Wednesday, July 29, 2009
[IWS] OECD: RESPONDING TO THE ECONOMIC CRISIS: FOSTERING INDUSTRIAL RESTRUCTURING & RENEWAL [July 2009]
IWS Documented News Service
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Organisation for Economic Cooperation and Development (OECD)
RESPONDING TO THE ECONOMIC CRISIS: Fostering Industrial Restructuring and Renewal [July 2009]
http://www.oecd.org/document/26/0,3343,en_2649_34173_43387482_1_1_1_1,00.html
or
http://www.oecd.org/dataoecd/58/35/43387209.pdf
[full-text, 51 pages]
Across most OECD countries the global economic crisis has battered GDP, trade, and employment. The hardest hit industries include automotive and construction, where existing problems have been aggravated by the crisis. This < http://www.oecd.org/dataoecd/58/35/43387209.pdf> July 2009 report examines the impact of the global economic downturn on the long-term competitiveness of the automotive and construction sectors and explores how governments can support restructuring and renewal.
In the automobile industry, demand has fallen rapidly as consumers and firms have postponed costly purchases. Many firms are struggling to remain competitive in an environment where competition, legislation and customer demand for more efficient cars and more value for money were already putting pressure on existing business models prior to the crisis.
[GRAPHS]
The construction sector is also faced with a considerable slump in consumer and investment demand. From 2008 through the first half of 2009, fewer residential permits were issued in almost all OECD countries. Most countries experienced reductions of more than 10 percent; but several countries experienced drops of more than 30%.
[CHART]
The crisis has worsened overcapacity problems in both industries.
However, the crisis also provides an opportunity for both governments and the private sector to transform these industries. In the automobile sector, ballooning losses already have accelerated the development of strategic alliances, which could contribute to more joint R&D and production platforms and a more effective division of labour. As existing players restructure, new or emerging players may enter the market by meeting the demand for cleaner cars. In the construction industry, the growing demand for 'greener' buildings and more sustainable cities can foster innovation.
Governments have a vital role to play in the crisis, steering the shift toward more sustainable industries. Stimulus packages can stimulate short-term demand while also fostering long-term growth. Smart policy tools can strengthen the long-run potential of OECD economies while supporting industrial renewal. They include seed capital funds, policies fostering entrepreneurship and start-ups, skills upgrading and training, and investments in capabilities for innovation. Governments should avoid protectionist policies and all forms of aid that postpone needed restructuring.
Table of Contents
Executive Summary ....................................................................................................................................... 5
Responding to the economic crisis Fostering industrial restructuring and renewal .................................... 7
Introduction ............................................................................................................................................... 7
The crisis and creative destruction .............................................................................................................. 8
Impact of the crisis on innovation and industrial renewal ....................................................................... 8
Impacts on firm entry and exit ............................................................................................................... 11
Impacts on innovation in large firms ...................................................................................................... 13
Impacts on knowledge flows and global value chains ........................................................................... 14
The crisis and the automobile and construction industries ...................................................................... 16
The economic crisis from the perspective of two industries ................................................................. 16
The automobile industry ........................................................................................................................ 18
The construction industry ...................................................................................................................... 30
Impacts on supplying industries ............................................................................................................. 39
Driving industrial restructuring and renewal: what role for policy? ......................................................... 41
A new role for government in driving structural change? ..................................................................... 41
Policy and the future structure of OECD economies ............................................................................. 44
BIBLIOGRAPHY ............................................................................................................................................. 46
ANNEX ......................................................................................................................................................... 48
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Organisation for Economic Cooperation and Development (OECD)
RESPONDING TO THE ECONOMIC CRISIS: Fostering Industrial Restructuring and Renewal [July 2009]
http://www.oecd.org/document/26/0,3343,en_2649_34173_43387482_1_1_1_1,00.html
or
http://www.oecd.org/dataoecd/58/35/43387209.pdf
[full-text, 51 pages]
Across most OECD countries the global economic crisis has battered GDP, trade, and employment. The hardest hit industries include automotive and construction, where existing problems have been aggravated by the crisis. This < http://www.oecd.org/dataoecd/58/35/43387209.pdf> July 2009 report examines the impact of the global economic downturn on the long-term competitiveness of the automotive and construction sectors and explores how governments can support restructuring and renewal.
In the automobile industry, demand has fallen rapidly as consumers and firms have postponed costly purchases. Many firms are struggling to remain competitive in an environment where competition, legislation and customer demand for more efficient cars and more value for money were already putting pressure on existing business models prior to the crisis.
[GRAPHS]
The construction sector is also faced with a considerable slump in consumer and investment demand. From 2008 through the first half of 2009, fewer residential permits were issued in almost all OECD countries. Most countries experienced reductions of more than 10 percent; but several countries experienced drops of more than 30%.
[CHART]
The crisis has worsened overcapacity problems in both industries.
However, the crisis also provides an opportunity for both governments and the private sector to transform these industries. In the automobile sector, ballooning losses already have accelerated the development of strategic alliances, which could contribute to more joint R&D and production platforms and a more effective division of labour. As existing players restructure, new or emerging players may enter the market by meeting the demand for cleaner cars. In the construction industry, the growing demand for 'greener' buildings and more sustainable cities can foster innovation.
Governments have a vital role to play in the crisis, steering the shift toward more sustainable industries. Stimulus packages can stimulate short-term demand while also fostering long-term growth. Smart policy tools can strengthen the long-run potential of OECD economies while supporting industrial renewal. They include seed capital funds, policies fostering entrepreneurship and start-ups, skills upgrading and training, and investments in capabilities for innovation. Governments should avoid protectionist policies and all forms of aid that postpone needed restructuring.
Table of Contents
Executive Summary ....................................................................................................................................... 5
Responding to the economic crisis Fostering industrial restructuring and renewal .................................... 7
Introduction ............................................................................................................................................... 7
The crisis and creative destruction .............................................................................................................. 8
Impact of the crisis on innovation and industrial renewal ....................................................................... 8
Impacts on firm entry and exit ............................................................................................................... 11
Impacts on innovation in large firms ...................................................................................................... 13
Impacts on knowledge flows and global value chains ........................................................................... 14
The crisis and the automobile and construction industries ...................................................................... 16
The economic crisis from the perspective of two industries ................................................................. 16
The automobile industry ........................................................................................................................ 18
The construction industry ...................................................................................................................... 30
Impacts on supplying industries ............................................................................................................. 39
Driving industrial restructuring and renewal: what role for policy? ......................................................... 41
A new role for government in driving structural change? ..................................................................... 41
Policy and the future structure of OECD economies ............................................................................. 44
BIBLIOGRAPHY ............................................................................................................................................. 46
ANNEX ......................................................................................................................................................... 48
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
# posted by SBasefsky : 10:34 AM
