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EUROPA - Introduction to the Mechanical and Electrical Engineering ...

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10<br />

neurs associations, unions <strong>and</strong> <strong>the</strong> government. The situation is similar <strong>to</strong> o<strong>the</strong>r continental<br />

European countries which suffer from poor functioning labour markets.<br />

A solution <strong>to</strong> <strong>the</strong> problems of unemployment can be achieved by an upgrading of labour<br />

quality <strong>and</strong> an entry in<strong>to</strong> a more knowledge based economy. However a growth in <strong>the</strong><br />

number of workplaces will only take place in <strong>the</strong> long run. An important lesson <strong>to</strong> be<br />

learned in <strong>the</strong> more mature EU Member States is, that it will be extremely difficult <strong>to</strong><br />

compensate losses of workplaces for low qualified labour by gains in employment for<br />

qualified labour. A necessary prerequisite for such a development is a well functioning<br />

labour market. This is in particular true for countries during a transition period with its<br />

extreme structural changes which result in losses of employment in some sec<strong>to</strong>rs <strong>and</strong><br />

gains in o<strong>the</strong>rs. Only well functioning labour markets can avoid frictions raised by local<br />

disequilibria.<br />

The investigation in <strong>the</strong> engineering sec<strong>to</strong>rs of <strong>the</strong> new Member States provides an initial<br />

impression on strengths <strong>and</strong> weaknesses. Fur<strong>the</strong>r research is suggested <strong>to</strong> evaluate<br />

policies which should be designed <strong>to</strong> streng<strong>the</strong>n <strong>the</strong> competitiveness of <strong>the</strong> engineering<br />

industries. It should be directed <strong>to</strong>ward price <strong>and</strong> technology competition. An in-depth<br />

assessment of <strong>the</strong> challenges from emerging competi<strong>to</strong>rs, namely China is proposed.<br />

This requires a more detailed analysis of trade flows by product groups as well as an<br />

assessment of <strong>the</strong> supply side conditions in <strong>the</strong> newly industrializing economies <strong>and</strong> <strong>the</strong><br />

entrepreneurial potential which contributes <strong>to</strong> <strong>the</strong>ir comparative advantages.<br />

The analysis of <strong>the</strong> technological competition in this study has focused on areas that are<br />

directly related <strong>to</strong> engineering industries. Many of <strong>the</strong>se technologies are mature. In a<br />

more detailed investigation <strong>the</strong> so-called new technologies, such as information <strong>and</strong><br />

communication technology, new materials etc. should be taken in<strong>to</strong> consideration. To a<br />

large extent progress in <strong>the</strong>se technologies is provided by upstream industries <strong>and</strong> has<br />

not been considered in <strong>the</strong> study at h<strong>and</strong>. These technologies <strong>and</strong> <strong>the</strong> related industries<br />

should be integrated in a more comprehensive investigation of <strong>the</strong> competitiveness.<br />

Likewise linkages <strong>to</strong> downstream industries should be taken in<strong>to</strong> account. The spanning<br />

<strong>to</strong>pic for <strong>the</strong> investigation should be an assessment of different policy options <strong>and</strong> <strong>the</strong>ir<br />

impact on <strong>the</strong> development of <strong>the</strong> engineering industries’ competitiveness <strong>and</strong> employment.

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