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What are the economic consequences of EU enlargement?

The aim of the ambitious MOVE (The Moving Frontier: the Changing Geography of Production in Labour Intensive Industries) project was to examine the impacts associated with the integration of economic activity in Europe. The consortium focused on specific research objectives, including assessments of delocalisation patterns, inter-organisational relationships, entrepreneurial strategies, successful adjustment cases, and policy initiatives and governance.

During 2004 and 2007, an impressive 755 questionnaires (field interviews) were completed by mainly small and medium-sized enterprises (SMEs) in 5 countries (covering various regions, but with a focus on the Balkan and new Member States) and across 4 sectors (software, electronics, clothing and footwear).

The findings show that enterprise strategies are multifaceted, without a prescribed formula for success. In fact, companies in the same segment of the market and the same country may even implement successful strategies that differ considerably from one another. Among the main factors of success, results indicate that the resources and competences of enterprises are among the most important.

When it comes to delocalisation (i.e. relocation and outsourcing), it is only one of several considerations taken into account when an enterprise wants to increase its competitiveness. Despite the negative connotations that delocalisation tends to generate, the MOVE findings show that there is no correlation between a region's financial growth and unemployment rates in those areas affected by job losses due to delocalisation.

In fact, the findings show that delocalising companies increase their competitiveness, while the receiving region may move up the value chain. Nevertheless, international experts have since pointed out that the process of delocalisation has both winners and losers, and the impacts on the latter should be noted. Also noteworthy is the finding that the enlargement process has helped retain a large number of jobs that may otherwise have been relocalised to countries such as India and China.

More information available here.