Download pdf - "SECTORAL ANALISES AND SECTORAL POLICY" — INTERNATIONAL CONFERENCE

"SECTORAL ANALISES AND SECTORAL POLICY" —INTERNATIONAL CONFERENCEAuthor(s): В. VégsőSource: Acta Oeconomica, Vol. 12, No. 3/4 (1974), pp. 391-398Published by: Akadémiai KiadóStable URL: http://www.jstor.org/stable/40728303 .

Accessed: 10/06/2014 03:51

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .http://www.jstor.org/page/info/about/policies/terms.jsp

.JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range ofcontent in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new formsof scholarship. For more information about JSTOR, please contact [email protected].

.

Akadémiai Kiadó is collaborating with JSTOR to digitize, preserve and extend access to Acta Oeconomica.

http://www.jstor.org

This content downloaded from 185.44.78.13 on Tue, 10 Jun 2014 03:51:42 AMAll use subject to JSTOR Terms and Conditions

http://www.jstor.org/action/showPublisher?publisherCode=ak

http://www.jstor.org/stable/40728303?origin=JSTOR-pdf

http://www.jstor.org/page/info/about/policies/terms.jsp


Acta Oeconomica Vol. 12 (3-4), pp. 391-398 (1974)

REVIEWS

B. VÉGSÕ

"SECTORAL ANALISES AND SECTORAL POLICY" - INTERNATIONAL CONFERENCE*

The organizers of the conference had the following three aims: - to give a survey of the problems and actual knowledge of sectoral analyses, - to gather comprehensive information about actions taken on basis of sec-

toral analyses on both the micro- and the macro-levels, - to provide a forum for the representatives of different countries to exchange

their experience. The lively interest aroused is shown by the fact that about half of the partici-

pants (35 persons) came from foreign - 6 socialist and 12 non-socialist - countries. After the opening address of State Secretary /. Hetényi, First Vice Pres-

ident of the National Planning Office, 22 papers were discussed. Five further papers were distributed, but not discussed, since their authors were not present. Half of the

papers were submitted by representatives of socialist countries, with four Hungarian specialists among them. Beside plenary meetings discussing the papers also group discussions were included in the programme. Owing to their informal nature, they provided good opportunities for direct discussion of questions related to the subject. The findings of the conference were summarized at the closing session by Ζ

Roman, Director of the Research Institute for Industrial Economics of the Hun-

garian Academy of Sciences. In his opening address I. Hetényi spoke about the differences in the con-

ceptual interpretation of the "sector", as well as about the limitations of this term and the necessity of its use. He emphasized separately the requirements which demand to draw the limits of sectors as a practical task. In this context he briefly outlined the tasks and system of Hungarian economic control and planning, the direction and

perspectives of Hungarian economic development, and, in addition, how the central

development programmes and the support of the progressive sectors are connected to all that.

The papers and the relevant discussions gave account of the problems of the two far-reaching subjects mentioned in the title and of the related international ex-

perience.

* The conference was held in Budapest between 19th - 22nd April 1974, organized jointly by the European Association of National Productivity Centres, and the Research Institute for Industrial Economics of the Hungarian Academy of Sciences (the Hungarian member of the Association.)

Acta Oeconomica 12, 1974



392 REVIEWS

Sectoral analyses

In the course of the conference four main types of sectoral analyses were at the centre of interest: examination of the economic structure by sectors, comparison of the efficiency of sectors, analysis of the development and perspectives of sectors, and the examination of the inner structure of sectors.

All of the papers were reflective of the idea that sectoral analyses were needed not only for the foundation of the development of individual sectors. Namely, a sector shouldn't be analysed in itself separated from other spheres of the economy, not considering at least the sectors directly connected to it. At the same time, the demand was expressly formulated that the analyses must provide such information as will help decision-making in the given sector.

According to their conception the papers are to be divided into two different groups. The two differed in whether it was the potentials for increasing national-level productivity, or those for increasing enterprise profitability that must be explored for guaranteeing an adequate economic growth and for the formulation of a corre- sponding sectoral policy. The real problem out of which this difference of conceptions arises consists in that the growing profitability of an enterprise or of a group of enterprises does not necessarily guarantee the growth of productivity on the national level.

Everybody agreed, however, that the most important questions of sectoral analyses are the weak structural points of sectors and branches, the factors influenc- ing the structure of sectors and their effects, and the future development of the sectors (enterprises, group of enterprises).

Miklós Simárís (Economic Research Institute) paper, reporting on the analysis of relative sectoral efficiency illustrates clearly the differences between the two conceptions mentioned above. A method already tested in practice was presented. It is suitable, first of all, for analysing the sectors relative to each other. In this study economic efficiency is considered as a measure for ranking the sectors. The tool of measurement is a complex efficiency indicator, which evaluates each sector on the basis of net income relative to capital and wages-inputs.

Computations based on this indicator demonstrated remarkable differences between the competitive industrial branches covered by the analysis. The results have shown that the efficiency ranking of industrial branches is fundamentally determined by the net income produced. In the course of the research computations were made - beside home market prices - with prices received on markets of socialist and capitalist countries. These have shown that on the basis of domestic prices there is a smaller dispersion of sectoral efficiency between industrial branches.

Several papers were read about the applicability and problems of mathematical methods in sectoral examinations. D. M. Kazakevitch (Soviet Union) gave a summary survey of the mathematical and methodological experiences gained in his country in the theoretical and practical work connected with the simulation and Op-

tera Oeconomica 12, 1974



REVIEWS 393

timization of the development of productive sectors. D. van Vynsberghe (Belgium) gave account of the theoretical and methodological problems arising in the course of linking sectoral with regional points of view in input-output analyses. For illustration he used the results of actual investigations that had covered the Brabant province in Belgium.

A.S. Nekrasov (Soviet Union) summarized the problems of the optimal planning of the power economy by relying on the experience of such work in his country. He stressed especially that the extreme diversity of this branch and the high complexity of its internal and external relations necessitate a system approach and the application of a model system that makes use of the tools supplied by economic mathematics. Solving the problem answers had to be sought to two interrelated problems: how to find the optimum proportions in the development of the power economy branches, and how to provide for a fast raising of the level of fuel- and energy exploitation.

The model is built on a division of the general planning tasks of a given period into a hierarchic system of tasks, differentiated according to regions and sectoral characteristics. The model system consists of three subsystems: models of the national economy, of the sectors, and of the regions. The author pointed out that the system as a whole must be in harmony with the actual structure of the power economy, as well as with the total and partial power balances.

A similar view was expressed in the paper about the prognostic models of the long-range development of the machine building industry and about the experience of the application of these models, that may be generalized. This paper was submitted by a Czechoslovak group of authors: M. Mares, A. Hrbek, B. Valova and K. Stransky. An analysis in a similar field was the subject of l Harne9 s (Denmark) study, presenting the structural analysis of a trade association uniting machine building and metal-working enterprises and the rationalisation measures taken as a result.

Good examples for the analyses of the inner structure, development and perspective of sectors, as well as for the differences in the purposes of analyses are provided by the papers of B. Lindvig (Norway), D. Ibielski (GFR), and the joint authors E. Ilijev-A. V. Kuntchev (Bulgaria).

In his introduction, B. Lindvig summarized briefly the sectoral investigations carried out by the Norwegian Productivity Institute (NPI). Then he went on to report on the complex study of the baking industry, one of the most important works.

The examination, carried out with the cooperation of ministries, professional associations and the trade union, treats (in the form of partial studies) the marketing problems of the branch, the structure of production, the revision of bakeries' book-keeping, laws and agreements affecting the bakeries (the effects of their changes on the sectoral structure), the characteristic features of technological development and the question of distributing the products.

Acta O económica 12, 1974



394 REVIEWS

It appears from the results - as underlined by the author - that the next task is to elaborate such suggestions as will promote the formulation of a sectoral policy to serve the fulfilment of social, economic and consumers' demands.

D. Ibielskfs paper approached the interrelations of sectoral analysis and sectoral policy from the side of sectoral analyses, and summarized the results of so- called group-studies. The Productivity Centre of the German Federal Republic (RKW) has been working out such studies covering groups of enterprises since the early 1960s. These studies analyse in the first place the problems of small- and medium-sized enterprises belonging to the same sector, and seek for possibilities to increase the efficiency of such enterprises. Results of the analyses so far accom- plished show that in order to explore these possibilities it is expedient to concentrate attention on the following three spheres of problems: analysis of market potentials and of marketing functions; evaluation and forecasting of technological development, and exploration of the possibilities for employing the new techniques; elab- oration of measures aimed at raising the level of management.

As an example, the author presented in detail the examination covering the china- and pottery industry of the GFR carried out in 1971-72.

E. Ilijev and V. Kuntchev reported on the methods of sectoral analyses concerned with Bulgarian industry. Then they presented the examinations carried out in 1971-72 on the cotton and textile industry. The analysis covered the efficiency interrelations of concentration and specialization of the sector by relying on actual book-keeping and statistical indicators. The authors compared the indicators - grouped according to the size of enterprises - and analysed also the regional location of the industry. It was underlined that, in the present phase of economic development in Bulgaria, the purpose of sectoral analyses is to explore reserves that can help to increase the efficiency of social production, and to promote the utilization of such reserves. A similar account was given in the paper of R. Hesgör (Turkey) about sectoral studies carried out by the Turkish Productivity Centre. The authors' group: P. dos Santos, A. Pries and L. Paulo (Portugal) presented a paper treating productivity analyses in the Portuguese industry.

Sectoral policy

The majority of the papers treated the problems of sectoral policy. It must be remarked, however, that a sharp line cannot be drawn in this respect, since - as shown by the preceding - the analyses themselves are closely related to the policy in- fluencing sectors: they aid, exactly, the formulation of such a policy.

As regards the idea of sectoral policy, a common point of view has practically developed: sectoral policy is to be interpreted as the central (state) policy concerning sectors or the whole economy. The problem of interpreting structural changes and structural policy was closely related to this concept. The papers read and the discus-

Acta Oeconomica 12% 1974



REVIEWS 395

siofís allow to draw 'he conclusion that structural change means such movements within the economic structure as are the joint results of social and economic factors. On the other side, structural policy contains those central or government efforts that are directed toward achieving, i. e. carrying through, structural changes in certain industries, certain areas, and in certain enterprises.

The studies tried to present the questions of developing individual sectors and their inner structure, and the general and selective tools of sectoral policy not only in general terms but on basis of practical experience in different countries. The question of product pattern was given particular emphasis, as well as the idea that the intensive support of a sector will bring about the required result only in case each investment and development programme is implemented in time and on adequately up-to-date level. As regards the inner structure of sectors, the size and organization of enterprises, regional structure, competition, and the various means of increasing productivity were of primary interest.

The social aspects of sectoral policy were stressed in tiïe studies, among them first of all the importance of regional development and labour mobility. It follows that an integration of the sectoral policy with the whole of the economic policy is needed, in a way that sectoral policy be considered a part of the economic policy. Even if not with such emphasis, the necessity of such planning was also underlined by the representatives of the non-socialist countries.

For illustration of the questions mentioned, let us review in greater detail a few interesting studies that found a wide response.

Contribution to sectoral policy

Analysing of the tasks of sectoral policy Zoltán Roman started from the analysis of interrelations between economic growth and the changes in sectoral structure. In the field of industry the tasks of this policy are twofold: 1. to develop certain sectors, i. e. branches of industry, first of all their inner structure and efficiency; 2. to shape the structure of the industry as a whole, i.e. the production and other proportions of certain industrial branches and sectors. The author supported by a full range of evidences his opinion that the sectoral structure of the industry is to a considerable extent determined by exogenous factors and that industrial policy has a serious possibility to independently develop the sectoral structure of production where and to the extent that the products of the sectors may substitute each other. For this, possibilities are smaller in consumption and larger in productive utilization (technology) and the widest range for such possibilities is provided by foreign trade. The paper went on to examine the various criteria of substitution and of structural development. The author stressed that the development of sectors instead of enterprises may be justified if this allows a more efficient utilization of development inputs and results in economies of scale, and external savings. Sectoral development pro-




396 REVIEWS

grammes can be judges correctly on basis of examining alternatives, and in the context of the whole planning system.

György Darvas (Head of Department at the National Planning Office) reported on the relation between structural policy and planning, relying on experience of more general validity gained in the course of Hungarian economy- wide planning, mainly the 15- year long-term planning. He underlined that in the Hungarian economy the growing demand for labour of the service sector must be covered by labour to be released from agriculture, and this will result a growing proportion of skilled workers within the labour force structure. This will undoubtedly entail certain requirements to be raised toward the planning of re-grouping, training and retraining of the labour force. Changes are to be expected also in the development of the capital intensity of the economy: the increasing weight of the capital-intensive service sectors will increase the capital requirements of the economy. On the other side, in the sphere of material production it is the application of scientific results and the strengthening international economic cooperation that affect essentially the production structure. As a consequence, structural changes within national economic branches will gain in importance to an increasing degree. These can be considered in planning on the basis of available means and the evaluation of different development alternatives.

Problems relating to the control of sectoral development and relevant Hun- garian experience were presented by Ferenc Trethon (Deputy Minister of Finance) . He stated, first of all, that the interpretation of sectoral development must not be reduced to the satistically measured changed in sectoral proportions. Changes can be considered favourable only if the product pattern of the organisation involved is also adequate.

The author also pointed out that it is one of the principal tasks of ministries to build up an adequate organisational structure of enterprises, and to regulate the market and the system of interests. In ensuring the connections between sectoral control and the economy-wide plan an important role is played by the central development programmes embodying the general directives of economic policy, as well as by the instruments of financial control such as selective credit policy.

Finally, the author summarized the problems of competition within the sectors and pointed out that in the regulated market mechanism competition is such an in- direct means of control compelling enterprises to strenghten their market position, to implement technological development to adapt themselves quickly to changing conditions.

K.H. Oppenländer (GFR) reported on experience in his country. In his opinion, distinction must be made between structural policy for regions, enterprises and sectors. His paper was centred on the last aspect. He stressed that in the German Federal Republic the structural policy aimed at sectors and the promotion of ,, tural changes are considered as part of growth policy. Then he continued by giving comprehensive description of the form of influence exercised by the state. From the




REVIEWS 397

general tools promoting structural changes the author underlined the passing of information, advice, support of industrial research and development, promotion of the advantageous labour mobility and of competition, and the changing of tax laws. Talking about the special tools of structural policy the author used the examples of state credits, subsidies to cessation and switch-over, measures of commercial policy and the creation of rationalization associations to illustrate problems that structural policy must face in practice.

In a study not discussed at the conference M. Pick (Czechoslovakia) emphasized citing his own country as an example, that coordination must be continu- ously ensured among structural changes effected on different levels, since structural changes constituted a coherent process.

On examining the Czechoslovakian conditions, the author analysed the relations among specialization, labour productivity, the degree of technological equipment, the macro-structure and structural changes. He stressed that in the course of specialization in the so-called perspective industrial branches the changing market conditions and other factors, such as the world-wide trend of technological development, must be taken into consideration. The possibility for structural changes in Czechoslovakia is limited mainly by the available labour, the absorption of assets and labour by low-efficiency branches, the non-optimum capacity and its low utilization in industrial plants, investment constraints, natural conditions, and the social effects concomitant with the necessary regrouping of labour.

G. Kalek (GDR), who presented the first results of an analysis covering his country, started from the relations between the material consumption of the population, production, fixed assets, and the structure of investments. She, also, emphasized the importance of taking into consideration social conditions.

Within this sphere an interesting contribution was given by H. Aujac (France) about experience in his country on the interrelations between planning and the changing social, economic and political conditions, and on the preliminary conceptions for the years 1975 to 1980.

The survey of Norwegian industrial policy deserves particular attention, be- cause the level of economic development of the country, its specific geographical position, and the regional distribution of the population necessitate the solution of special regional and structural problems. H. Henriksen (Norway) underlined that the principal means of achieving a suitable distribution of the population over the country area is the decentralization of industry. In order to achieve this, industrial location and local development policies must be coordinated, and the desirable structural changes must be promoted by central incentive measures. Finally, for the outlining of a correct policy it is necessary to further develop sectoral analyses and planning, and to consider more seriously their results.

Experience gained in Holland was summarized by two authors. /. W. Hillige read a paper about the changes in Netherlands industrial policy, about advantages realizable by selective sectoral policy and the disadvantageous effects that may arise.

Acta Oeconomtca J2, 1974



398 REVIEWS

He considered useful as a criterion of such policy - the indicator of value added per employee. He also summarized the main questions of its practical application. CAM. Mul presented two interesting questions of structural policy: signalization and stimulation on the sectoral level, through the example of economic development in his country.

W. van den Panhuysen gave account of the tasks and problems of the Belgian industrial policy, and /. Bernolak about those of Canada.

Z. Nekola (representative of the CME A institute) treated a few structural and industrial policy questions concerned with the industrial development, cooperation and socialist economic integration of the CME A countries, relying on experiences of the past period and on an analysis of the expectable future trends of development.

Concluding remarks

In full accordance with the intentions of the organizers and the attendants the interrelations between structural policy and productivity were extensively treated at the conference. The effect of structural changes on productivity and efficiency, as well as the methods by which the productivity and efficiency of a sector may and must be increased, were clarified from a number of aspects. It was shown once more that also the non-socialist countries do not leave these entirely to the market mechanism. They want to help the small and medium-size enterprises in many ways and they feel increasingly the necessity for correcting the effects of the market in certain cases - by starting from the social, human and environmental interrelations.

The whole conference should be appreciated as having much contributed to the scientific research of this important field and given most certainly impulse to the further development of practical work in this field. It has served well international scientific communication. From the Hungarian point of view mostly those methods deserve interest through which the development of individual sectors is analysed and encouraged; in this respect the Hungarian sectoral ministries might obtain useful experience from the studies and the discussions.

Acta Otconemtca Í2, 1974

