Sector Selection Criteria for Studies in 2005/06

Approaches toward sector definition

Economic sectors constitute the main level of analysis for e-Business W@tch. From the beginning, the definition of sectors has been based on NACE Rev. 1.1 Divisions and Groups. However, there are different options as regards the degree of aggregation.

• A broader definition of sectors, i.e. a higher level of aggregation, has advantages in terms of covering a larger part of the economy, and with a view to the CATI survey. A larger population of enterprises facilitates the fulfilment of sample quota (in particular in smaller countries). The disadvantage is that the analysis cannot be specific for each sub-sector. In cases where heterogeneous sub-sectors are aggregated, it can be difficult to make general observations or draw conclusions for "the sector".
• If a narrow sector definition is applied, the situation is vice versa. A more concise definition of the industry facilitates the analysis of business processes and e-business impacts, but may cause significant challenges for conducting a survey. A good example for this situation was the aeronautics industry, which was covered in 2005.

From a broader to a more specific definition

The selection and definition of sectors for the 2004/05 period reflected concerns of a too broad definition of sectors. In fact, four out of the ten sectors covered were sub-sectors that had been part of (aggregated) sectors analysed in previous periods. The rationale for "zooming in" on former sub-sectors was that a broad picture for the "whole sector" was available from previous sector studies, and that it appeared to be the right time within the life-cycle of e-Business W@tch to focus the analysis on more specific business activities.

For the sectors studied in 2005/06, the same principle was applied as in 2004/05, i.e. focusing on specific segments within industries that were covered in a different (broader) configurations in previous implementation phases.

Examples for such specific segments were:

• Shipbuilding and repair as a segment of transport equipment manufacturing.
• The Manufacture of footwear as a segment of the textile industry
• Processed agricultural products as part of the food and beverages industry
• Hospital activities as a segment of the health and social services sector
• Telecommunications as a segment of the ICT services sector

In addition, the manufacture of pulp, paper and paper products was included as a new sector not previously covered.

Criteria for the selection of sectors for 2005/06

Based on these general considerations about the adequate level of aggregation at different stages of the e-Business W@tch implementation life-cycle, the following selection criteria were applied in agreement with DG Enterprise and Industry:

• The overall impact of ICT and e-business in a sector. The way how ICT and e-business develop­ments exert an impact on business strategies and competition in a sector does not only depend on the level of ICT diffusion, but also on the "e-suitability" of the goods and services traded by companies in that specific sector.
• Policy relevance. The selection considers the policy relevance from the perspective of DG Enterprise and Industry. For example, the relative dominance of manufacturing sectors has to do with the policy responsibility of the involved units at DG Enterprise and Industry.
• Interest from the industry / public interest. The feed-back which the e-Business W@tch has received from industry representatives and experts signals that the demand for analysis of this type is not equally distributed across all sectors.
• Roll-out strategy. In particular with regard to sub-sectors, some of the selected sectors are follow-up studies to closely related sectors that were covered in previous years. For example, the study on the footwear industry is a follow-up to the one on textile and clothing in 2005.

A quantitative benchmarking or ranking of the relevance of all possible sectors and sector aggregations according to these selection criteria is hardly possible. For example, the articulated interest in results is even less "countable", but is based on impressions and discussions at events and on feed-back on sector studies and reports.

In that sense, the selection criteria should be considered as guidelines, which e-Business W@tch used in co-ordination with DG Enterprise and Industry to draw up the list. There is no attempt to rationalise the selection in the way it was done in 2003, where a more rigid method with quantitative metrics was used ("importance for the economy").