Reform EU to help reshore jobs - CBI European survey
60% of firms would be more likely to reshore back to a Europe with better regulation
A snapshot CBI survey published today shows that while there is a small but growing trend for firms to bring back parts of their business to Europe, from manufacturing to customer services, many more would consider doing so if the European Union (EU) reformed to become more competitive.
The qualitative survey of more than 50 senior business leaders in the UK, Germany, France, Italy and The Netherlands, who together employ over one million workers and generate nearly a trillion pounds in annual revenues, reveals that 60 percent said that EU reform that resulted in better regulation would be the key factor leading to them reshoring parts of their business.
Firms also urged political action to boost labour market flexibility and ensure the boundaries between the European Commission and national parliaments are better respected.
The research carried out by global research agency Millward Brown involved in-depth one-to-one interviews with CEOs, Chief Finance Officers and other senior figures from the world of business. It found that while some progress is being made to reshore jobs back to Europe, there is much more that can be done to accelerate the trend.
40% of respondents are in favour of reshoring in principle, compared to only 6% against. A third of firms surveyed (32%) have moved some degree of activity back to their home market in the last three years.
However, while 23% of firms say they will probably or definitely reshore in the next three years, 62% say they currently have no plans to. It came as a CBI delegation header to Brussels to discuss the issue with the UK Prime Minister, ahead of the European Council.
Katja Hall, the CBI chief policy director, said:
“This snapshot survey shows a real appetite across the Continent to reform the EU and bring more jobs back to Europe. Some companies are already making waves on this front, but it’s clear much more must be done by politicians for firms to accelerate the trend for reshoring.
“European businesses want a Single Market fit for the 21st century, better regulation and a Commission that respects national boundaries, to help reel in some of the jobs that have been lost overseas.
“We need a Europe that is outward-looking, signing more trade deals and opening up fast-growing markets in all corners of the world. The EU must ‘Think Global First’ on regulation, to make sure it remains competitive and helps European firms, not hold them back.
“As for the UK, if we can build alliances to deliver reform in the corridors of Brussels, then we can ensure that the EU supports job creation and growth.”
Of those companies which have reshored, 73% identify better quality within their home market as a critical factor. The importance of having access to the Single Market is highlighted by 54% of respondents who say faster market responsiveness was behind their decision to reshore.
54% also reshored to improve their proximity to their market and half cited the resilience of supply chains in Europe.
Companies called for a number of EU reforms to make it more likely they bring operations back to Europe:
- Reduce the EU regulatory burden on business (60%)
- Make the European labour market more flexible (52%)
- Get a better balance between regulation at the EU and Member State level (39%)
- Make progress to complete the EU digital Single Market (29%)
- Complete the EU Single market in services (25%)
- Sign more EU trade deals with fast-growing economies (21%).
- Among the types of activity either being reshored or business could reshore, are customer-facing services, manufacturing of goods, final assembly of goods and business process outsourcing.
The qualitative survey comprised one-to-one interviews with 53 senior business leaders, including CEOs and Chief Finance Officers. Participants were anonymous but among the responses included:
The business view
“Simplification of regulation would allow you to invest more in development and services that help the customer. The more you do that, the more people would want to bring activities back onshore.” – UK company
“We are seriously considering whether parts of the production outsourced to the Far East should be returned partly to Europe with new manufacturing methods.” – German company
“Clarity in the regulatory framework…in a huge market such as the EU, change only really comes about from the EU taking the lead.” – French company
“We have more or less brought back IT…offshoring was cost driven but now we have moved to being quality driven.” – Dutch company.
The CBI set out its proposals for reform in Our Global Future: The Business Vision for a Reformed EU