Study on the Establishment of a Framework for Processing and Analysing

Maritime Economic Data in Europe

Workshop

Venue: Business Center - Multiburo
Square de Meeûs 38/40
1040 Brussels

Participants:

Workshop minutes

MORNING SESSION

The morning session of the workshop started with a short introduction from DG MARE followed by the presentation of the preliminary results of the study (Alessandro Pititto), presentation of framework for maritime economic data in Norway (Tord Dale), and presentation of French Maritime Accounts (Régis Kalaydjian). All the presentations are attached to the Minutes.

Introduction and scope of the workshop by Iain Shepherd (DG MARE)

It was highlighted that, through this study, the EU Commission would like to build a knowledge base to support policy and evidence-based decision making in the field of Blue Growth

The Commission services need to present a staff working document on blue growth in a Ministerial meeting in Malta April 2017. This will almost certainly include a section on the state of the blue economy. Insights from the study will feed into this.

Presentation of the preliminary results of the study by Alessandro Pititto (Cogea)

A presentation (attached to the Minutes) was given on the preliminary findings of the study, with a set of graphs that showed the size and main trends of the blue economy. The Contractor received some questions and comments:

1. DG MOVE:

   • Suggested that a benchmark analysis on marine equipment is carried out, so as to compare the preliminary findings of the contractor with the study carried out by Balance Technology Consulting in 2014

   • Recommended that figures on maritime transport for 2013 and 2014 be analyzed, because they should show an increase in employment. The contractor replied that the figures on employment are taken from Eurostat and are not further processed.

   • Some concerns were raised on the figures for tourism in Greece, which appeared relatively low.

   • It was suggested that the contractor consider using a deflator when presenting figures in the time series.

   • As far as tourism is concerned, it was recommended that business travelers’ spending be excluded from the calculation.

     1. The EC and the contractors replied that Separate figures can be estimated.

2. DG RTD:

   • Suggested that the figures are benchmarked against other marine economy statistics, so as to seek to understand the differences. E.g. compare with marine industry figures from Sea Europe, Trade Winds and the DG Move Vademecum of Josep Casanovas.

   • Was surprised that the size of the ‘Marine equipment’ sector is relatively low, as it is believed to be larger than ship building. DG MOVE noted that engines were included within ship building, but enquired about marine electric motors, pods, power electronics, propellers, steering gear systems, paints, communications, exhaust treatment systems, ballast water treatment, lifesaving appliances etc.?

     1. The contractor replied that there are no data that could go down to the requested level of detail. However, a more comprehensive analysis of the sector shall be carried out anyway, because the Contractor only considered equipment that can be installed exclusively on ships.

   • Was surprised that Finland was not one of the top-manufacturing countries of marine equipment, even though they are home to Wartsila which is one of the largest marine equipment companies in the EU.

     1. The contractor replied that it is probably because the method used only captures a small part of marine equipment.

   • Asked whether figures will be provided for the European Economic Area in addition to the EU 28 (including Norway and Iceland).

     1. The contractor replied that the geographic scope of the study is the EU-28.

   • Was surprised that the public expenditure on defence (which should include the expenditure for naval ships) was so small, considering the cost of naval ships and that almost half of EU ship building is military.

   • Asked why Greece figures on tourism are relatively low. According to Wikipedia, Greek tourism is around 18% of GDP, i.e. almost €40bn. The contractor’s report quoted only €16Bn. The figure for Germany was high, even though it has a small coastline.

     1. The contractor argued that this probably depends on the method used. However, further analysis will be carried out to look into this issue.

     2. The EC noted that this is not surprising. Greece’s population and GDP are much smaller. It is the ratio to national GDP or total number of people employed that are different.

   • Asked to investigate why the employment graph showed a jump of 30,000 maritime transport jobs from 2013 to 2014.

   • Asked whether the employment figures can be considered representative? For example, in shipbuilding, the trend is to employ on-site workers via contracts with external suppliers. Would these be included in the employment figures? Does it account for the reduced employment?

     1. It was noted that the jobs attributable to external supplies are estimated through input-output tables and are included in the indirect impact of the blue economy.

   • There was a boom in the European production of cruise ships, but this was not apparent in the graphs. The contractor replied that no graphs on the production on ships was prepared for the workshop, but the data on shipbuilding are taken from Eurostat and not processed further, therefore if there was a boom, there should be a trace of it in the data on turnover, value added and employment.

3. < >

   Asked How double accounting of turnover is avoided in the case of Processing and preserving of fish, crustaceans and mollusks (10.2) and Freshwater fishing (03.12)? The contractor replied that double-accounting of turnover is not avoided. Users of the database should not aggregate turnover of different sectors, but they should use value added, instead.

4. Suggested that basic prices (in monetary terms) are used for tourism spending.

5. ESPO

   • Noted that employment in the port sector seem low, and asked how the maritime proportion of cargo handling was estimated.

6. WindEurope

   • There is a discrepancy between the data on wind energy calculated by the Contractor and WindEurope’s data. According to WindEurope, the turnover of wind energy is €76 billion (based on the value chain analysis). WindEurope advocated the need to use data from the base when they are not available top-down. Trade associations often have the data. It was agreed to look into the approach of WindEurope and elaborate a method to estimate the size of offshore wind energy.

Presentation of the economic maritime data in Norway by Tord Dale (Maritimt Forum)

It was remarked that the Norwegian framework only covers the direct impact of the maritime economy. The indirect impact is not estimated, because, for geographical reasons, in the case of Norway it would encompass the entire economy.

Attendees suggested that a comparison among the EU, and Norway would be useful. In this sense, DG MARE commented that the comparison could be possible depending on the availability of the information reported by Norway, however there are some sectors (e.g. Tourism), which Norway is not reporting.

Presentation on French Maritime Accounts by Régis Kalaydjian (Ifremer)

Régis Kalaydjian highlighted that Ifremer are not estimating the indirect impact and their proxies are based on physical indicators (quantity). The full presentation is attached to the minutes. Apart from the specific performance of France’s maritime economy, some key issues were:

• The French framework also revolves around the NACE classification.

• As far as employment is concerned, it was remarked that it is better to use Full-time equivalent units (FTE) rather than the simple number of persons employed.

• The size of tourism is estimated based on tourism satellite accounts.

• France maritime accounts do not include ‘marine equipment. It is believed that the available data are too poor to produce satisfactory results. Marine equipment is captured under shipbuilding which includes notably ship repair, leisure boats and equipment.

• Nuclear plants are considered part of the blue economy. Several of them are located in coastal areas so that they can use sea water for power plant cooling.

• Very few data are available at local level (e.g. NUTS 2 and 3) so, it is necessary to use proxies.

• In some cases, it is necessary to accept that there are data gaps. Attempts at filling them may produce unreliable results.

• Proxies are sometimes necessary, but their correct use requires an analysis of industries and a quality assessment.

AFTERNOON SESSION

The afternoon session was dedicated to the discussion on challenges/weaknesses and recommendations. The discussion was moderated by Rod Cappell (Poseidon).

The first challenges discussed concerned the timeliness of information. It was noted that, generally speaking, the most recent data available in the database developed by the contractor date back to 2014. This is because the framework for data collection revolves around the data made available by Eurostat Structural Business Statistics, which are usually published with a two-year time lag.

It was pointed out that such a time lag can be acceptable for the kind of data use which is made by public administrations (including the EU), but it is incompatible with the needs of industry, which generally needs ‘fresher’ data for its decision-making. Some attendees pointed out that, however, various industrial sectors probably already have the data they need (some of which would be kept confidential). This seems to contradict the opinion of the ENMC, which, by contrast, would welcome more recent data on the blue economy.

Considering that it is unlikely to be feasible to reduce the current time lag, it was discussed what other solutions could be developed to solve this issue. A first option, for the future, could be to complement the framework developed in the study, largely based on statistical data, with qualitative information collected through interviews with industry players. This would make it possible to have more recent data, albeit not as rigorous as that made available by Eurostat. Nonetheless, it was suggested that in some cases a businessman would far rather make a decision based on the most recent – yet not accurate – data available, than wait a couple of years standing still. Interviewing industry players would also make it possible to attempt to forecast future trends in the blue economy (the so-called ‘sentiment’).

It was also noted that sector associations often have more recent data than Eurostat, and this 'bottom-up' data could be collected and used. At the same time, it was pointed out that there may be a conflict of interest whereby sector associations may tend to overestimate or underestimate the performance of their sector. For this reason, it was recommended that, if in the future data from sector associations are included in the framework, these will always be a complement to rigorous statistical data.

DG RTD pointed out that comparing the data from sector associations with the data from Eurostat, could in itself be interesting and enlightening.

Based on this consideration, the discussion moved on to analyse the fitness for purposes of the NACE classification system when it comes to the blue economy. It was highlighted that the NACE classification is a classification according to the kind of economic activity, and as such does not always make a distinction between marine and non-marine activities (e.g. extraction of oil and gas does not distinguish between onshore and offshore). This can be overcome by mapping a whole sector, using interviews with individual companies and operators as source, and EWEA said that it is indeed doing this, splitting wind energy investments into onshore and offshore. However, a proxy (multiplier effect of each turbine installed) is still needed to estimate the employment generated by offshore investment. The process is also time-consuming. At the same time, it was noted that the NACE classification should not be abandoned, given that it is developed in the framework of the International Standard Industrial Classification of All Economic Activities (ISIC), decided at UN-level, thus ensuring comparability between the blue economy of countries worldwide.

Considering this specific property of the NACE classification, Eurostat pointed out that, although a revision would undoubtedly benefit the framework for measuring the size and trends of the blue economy, modifying the NACE classification is not be feasible in the short-term, as an international agreement would be necessary.

A solution proposed to overcome this issue, was to develop a series of ‘tags’ that could be attached to certain NACE codes that mix together marine and non-marine activities (e.g. biotechnology, extraction of oil and gas, production of energy, etc.). The tag could work in such a way that entrepreneurs are asked to self-report how much of their turnover, value added, and employment could be attributable to the maritime-oriented component of their business activity. This method has the advantage of being relatively feasible in the short-term, but the disadvantage of not being particularly rigorous. It was decided that the idea could be further analyzed, and, if feasible, proposed in the final recommendations of the study.

Once again, it was stressed that another method to obtain data that are not easily available through Eurostat could be to interview companies. For example, in the Netherlands, at a given moment during the year, the maritime cluster asks all the firms for specific information. In this way, it is also possible to have comparable data across industries. The EC noted that this method can be used at country level, but most certainly not at EU level.

Another issue discussed was the general lack of data on emerging activities, such as blue biotechnology, deep-sea mining, renewable energy (other than wind), etc. As suggested in the presentation by Régis Kalaydjian, it was agreed that in certain cases it is wiser to accept lack of data, rather than venturing into estimations that would inevitably produce unreliable results. At the same time, it was stressed that it is fundamental to keep monitoring emerging sectors and their investment potential, so that, should a reliable data source emerge, they could be included in the framework. Even though some emerging sectors cannot be measured with a reasonable degree of confidence today, it does not mean that a new method might not be devised in the future, when more data is available. Furthermore, by integrating the current quantitative framework with qualitative information, it should be possible to at least obtain information on what is going on in the market and what are the future prospects. It was also suggested that a system could be set up where industry players contribute information on their businesses in exchange for free and full use of aggregate and other information in the data base. Such a system is clearly beyond the scope of the study, but could be an extension of it in the future, provided that statistical information and qualitative considerations remain clearly separate.

The discussion then moved on to which economic activities are not capture in the current framework, but could be added in the future. A common request concerned maritime education, which today seems very difficult to measure. Information such as the money spent by Member States in maritime schools and universities, and the number of students would be extremely valuable. It was noted that in France there is some data on education at PhD level, but it is anyway difficult to calculate how many students can be considered ‘maritime’. The EC noted that It might be interesting to know to what extent a specialist rather than general education benefits employment prospects in the maritime industry.

Other activities that could be worth including are energy plants and / or server farms, located near seawater to take advantage from its cooling power. Locating an establishment near seawater is an activity that perfectly fits the working definition of maritime economy developed by the Contractor.

It was also suggested that in the future ecosystem services should also be taken into account.

Some of the stakeholders asked DG MARE what is the final purpose of the study. The aim of the study is to cross-check the current method that mainly uses Eurostat’s structural business statistics, tourism statistics and supply and use tables and to fill in gaps using data from other sources. This will contribute to keeping track of the performance of the blue economy. It will always be impossible to estimate absolute numbers but orders of magnitude and trends are useful.

Based on the discussions (i.e. marine equipment), DG MARE asked the contractor to carry out some benchmarking exercise comparing sources to understand discrepancies and rise and falls from year to year.

DG MARE has to figure out the next step in the process and how to develop it in the future, how to keep the database updated, how much of should be accessible to the public at large and how it should be presented to the wider public. DG MARE expects a set of recommendations from the Contractor as to how the database could be used and how much resources it will need for future regular updating (e.g. financial and personnel resources). It was also highlighted by DG MARE that it is really important that data – at least aggregate data – also be presented in a way that it is easily understandable for non-specialists.

The Contractor received some suggestions on how the final database should be:

• It should aggregate figures by theme/sector (as this will be very important for DG MARE's work in preparing briefings, presentations…) as well as for the whole blue economy.

• It should also present values for the whole blue economy, for instance by using pie charts or tables.

• There should always, in each aggregation, be a note on the degree of confidence and reliability of the underlying data, explaining where proxies have been used.

• Where this makes sense in terms of having data over a sufficiently long time scale, trends should be presented in a visual manner.

• It is important to create an interactive dynamic interface for the database, so as to make it user-friendly for future users.

• Users must get the right and the technical possibility to exclude data sets (for instance, on coastal tourism, on inland water transport) when they extract data from the database (modular approach)

• The data base must be accompanied by a 'manual' which explains how to operate it, how to obtain and add data, how to use the proxies