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India and China Creating Jobs in Europe

Friday, December 21st, 2012
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While most European companies had to lay off their employees during the past three years, Indian and Chinese investors created plenty of jobs in the region in 2011. Ernst & Young’s 10th annual European Attractiveness Survey shows that India and China together accounted for 95 percent of job creation and 82 percent of projects in the European Union.

Indian companies created jobs in busi- ness services and the software segment, while China focused primarily on the clean technology sector including the solar power industry. Ernst & Young’s 2012 European Attrac- tiveness report analyses international in- vestment into Europe over the last year and is based on a survey of more than 800 global executives. These professionals have expressed their views about how and where global investment will take place in the next decade.

Findings from the survey show that US- based companies are creating about 26 per- cent of new jobs (providing a total of 1,028 projects) while India and China created much of the remaining opportunities. Overall Europe experienced a 2 percent increase in projects to 3,906 in 2011, com- pared to 3,757 in 2010. The majority of those surveyed (80 percent) expressed their confidence in Europe’s ability to overcome the ongoing economic crisis, and respon- dents are quite optimistic about investing in the region in the medium-term.

However, the Eurozone economy is still very fragile and one can’t blame the inves- tors for being reluctant about pouring more money in the region. Survey findings show that only 26 percent of the 840 global ex- ecutives surveyed intend to establish opera- tions in Europe through 2013. This repre- sents a decrease as 33 percent had planned to invest in the 2011 Ernst & Young’s Euro- pean Attractiveness Survey.

The infamous economic meltdown hit the world in 2008 and investment by BRIC (Brazil, Russia, India and China) economies fell sharply in 2010. However, this dip passed and the number of jobs created by BRIC in- vestors in Europe rose to 9,385 in 2011. The combined BRIC economies accounted for 6 percent of the total job creation in Europe, said the Ernst & Young’s report.

“Despite the current turmoil in Europe, its fundamental strengths continue to en- dure. While the spotlight has focused on the world’s rapid-growth economies, Eu- rope, too, remains a key destination for foreign investors,” according to Ernst & Young’s head International Location Advi- sory Services and author of the report, Marc Lhermitte.

“It remains the world’s largest single economy, and the attraction of its 500 mil- lion high-spending consumers, together with a stable and transparent legal and regulatory environment, remains a power- ful draw for investors.” Earlier this year, HCL Technologies an- nounced 10,000 jobs for locals in the US and Europe, indicating that Indian IT firms are creating jobs in western economies. The Times of India also reported a message from British Prime Minister David Cameron, who advised the European Union (EU) that it should not see emerging economies like In- dia as a threat but rather as a potential help to Europe in a significant manner.

“We need to have a check-list to tackle the euro crisis. There have to be FTAs, bilat- eral trade agreements and EU trade agree- ments with countries like India and Singa- pore, among others, by the end of the year,” he said.

China has also established an alliance of private-sector companies that will work to- wards setting up offices in Europe. This stra- tegic move will facilitate Chinese compa- nies to invest in the continent. The alliance is comprised of 100 members and many more are expected to join the organization that includes companies that have already set up an overseas presence.

 

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