OBJECTIVES

The objectives of the project are the following

(1) Upgrading the theoretical knowledge about services:

There is a clear need to review the current definition, classification, traditionally accepted distinctions between services and products or between manufacturing and service industries, and so on, in order to integrate the newest thinking and the results of the most recent scientific work in the field. Much of the current scientific debate is based on very recent work that tends to fundamentally change the understanding of services. This theoretical knowledge will be integrated in a more functionally valuable approach for assessing the economic and social role of the services, in predicting their evolution and impact on the economy as a whole. It will be also integrated in improving the university education for service sector related professionals, as well as in designing new research and development projects that may be addressed through master and doctoral programs. It will also stimulate the cooperation among universities.

(2) Estimating the current development of the service sector in Romania, including regional disparities, in relation with the situation in the European Union and in the rest of the world:

As in a majority of the countries of the world the existing statistical information on services is not used in the most useful way for decision and policy makers. Relying, also, on the use of new or improved definitions and classifications the existing data bases will be intensively and extensively exploited, using econometric models in order to perform a deep and multi-focus analysis. Such analysis is expected to allow the project team make comparative assessments between the Romanian regions to emphasise disparities, and to measure the relative development gap in relation with European Union Member States. Another critical issue addressed through this objective is to get some empirical indication regarding the Romanian service industries more susceptible to enjoy a certain comparative and/or competitive advantage.

(3) Analysing key service industries in order to identify the presence and the sources of comparative and competitive advantages or disadvantages for Romania:

Services are very heterogeneous. Literature indicates that some services are labour intensive and others are knowledge intensive. Studies performed at the international level, especially in the European Union have shown that knowledge intensive sectors have a wider and stronger multiplying effect, especially when provided to companies. Yet, Romania has a relatively well educated population and low labour cost. Some services could be key sectors for Romania from totally different reasons. The Project team will be required to make a multi-criteria motivated choice of “key service industries”. Each of these sectors will be analysed to identify the presence and the sources of comparative and competitive advantages or disadvantages for Romania. Such an analysis requires a specific methodology which will be developed by the project team and will include on field surveys, design of indicators, international cooperation. 

(4) Improving the understanding and developing the capacity to measure the economy wide impact of service sector development including the switching role of services in a knowledge economy:

It is considered that intangible assets as well as the large diversity of services that contribute to their creation will be given much more importance in the knowledge economy. This is a hypothesis that requires laborious assessment of the economy-wide impact of at least some of services. A methodology will be developed to address this requirement. Finally the achievement of this objective will be a “green paper” - an original study which will be published inviting to debate the stakeholders (researchers, the academic community, the business community, public policy makers and general public). It will be a contribution to raise awareness about changes to come and about how much services will influence people’s life (more than they already do). 

(5) Assessing the effects of the removal of barriers to trade in services, especially as a result of adopting the European Union proposed Directive on services in the Internal Market:

A recent proposal by the commission regarding removal of barriers to trade in services will be taken into debate during the next fall by the European Parliament and the European Council. This Directive proposal is seen as a sensitive topic. The project team will make an estimate of Romania advantage/disadvantage by kind of services and modes of service trading.

(6) Preparing a national strategy for getting full benefit of Romania’s competitive potential in the field of services

The various findings of the research activities comprised by the present project and the achievement of the indicated objectives will be synthesised in a set of public policy recommendations. An equilibrium model for testing policy assumptions based on scenario method will be elaborated. As a pilot exercise, two development scenarios will be elaborated in order to illustrate the consequences of adopting the recommended policy in parallel with consequences of not adopting it.

A Foresight exercise will support this objective by offering a prediction regarding long run realities and challenges.