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Specialization Versus Diversification in EU Economies: A Challenge for Agro-Food?

  • Human Capital, Innovation, Knowledge
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Transition Studies Review

Abstract

Much attention has been paid to industrial differentiation versus specialization. In EU, the phenomenon of secondary production is important enough since it absorbs 6.3% of the total output at basic prices. Through the development of new symmetrical indicators, we point out the ability of economic branches to diversify, penetrate and invade others. This analysis is applied both to EU countries and to economic system branches, focusing the analysis on the challenges facing Agriculture and Food and beverage industry. We can assume that the most advanced countries belong to a post-modern or post-industrial stage of development. The only way to continue to stay on the market is to diversify production and to emphasize the search for a quality/price ratio attractive for the consumer. On the contrary, less advanced countries of Central and Eastern Europe are rather in the initial or intermediate stages of industrialization in which agriculture, crafts and traditional services still have a certain importance and, as we know, undertake more differentiated activities. What emerges is a watershed between continental and Mediterranean countries. Eastern Europe is still anchored to a traditional behavior. In synthesis we find three fundamental trends: (a) a long period continuity of those complementary activities that have always characterized agriculture; (b) the different structure of secondary production in the EU countries; (c) different barriers to entry, that explain asymmetries in the behavior of branches otherwise more or less related. Remark that these barriers may be not only physical or economical but also normative, thus introducing more differences in the behavior of different countries.

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Notes

  1. In a forthcoming work, the Authors examine the strategic perspective of the EU countries agro-food system comparing their methodology with that of Rumelt (1974), Teece et al. (1994), Lemelin (1982) and Fan and Lang (2000).

  2. The procedure for construction of SIOT is based on certain assumptions. In practice, the outputs and inputs of secondary production are reallocated on the base of two possible assumptions: (1) product technology: the structure of the input technology that produces a given product is the same wherever that product is made (each product is made with the same technology, no matter what branch manufactured it); (2) branch technology: it is assumed that the inputs are consumed in the same proportions in each production activity carried out by a branch, in practice the main and secondary products are all manufactured using the same technology, i.e. the same input structure (Mantegazza and Pascarella 2006; Eurostat 2006). Therefore from the same SUTs four different tables can be obtained.

  3. Unfortunately, Romania did not compile the tables of the secondary production.

  4. See Table 5 in Appendix for acronyms of the branches.

  5. We chose these couple of branches because of their strict connections in the EU agro-food system (Chang 1985; Chang and Piccinini 1997).

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Acknowledgments

The authors are deeply indebted to Prof. L.C. Piccinini for his methodological suggestions and valuable comments and to Dr. S. Clocchiatti for the collaboration in constructing the EU countries complex database. The responsibility of eventual mistakes and omissions remains to the authors.

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Authors and Affiliations

  1. Faculty of Agrarian Sciences, Section of Economics and Landscape, Department of Civil Engineering and Architecture, University of Udine, Udine, Italy

    Ting Fa Margherita Chang & Luca Iseppi

Authors
  1. Ting Fa Margherita Chang
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  2. Luca Iseppi
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Correspondence to Ting Fa Margherita Chang.

Additional information

Approach, “Introduction”, “Conclusions” and section “The results: diversification, penetration and invasion of the branches in EU countries” of this work are common to the authors. Sections “New indices of differentiation, penetration and invasion” and “Extent of secondary production phenomenon in the economies of EU countries” are due mostly to T. F. M. Chang, sections “The new database: the input–output supply and use tables” and “The challenge of diversification in the EU countries agro-food system” to L. Iseppi.

Appendix

Appendix

See Tables 4 and 5.

Table 4 Key to acronyms countries
Full size table
Table 5 Key to industries
Full size table

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Chang, T.F.M., Iseppi, L. Specialization Versus Diversification in EU Economies: A Challenge for Agro-Food?. Transit Stud Rev 18, 16–37 (2011). https://doi.org/10.1007/s11300-011-0196-0

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