EU's Single market strategy can be a key driver for competitiveness, growth and job creation
European Commission's plans are a step in the right direction says Eurociett's Michael Freytag.
EU Commission's approach to upgrading the single market is a step in the right direction | Photo credit: Fotolia
The holistic approach laid out in the European Commission’s Communication “Upgrading the Single market: more opportunities for people and business” is certainly a step in the right direction in maximising the benefits of the single market and in driving economic growth and job creation.
By valuing the role of business services and linking the single market strategy with other relevant initiatives such as the Energy Union and the Digital Single Market strategy, it will serve to drive synergies and avoid unnecessary duplication.
Business services are important drivers of growth and prosperity encompassing a wide range of activities from recruitment to architecture and accounting to engineering services.
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The Commission’s intention to facilitate provision of services in other EU member states via harmonised forms and the creation of an electronic document repository demonstrates that it understands this.
The ‘services passport’ suggestion is a very interesting idea, although it of course remains to be seen how this would actually be designed and implemented.
The fact is that both EU and national policies need to better recognise the role of business services and unlock their contribution to job creation and competitiveness by removing restrictions and facilitating cross border service provision.
I would however counsel that a legislative approach to simplifying existing procedures and requirements should be done in close consultation with those key stakeholders representing the business services and services sectors.
Facilitating a dialogue with a platform such as the European Business Services Alliance will ensure that policymakers identify the right approach and avoid complication.
Dialogue with stakeholders should also lead to the recognition that unjustified barriers to cross-border business services - including employment and recruitment services - will need to be removed if the single market is to be strengthened. This is rightly highlighted in the Single Market Strategy.
One element that is an essential prerequisite is the smart regulation of employment and recruitment services. Experience shows that not only does this enhance a countries’ competitiveness but it also contributes to job creation and labour market participation.
To assess key conditions for providing services in the single market, Eurociett has been working with the Boston Consulting Group to develop a Smart Regulation Index on private employment services.
They include freedom of establishment and freedom to provide services. Two further dimensions look at the labour market contribution of private employment services and cover the right to negotiate and the active involvement in labour market policies.
The Netherlands, Italy and the UK currently top the index while emerging markets such as Turkey and Estonia are characterised by less efficient and less smart regulation.
The employment and recruitment services sector provides a good example of a business service sector that facilitates the single market.
It does this by enabling labour markets in four key ways: It enables work and delivers more than one million additional jobs in Europe each year; it enables adaptation and serves 1.5 million companies in Europe per annum with the right talent to succeed; it enables security and helps people to transition from job to job so that they always remain in work; and it enables prosperity by supporting companies to grow and minimising costs for governments in the form of unemployment benefits.
There are increasingly exciting opportunities for the business services sector in the emergence of new economic models and ways of working such as the collaborative or shared economy.
The Commission's communication on a European agenda for the collaborative economy published on 2 June rightly recognises this and identifies collaborative economy models, which include online staffing services, as developing significantly and providing growth and jobs.
It is important to remember though that these new models can also pose challenges in areas such as taxation, health and safety norms as well as social security.
These issues need to be considered in the context of the wider changes taking place in the world of work.
We urge the Commission to take a fresh approach and focus on compliance with existing laws while developing guidance on how the current acquis could be applied to collaborative economic models.
At the same time they should take the opportunity to assess the remaining barriers and restrictions which continue to hamper job creation and growth in this brave new world of work.
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