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FP6

MOVE — Result In Brief

Project ID: 1695
Funded under: FP6-CITIZENS
Country: Greece

Business on the move

An EU-funded initiative studied the misconceptions and mechanisms behind the growth of business on a cross-border level in the EU. Efforts led to the creation of a model and new policies for firms to expand successfully in this respect.
Business on the move
The ever-changing borders of the EU have had many consequences for labour-intensive economies. Large industries employing sizeable numbers of employees from different countries have had varied effects on the socioeconomic landscape of many regions in the continent's eastern and southern frontiers.

the EU-funded project 'The moving frontier: the changing geography of production in labour intensive industries' (MOVE) investigated how and why labour-intensive firms moved or expanded into different areas (delocalisation). It looked at the resources and competitive advantages of firms, as well as different sectors' technologies and markets. Project partners also examined the local, regional, national and global environments in relation to their policies, institutions and relations.

analysing business strategies in labour-intensive sectors, MOVE found that enterprises employ different strategies not only in different countries and market segments but also in the same segments and countries. The project also identified misinterpretations concerning delocalisation and its consequences, i.e. regarding job losses and unemployment rates. It found that the key challenges lie in the weaknesses of specific regions, and that the overall effects of delocalisation within the EU on employment were positive.

particularly in new EU Member States, delocalisation lowered unemployment and benefitted underprivileged social groups in peripheral regions of Central and Eastern Europe. Strong governance on an EU level also promoted the advantages of delocalisation.

the project's studies on the clothing industry showed that international opportunities are best exploited initially by early engagement and low commitment, followed later by foreign investment and joint venture creation. In the European electronics industry, MOVE examined supply chains and geographical patterns, drawing important conclusions for the sector.

the project also identified industry-specific and country-specific factors as well as effects of delocalisation and integration of national production networks into European ones. Lastly, MOVE analysed the internationalisation and delocalisation of the European software industry within Europe and beyond it.

MOVE's results and findings will be of valuable use to policymaking with respect to expansion. They will help identify successful adjustment strategies or best practices that will allow firms to replicate positive results as they grow.

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