergoing profound change: commerce and biomedical healthcare. Restructuring and developments in information technology are shaping the future of commerce – which includes wholesale and retail trade and the sale of motor vehicles – while biomedical healthcare is harnessing biotechnology to improve diagnostic methods, therapies and vaccines.

The two reports, Trends and drivers of change in the biomedical healthcare sector in Europe and Trends and drivers of change in the European commerce sector, highlight the role that both sectors play in the overall European economy. The commerce sector employs almost 30 million persons in the EU, more than half of them in retail. While biomedical healthcare is a relatively small sector in the EU, it is a source of innovation for other key sectors such as the pharmaceutical industry and the food and beverage sector..

Micro-enterprises and innovation

When compared with other sectors of the economy, the commerce sector has one of the highest proportions of micro-enterprises: more than 90% of all enterprises in this sector are micro-enterprises. The commerce sector represents a significant sector of economic activity, employing 24.5% of all employees in the non-financial sectors. However, it produces just 19.3% of the added value for these sectors, indicating that it has a lower labour productivity than the non-financial economy in general. Innovation has been critical to the development of the commerce sector, in terms of the type of stores, operations, products and levels of branding. The liberalisation of the European market means that it has attracted overseas retailers, resulting in increased competition for domestic companies; however, European retailers have themselves begun to expand both inside and outside the EU. A key challenge facing the sector is to invest in training in order to upgrade the skills and competeces of its workforce in order to remain competitive. Lack of communication and customer service skills as well as personal attributes are indicated as key skills shortages and major obstacles to competitiveness.

Challenges facing biomedical sector

Biomedical companies are involved in expensive and long-term endeavour – especially if they work with drugs. Drug development can take up to 15 years and costs between USD 400 and 900 million for a single product. The main challenge facing the European biomedical sector is competition with the industry in the United States, which is outperforming Europe both in terms of revenue and launching new products. Because of its knowledge-intensive nature, and relatively small size, the European biomedical healthcare sector is facing direct competition from players outside Europe for high-skilled labour. The report also points to other obstacles to growth, such as restrictive legislation, lack of funding for research and public scepticism towards the biotechnology industry. Several European initiatives aim to to overcome these obstacles: these focus on legislation, on increased funding for research and start-ups and on strategic alliances between companies to spread risks and boost productivity.


Source: Eurofund

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