1. International investment in logistics : Situation and trends in Europe
AFII 2005
International investment in logistics : Situation and trends in Europe
Fabrice Hatem, Invest in France Agency,
Normandy Business School
Le Havre, Sept 28th
28 september 2005

2. … with the result that countries are competing to host these functions
AFII 2005
The stakes are high
Businesses operate using different functions, not just production, but also logistics, R&D, etc.
Multinationals structure their international networks to capture the specific advantages of different host areas
This strategy extends to all functions, which have thus become internationally mobile…
… with the result that countries are competing to host these functions

3. The source data
FDI data have a limited usefulnessy : they mix up MA/greenfields, give no information on the function involved, etc.
Necessity to collect new types of data : informations on individual international projects by multinationals companies
Sources : international press, the web, promotion agencies, companies…
Ex : Ernst and Young (EIM), IBM/PLI (Gild), AFII
Each project is described by about 20 parameters
One possible use : analyse the trends for a specific corporate function (e.g : R&D, logistics, Call centres, Headquarters, etc.)

4. Services support functions : already a big market in Europe
AFII 2005
Services support functions : already a big market in Europe
58% of projects, 25% of jobs (2002 – 2004). Logistics : 6 %
Smaller average size in terms of jobs than plant-related projects. But projects in logistics are larger than the average service project.
Major structural impact on the host country
Per worker skills and wages higher than in production jobs
Do not confuse support or tertiary functions (such as R&D..) with tertiary sectors (such as banking..) – another area where international investment is growing

5. Functions, by number of projects 2002-2004
AFII 2005
Functions, by number of projects

6. Functions, by number of jobs created 2002-2004
AFII 2005
Functions, by number of jobs created

7. Projects, average number of jobs, 2002-2004
AFII 2005
Projects, average number of jobs,

8. Every sector of activity is affected
AFII 2005
Every sector of activity is affected
Large overall proportion of service sectors (because of outsourcing, nature of activities)
R&D: pharma and electronics
Logistics: manufacturers, distributors (retail, whosales), service providers
Call centres: importance of service sectors
SSCs, HQs: broad sectoral diversity

9. Reasons for the development of investments in logistics
Rising flows of products (growth in international trade, containeuraization)
Management of complex production networks by multinational companies
Supply the market quickiy and relayably
Global re-engineering of their logistical european networks by multinational companies
Extension of activities (production, sales) to new regions (Eastern Europe). Logistics follow
Trend to externalization incite external services providers to open new lines and/or services and/or sites
Rising content in added value and integration of services imply new needs in investment (automation of stock management, customers relation centres…)

10. Various types of projects
Upstream : production-support logistics. Ex : Forward suppliers warehouse close to the factory
Midstream : Optimize the collection and dispatching of products. Ex : logistic hub
Downstream : access to the customer. Ex : warehouse close to the retailing point

11. Organization of the supply chain: the example of the automotive sector

12. Proportion of jobs created in logistics by sector, 2002-2004
AFII 2005
Proportion of jobs created in logistics by sector,

13. Proportion of logistics in job creation by sector, 2002-2004

14. Main logistic services providers on the European market, 2003

15. European firms play a prominent role
AFII 2005
European firms play a prominent role
For services-support activities as a whole (Call centres, R&D, HQ, SSC…), UK and US firms are the first investors
But in logistics, European companies come first
1. German companies : large german logistic services providers ; Logistics follow the relocation of manufacturing activities in Eastern Europe
2. US : supply the west-european market, few relocations to EE
3. UK, France : large companies in distribution, logistic services providers

16. Jobs created in support functions by source region, 2002-2004
AFII 2005
Jobs created in support functions by source region,

17. Where do projects in logistics locate ?
Western Europ still capture 80 % of jobs creation in logistics (market access, production capabilities..)
Brittanic Island and to a minor extend, Benelux countries, are still a favorite location for extra-european (US) investments
France takes profit of its centrality in Western Europe (East-West and North- south flows), its good infrastructure, availability of land (vs congestion in Benelux)
Growing markets in southern Europe (Spain)
Relocation of manufacturing into Eastern Europe implies increased needs in logistics

18. Job creation, by host country and function 2002-2004