Newsletter November 2016

The European debt crisis has set off a debate about deeper fiscal integration in the European Union. For a while now, there have been discussions about introducing an unemployment benefits scheme to stabilize economic development in the eurozone. Mathias Dolls, deputy head of ZEW's Research Group "International Distribution and Redistribution", talks about the chances and risks for the eurozone associated with a common unemployment insurance scheme.

On 8 November 2016, 59 million US voters – just 30 per cent of the electorate – selected Donald Trump as 45th President of the United States. Trump is a quintessential outsider, a real-estate magnate and reality television star whose appeal is based largely on his promise to upend the political establishment. During his campaign, Trump decried the election process as "rigged" and also waged various attacks against the existing political and economic system.

Does the original purchase price of a house have any effect on its estimated sale price even decades later? What characteristics of a family determine whether their children will ever own their own home? And how does our level of self control influence our decision over whether to buy property through debt-based financing or not? These are just a few of the questions surrounding behavioural economic approaches in property investment that were discussed by around 20 international guest speakers on 3 and 4 November in Mannheim.

The number of companies in the German cultural and creative industries, as well as the amount of revenue in the sector, have recently shown promising growth. While the number of businesses climbed to over 250,000, the total revenue rose by 3.5 billion euros to 150.4 billion euros over the last year. These are the results of a recent monitoring report on the state of the cultural and creative industries in Germany regularly compiled by the Centre for European Economic Research (ZEW) and the Fraunhofer Institute for Systems and Innovation Research (ISI) as part of the Federal government's Cultural and Creative Industries Initiative.

Are single-family homes still a desirable form of housing in a digital and urban society? Why is there an increasing number of vacant single-family homes, particularly in rural areas? These are some of the many issues discussed by various international researchers at the first international Homes-uP Conference organised by the Centre for European Economic Research (ZEW) and the Leibniz Institute of Ecological Urban and Regional Development (IOER) on 13–14 October 2016.

On 10 and 11 November 2016, the Centre for European Economic Research (ZEW) and the University of Mannheim jointly organised the Annual MaCCI Law and Economics Conference within the framework of the Mannheim Centre for Competition and Innovation (MaCCI). About 55 national and international participants attended this year’s event to discuss current challenges of private antitrust enforcement. The interdisciplinary character of the conference was very much in evidence, with a great number of legal scholars and economists presenting their respective viewpoints on the topic.

At its most recent general assembly, the Sponsors' Association for Science and Practice at the Centre for European Economic Research (ZEW) in Mannheim confirmed Dr. Ralf Krieger, member of the board of management at the Freudenberg SE, and Dr. Georg Müller, chief executive at MVV Energie AG, as board members of the ZEW Sponsors' Association. Newly admitted to the association's board was Claudia Diem, board member of the Bank of Baden-Württemberg AG (BW-Bank). She will assume the office of treasurer.

Professor Christoph M. Schmidt, chairman of the German Council of Economic Experts and president of the RWI – Leibniz-Institute for Economic Research presented the Council's 2016/17 Annual Economic Report at the Mannheim Centre for European Economic Research (ZEW) on 16 October 2016. In his speech, he shed light on the reforms which the Council considers necessary to be implemented in Germany and Europe. Around 240 guests and high-ranking actors from the realms of politics, science, economics and society attended the Council member's speech, which formed part of the lecture series Mannheim Economic and Monetary Talks.

A recent article in The Economist raised concerns about the disproportionate economic power wielded by giant global corporations. Earlier this year, in April, the US Council of Economic Advisers (CEA) published a study about the worrying rise in the market concentration of the most powerful American companies. In 1994, the hundred largest companies generated 33 per cent of US GDP; by 2013, that figure had risen to 46 per cent. In response, President Obama ordered that the CEA report to him every six months with recommendations on actions that eliminate barriers to competition. The situation in Germany paints a somewhat different picture.

The digitisation of work has become one of the watchwords of the 21st century. As companies and markets keep up with rapid advances in the digital economy to stay competitive, sceptics fear that the automatization of labour will lead to massive job cuts. The ZEW labour market economist Melanie Arntz discusses what this means for workers and businesses in German and in Europe in general.

The Centre for European Economic Research (ZEW), the Institute for Employment Research (IAB), and the Rimini Centre for Economic Analysis (RCEA) are pleased to announce the third joint workshop on spatial dimensions of the labour market in Mannheim, on 30 and 31 March 2017. The objective of the workshop, financed by funds of the SEEK research programme, is to bring together frontier researchers from the areas of labour economics, regional economics, geography, and other related fields for in-depth discussions. The special focus is on the spatial dimensions of inequality. Theoretical, empirical and policy-oriented contributions are welcome. Please submit extended abstracts (about 800 words) or full draft papers no later than 8 January 2017 via EasyChair.

The Centre for European Economic Research (ZEW) hosts the interdisciplinary conference on flexible work in the digital age on 23 and 24 March 2017 in Mannheim. New technologies such as mobile devices and mobile internet increasingly enable work tasks to be completed outside of the classic workplace and beyond regular working hours. The objective of the conference is to discuss recent scientific contributions on the causes and effects of this development. The event brings together researchers from the fields of economics, work psychology, media psychology, occupational medicine, and sociology. Interested researchers are invited to submit extended abstracts or working papers to ubiwork@zew.de no later than 15 January 2017.

The Board of Directors at the Centre for European Economic Research (ZEW), ZEW President Professor Achim Wambach, PhD, and the institute's Director of Business and Administration Thomas Kohl gave an official send-off to six long-serving members of the scientific advisory council prior to an evening lecture event at ZEW. Former ZEW President Prof. Dr. Dr. h.c. mult. Wolfgang Franz gave a speech lauding the outstanding service of the six advisers with whom he had worked closely for many years.

During a visit at ZEW, the CDU party member and member of the State Parliament, Georg Wacker, was informed about the subject of education and training in the context of digitalisation. He was welcomed by ZEW Director of Business and Administration Thomas Kohl. Prof. Dr. Irene Bertschek, head of ZEW's Research Department "Information and Communication Technologies", as well as Steffen Viete, a researcher in her department, explained how the advancing digitalisation changes work processes, and what effects this has on the requirements for employees in businesses.

Later on, they engaged in a lively discussion about the implications of this development for education and further training.

Small and medium-sized enterprises (SMEs) in Germany rely on specialisation and finding niches in the market. This continues to be a model for success in the future. Markets and products are, however, subject to constant change. In order to maintain their success, SMEs must maximise their ability to strategize. This is the finding of a new study carried out by the Centre for European Economics Research (ZEW) and Prognos, on behalf of the Federal Ministry of Economic Affairs and Energy.

The progressing digitalisation is changing the competency and qualification requirements of employees among businesses in the manufacturing and services sector: employees are increasingly expected to adapt to the changed processes in the working world 4.0. At the same time, businesses consider the German educational system flexible enough to adapt to the changing requirements of the digital era. These are the findings of a recent representative survey among businesses conducted by the Mannheim Centre for Economic Research (ZEW) in collaboration with the Institute for Employment Research (IAB) in Nürnberg, on behalf of the National Academy of Science and Engineering (acatech).

The ZEW-CS Indicator for the economic sentiment in Switzerland continues to improve in November 2016. Compared to the previous month, it increased by 3.7 points to a current reading of 8.9 points. This marks the third successive rise of the indicator. In contrast, the assessment of the current economic situation in Switzerland deteriorates: the corresponding indicator declines by 3.2 points to a level of 14.7 points. Almost three quarters of the surveyed experts expect the economic development to remain unchanged within the next six months. Furthermore, a large majority of 85 per cent of the respondents considers the current economic situation to be normal.

The ZEW Indicator of Economic Sentiment for Germany has increased substantially in November 2016. The index has improved by 7.6 points compared to October, now standing at 13.8 points (long-term average: 24.0 points). "The ZEW Indicator of Economic Sentiment has increased for the fourth consecutive time – not least due to the positive economic figures seen in the US and China. The renewed increase is indicative of a stronger economic growth in the coming six months. The election of Donald Trump as US President and the resulting political and economic uncertainties, however, have made an impact.

After the election, the economic sentiment has been less positive than before," comments ZEW President Professor Achim Wambach.

One in two businesses in the German business economy expects job and task profiles to change as a result of the progressing digitisation in the next two years. Against this backdrop, around 67 per cent of the businesses consider further training on topics relevant for digitisation as very important or important for the company. The share of companies giving a high or very high priority to further training is particularly large in the highly digitalised ICT sector.

These are the findings of the Monitoring Report DIGITAL Economy 2016, conducted by the Mannheim Centre for European Economic Research (ZEW) in collaboration with TNS Infratest, on behalf of the Federal Ministry for Economic Affairs and Energy.

The increase in prices for the last mile causes a demand increase for high-speed, fibre-based technologies among households. Such price increases prompt customers to replace slower, copper-based wire technologies with high-speed fibre-optic cables. Nevertheless, it is not enough for policy-makers to make price adjustments so as to accelerate the expansion of fibre-based broadband technologies and to increase demand for broadband services on a national and EU level. Instead, new instruments need to be introduced, particularly on the customer side.
 

These are the findings of a study by the Centre for European Economic Research (ZEW), which analysed EU-wide pricing policies for the last mile.

Republican Party nominee Donald Trump has won the election of the 45th President of the United States. The President of the Centre for European Economic Research (ZEW), Professor Achim Wambach, PhD, comments on the result of the U.S. Presidential Election.

The latest survey carried out between 17 October – 2 November 2016 indicates that expectations for the Chinese economy have slightly recovered from the declines seen in August and September. The CEP Indicator, which reflects the expectations of international financial market experts regarding China's macroeconomic development over the coming twelve months, has increased by 4.0 points to a current total of minus 0.1 points. However, the Indicator still lies significantly below its long-term average of 5.4 points, seen in the period from mid-2013 to October 2016.

The statutory minimum wage, which became binding in Germany on a national level in 2015, has proved to be a greater burden on young companies than previously expected. Besides the necessary wage adjustments, start-ups have also been struggling with additional bureaucratic requirements, such as time sheets and less flexibility regarding compensation schemes. As a result, young companies may suffer from negative effects. These are the findings of a survey among start-ups conducted by the Centre for European Economic Research (ZEW) within the framework of the Mannheim Start-up Panel.

According to the twelve-month moving average of the ZEW-ZEPHYR M&A Index, mergers and acquisitions (M&A) with or by German businesses continue on the path to new highs. Besides a minor downward trend in 2015, the twelve-month average, which is based on the number of M&As, has grown continually since the beginning of the merger wave back in 2011. In August 2016, the twelve-month average reached a level of 96 index points, which is the highest value observed since 2009. These are the findings of a study carried out by the Centre for European Economic Research (ZEW) on the basis of the Zephyr database of Bureau van Dijk.

According to data released today by Eurostat, the European Statistical Office, the number of information and communication technologies (ICT) specialists in the EU rose by almost 1.5 million people in the period between 2011 and 2015. Germany, in particular, saw a significant increase. This development was also confirmed in the recently published Monitoring Report DIGITAL Economy 2016, in which Irene Bertschek, head of ZEW's Research Department "Information and Communication Technologies", was actively involved. With regard to the development of ICT specialists in Germany she finds that,

The imminent departure of Great Britain from the European Union won't affect Germany in terms of foreign trade as much as it does other economies, such as Belgium, Switzerland and the Netherlands. This is the result of a preliminary analysis in the latest Country Index for Family Enterprises, carried out by the Mannheim Centre for European Economic Research (ZEW) on behalf of the Foundation for Family Businesses. The index shows that the pharmaceutical industry is the German sector that will be most affected by Brexit due to its high dependency on export.

Several branches of the transportation industry – including aerospace and railway construction – are also considered vulnerable since they are exposed to high import risks.

Our publications are available for download in PDF format. PDF files can be viewed using for example the Acrobat Reader, which you can download for free at https://acrobat. adobe. com/us/en/acrobat/pdf-reader. html

Rebecca Liu; Christian Rammer
The Contribution of Different Public Innovation Funding Programmes to SMEs' Export Performance

Bernhard Dachs; Martin Hud; Christian Koehler; Bettina Peters
Innovation, Creative Destruction, and Structural Change: Firm-Level Evidence from European Countries

Bernhard Dachs; Martin Hud; Christian Koehler; Bettina Peters
Employment Effects of Innovations over the Business Cycle: Firm-Level Evidence from European Countries

Christian Rammer; Sandra Gottschalk; Michael Peneder; Martin Wörter; Tobias Stucki; Spyros Arvanitis
Does Energy Policy Hurt International Competitiveness of Firms? A Comparative Study for Germany, Switzerland, and Austria

Bettina Müller; Martin Murmann
The Workforce Composition of Young Firms and Product Innovation – Complementarities in the Skills of Founders and Their Early Employees

Thomas Schwab; Maximilian Todtenhaupt
Spillover from the Haven: Cross-Border Externalities of Patent Box Regimes Within Multinational Firms

Jürgen Janger; Torben Schubert; Petra Andries; Christian Rammer; Machteld Hoskens
The EU 2020 Innovation Indicator: A Step Forward in Measuring Innovation Outputs and Outcomes?

Maresa Sprietsma
Which Incentives to Increase Survey Response of Secondary School Pupils?

Daniel Arnold, Melanie Arntz, Terry Gregory, Susanne Steffes, and Ulrich Zierahn
Herausforderungen der Digitalisierung für die Zukunft der Arbeitswelt (Challenges of Digitalisation for the Future of Work)

Peter Heindl and Andreas Löschel (2016)
Analyse der Unterbrechungen der Stromversorgung nach § 19 Abs. 2 StromGVV (Analysis of Disconnections of Power Supply According to Section 19(2) of the Electricity Default Supply Ordinance (StromGVV))

Daniel Arnold, Sebastian Butschek, Dana Müller, and Susanne Steffes (2016)
Digitalisierung am Arbeitsplatz (Digitalisation at the Workplace)

Birgit Gehrke and Christian Rammer (2016)
Innovationsindikatoren Chemie 2016 (Innovation Indicators in the Chemical Industry 2016)

Jörg Ohnemus, Daniel Erdsiek and, Steffen Viete (2016)
Nutzung von Crowdworking durch Unternehmen: Ergebnisse einer ZEW-Unternehmensbefragung (The Role of Crowdworking in Companies: Results of a ZEW Survey)

Melanie Arntz, Terry Gregory, Simon Jansen, and Ulrich Zierahn (2016)
Tätigkeitswandel und Weiterbildungsbedarf in der digitalen Transformation (Change of Activities and Need for Further Training in the Course of Digital Transformation)

Carbon Neutral Courier Services (CO2URIER)

Career Experiences and Stock Market Expectations of Financial Professionals

Does a Minimum Wage Boost Automation and Outsourcing?

Innovationstudio Leibniz: Develop of Innovation Capabilities of Research Organisation and Integration of SMEs in Research Projects (Science4KMU)

Kopernikus-Project "System Integration": ENavi

Potential of Independent Fiscal Boards and Early Warning Systems for Crisis Prevention

The Role of Individual Characteristics in Risk Information Presentation

Speaker: Michael Ungeheuer (University of Mannheim)
Location of the event: ZEW, Mannheim

Speaker: Dr. Dominik Grafenhofer (Max Planck Institute for Research on Collective Goods)
Location of the event: ZEW, Mannheim

Speaker: Dr. Florens Flues (OECD)
Location of the event: ZEW, Mannheim

Speaker: Sandro Gleave (German Federal Cartel Office)
Location of the event: ZEW, Mannheim

Speaker: Dr. Conny Wunsch (University of Basel)
Location of the event: ZEW, Mannheim

Speaker: Prof. Martin Zagler (Vienna University of Economics and Business)
Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Speaker: Prof. Dr. Dr. h.c. mult. Hans-Werner Sinn (Former President of Ifo Institute (1999-2016))
Location of the event: ZEW, Mannheim

Picture Credits: Press Release of 24 November 2016: ©fotolia.com/Kristina Greke, Press Release of 18 November 2016: ©iStock.com/peoplesimage, Press Release of 16 November, 2016: ©iStock.com/George Clerk, Press Release of 10 November, 2016: @iStock.com/PinkBadger, Press Release of 9 November, 2016: iStock.com/3dfoto, Press Release of 31 October, 2016: ©istock.com/BraunS, Press Release of 20 October, 2016: ©iStock.com/George Clerk
All further pictures: ©ZEW