1. Issues Paper on FGPs and Consideration for a Future Revision of ISIC
Report from the Technical Subgroup on ISIC – Austria, Canada, France, Ghana, Morocco, Switzerland, USA, Eurostat, ILO, UNSD
September

2. Background
Technical Subgroup on ISIC (TSG-ISIC) has met twice to discuss treatment of outsourcing of manufacturing production and “factoryless goods production” (May 2014 and May 2016)
Issue was discussed at the May 2015 EG meeting where the TSG-ISIC recommended no structural changes to ISIC for now, and to follow current guidelines to treatment of outsourcing in ISIC
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3. Background EG recommended (May 2015):
further research be undertaken to understand the nature and importance of this activity
develop of a typology
NSIs flag integrated manufacturers, contractors and FGPs in their survey programs and business registers
TSG-ISIC continue the work on outsourcing, and prepare a report
Final report of TSG-ISIC May 2016 meeting
discussed scope, analysis and possible indicators for identifying FGPs, and research/data collection to date
Main recommendation: prepare “issues paper” on FGPs and on considerations for future revisions of ISIC
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4. Status of Issues Paper
guidelines on identifying FGPs, manufacturing contractors and “traditional” manufacturers
implication on statistical units
only unaffiliated business units be considered
criteria: final output, material and IP inputs, primary activity and % of outsourcing – little support to use only economic ownership of inputs since arrangements change
question: do we need to broaden the definition of manufacturing from physical transformation of goods to “production of goods”?
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5. Status of Issues Paper
review of different indicators to identify FGPs (some based on Eurostat TF)
Outsourcing ratio – high purchase of manufacturing services
Tax data: status of employment – production v.s. other (France)
Turnover, type of investment, depreciation
Survey on Global Supply, Production and Distribution Chain Activities (Canada)
Flags on business register (Canada)
Results are indicating “pure” FGP activity is relatively small in developed economies
current version of typology is based on Eurostat TF
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6. Status of Issues Paper
draft version of paper is under review – to be completed early December 2017
submitted for review by the EG – January 2018
finalized – February 2018
TSG-ISIC still seeking input from NSIs on examples of indicators and data sources used to identify FGPs, contractors, etc.
issues paper will be an “evergreen” document
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