After Liberalisation: A Vision of Europe in the Global Economy of the Twenty-First Century

151 Pages·1996·14.638 MB·English

by  Christopher J. S. Gentle (auth.)

AFfER LIBERALISATION
After Liberalisation
A Vision of Europe in the Global Economy
of the Twenty-First Century
Christopher 1. S. Gentle
First published in Great Britain 1996 by
MACMILLAN PRESS LTD
Houndmills, Basingstoke, Hampshire RG21 6XS
and London
Companies and representatives
throughout the world
A catalogue record for this book is available
from the British Library.
ISBN 978-1-349-24845-2 ISBN 978-1-349-24843-8 (eBook)
DOI10.1007/978-1-349-24843-8
First published in the United States of America 1996 by
ST. MARTIN'S PRESS, INC.,
Scholarly and Reference Division,
175 Fifth A venue,
New York, N.Y. 10010
ISBN 978-0-312-16195-8
Library of Congress Cataloging-in-Publication Data
Gentle, Christopher J. S. , 1966-
After liberalisation: a vision of Europe in the global economy of
the twenty-first century I Christopher J. S. Gentle.
p. em.
Includes index.
ISBN 978-0-312-16195-8
I. Europe-Economic integration. 2. Economic forecasting-Europe.
3. Deregulation-Europe. 4. Competition, International. I. Title.
HC241.G38 1996
337.4--dc20 96-19546
CIP
© Christopher J. S. Gentle 1996
Softcover reprint of the hardcover 1st edition 1996 978-0-333-60988-0
The views expressed in this book are those of the author. In no way
do they reflect those of the Henley Centre for Forecasting Ltd. London.
All rights reserved. No reproduction, copy or transmission of
this publication may be made without written permission.
No paragraph of this publication may be reproduced, copied or
transmitted save with written permission or in accordance with
the provisions of the Copyright, Designs and Patents Act 1988,
or under the terms of any licence permitting limited copying
issued by the Copyright Licensing Agency, 90 Tottenham Court
Road, London WI P 9HE.
Any person who does any unauthorised act in relation to this
publication may be liable to criminal prosecution and civil
claims for damages.
10 9 8 7 6 5 4 3 2 I
05 04 03 02 01 00 99 98 97 96
For Jackie
Contents
List of Tables and Figures ix
Preface xz
Acknowledgements xiii
1 Enter the Market, Exit Regulation 1
2 The Era of Great Liberalisation 19
3 European Financial Services 46
4 European Computer Services 60
5 European Telecommunications 80
6 Mter Liberalisation 108
7 Europe in 2010 121
Index 133
vii
List of Tables and Figures
TABLES
1.1 World Trade 1977-93 8
2.1 Gains from GATT. Annual gains from trade
liberalisation by 2002 22
2.2 How the 'techno-organisational revolution' is
changing business 29
2.3 Public sector in EU economies 39
2.4 Europe's top ten insurers 40
2.5 A divided Europe 43
3.1 A brief history of monetary convergence in Europe 50
3.2 Maastricht convergence criteria 51
3.3 The retail banking industry in the EU 54
3.4 Market concentration in the banking industry in
Europe 55
3.5 European privatisation banking candidates 58
4.1 Global IT revenues 1987-91 61
4.2 Global IT markets 62
4.3 Top ten computer service companies in Britain 68
4.4 Top 25 software/computing services companies in
Europe 69
4.5 Globalisation of computer services: examples of EDS
major customers across Europe 71
4.6 Global top 15 companies: services and software 76
5.1 Employment. in European telecommunications
1991-2 82
5.2 The European telecommunications market 83
5.3 Major landmarks in the liberalisation of EU
telecommunications 86
5.4 Biggest US takeover deals 97
5.5 Top ten international telecommunication carriers 103
5.6 Global Telecoms Competition: progress compared 103
5.7 Chronology of key liberalisation in Spanish
telecommunications 105
IX
x List of Tables and Figures
FIGURES
2.1 Shifting sands: flows of foreign direct investmen t in to
developing countries 31
4.1 Diversification strategies in the European computer
services industry 65
5.1 The wireless revolution 98
Preface
The inspiration for writing this book came from the dramatic
changes that I have seen taking place throughout European
business and society in the early 1990s. I have been fortunate
enough to work on projects both for the European Com
mission at CURDS - the academic consultancy at the University
of Newcastle upon Tyne - and for a number of Europe's
leading corporations, clients of The Henley Centre - Europe's
premier business consultancy - enabling me to experience
these dynamics of change at first hand. What I have seen over
the last five years, in contrast to the euphoria ofthe late 1980s,
has been a Europe characterised by a more sober and realistic
vision of the future. At the heart of this realism is how will
Europe compete in the global economy of the twenty-first
century.
The quest for improved industrial competitiveness has come
to dominate the agenda for change in Europe. The rise and
rise of an increasingly integrated global economy has inten
sified this debate. Simply, the core of the argument is: can
unfettered market forces alone bring Europe greater pros
perity?
Undoubtedly, the introduction of the single European
market was a necessary stimulus to modernise what was an
increasingly inefficient industrial structure. Throughout the
1970s and early 1980s, European industry moved lethargically
with little effort to rise to the challenge of growing inter
national competition. Business had grown fat on the cosy
national linkages and partnerships that were protected by
government regulatory and procurement policies.
Now is a key point in Europe's development to evaluate and
assess these factors. Economic fundamentals are shifting more
rapidly than ever before. Europe must now pit its labour force
against that of China - which has labour rates that are some 30
times cheaper. Political changes mean that Europe stands at an
important junction in its history. The accelerating process of
political integration, after the tragic worlds of this century,
mean that Europe is now on the brink of an unprecedented
unification. Momentum has been added to this unification by
xi
xii Preface
the collapse of the Communist bloc and the reunification of
Germany.
This book is an attempt to make a valid and significant
appraisal of the complex interactions of the factors that will
influence the development of Europe over the next gener
ation. The focus is on how these interactions will influence
Europe's economic competitiveness, after liberalisation, dereg
ulation and privatisation have taken their course.
The book draws on five years of research and consultancy
experience across a range of industries and in the majority of
member states of the European Union. Case studies of three
business sectors at the leading edge of the market liberalis
ation, state deregulation and internationalisation bring colour
to illustrate the fundamental changes sweeping through
Europe. At all times demonstrating the link between forces
driving through the global economy and Europe, the book
provides an analysis of the implication of liberalisation for
economic competitiveness in its widest sense. So it considers
not only the prospects for European corporations in their
battle against their Japanese and North American rivals, but
also the overall prosperity and quality of life for all of Europe's
citizens.
Christopher Gentle
London
September 1995.