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CASE STUDY 4.1: SEM EFFECTS ON BUSINESS.

  • Highlight what have been the major effects of the SEM on businesses. Are there any surprises?

Answer

Major effects on business have been:

  1. Elimination of administrative tasks in customs and VAT procedures at borders – success in opening borders
  2. Positive effect on pricing and purchasing policies within the EU
  3. Aided expansion, distribution and marketing
  4. But the EU had become more demanding and costs of admin were rising
  5. Forced companies to become more ambitious
  6. Cost of finance had become less of a constraint
  7. The table suggests the biggest impact has been on trade (not surprisingly).
  8. It also suggests that many firms now work in more than 5 EU countries and less are concentrated in the national market.

Surprises:

  1. little effect on productivity and sales
  2. little labour mobility to help with labour shortages
  3. The table identifies that in some areas eg construction the impact has been less significant (possibly not surprising) but service based companies 53% say it has had little impact which is surprising.
  4. And also 47% of Industry says there is little impact.

 

  • Do you feel the European Union is right in the last statement above? Is there any way it can be more proactive?

Answer

The statement suggests that further legislation is unlikely in the near future.

The case suggests there is still work needed in helping labour mobility (especially from the more recent members from the East of Europe who still face barriers in my EU countries).

There are still gaps in legislation and the enforcement on some EU legislation in some countries.

The impact does seem to be limited in services which could either suggest they were already fairly open, or that they remain very closed. In finance the former is likely to be the case, in other areas (eg more personal type services like education and the classic hairdressing), the latter is more likely. In some cases there is little the EU can do, but in others perhaps there is more.

 

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