Some time ago, Eurostat, the EU’s statistical agency, launched a research database with employment data called the ‘Full International and Global Accounts for Research in Input-Output analysis’ (Figaro; you have to wonder how drunk they were when they came up with the name).
Unlike traditional statistics, this detailed database collects employment not only by typical sector, but also by subsystem. Essentially, the entire production process from start to finish is recorded in this database, including all transfers between classic production activities (e.g. the production of electrical equipment) and production-related services such as transport and distribution, but also the knowledge-intensive services such as CAD of electrical equipment, patent and copyright services provided, IT services for the manufacturer, etc. This provides a more accurate estimate of the actual level of employment in the manufacturing sector in the EU Member States.
Claudio di Berardino, Stefano D’Angelo and Alessandro Sarra used this data to estimate the change in employment in the manufacturing sector of the core EU economies during the rise of China from 2010 to 2020. And they found that if you measure the manufacturing sector more comprehensively, there has been no decline in employment compared to other parts of the economy. The graph below shows that, measured at the crude oil sector level, the share of people employed in the industry decreased by 0.5 to 1.5 percentage points in the 2010s. But measured across the value chain, only Germany has seen a significant decline in employment.
Change in the employment share of the manufacturing sector from 2010 to 2020
Source: van Berardino et al. (2025)
The difference between the two metrics stems from the services provided as part of the manufacturing value chain. Knowledge-intensive business services (KIBS) specifically include IT services, market research, contracts and legal services, among others. In the past, such services would have been carried out by own employees and included as part of sector employment in the manufacturing sector. Today, these services are often outsourced to law firms and IT services companies, etc. That means that a sectoral accounting of employment would classify them as service sector jobs today, but as manufacturing jobs in the past.
Change in employment at KIBS from 2010 to 2020
Source: van Berardino et al. (2025)
Obviously this doesn’t help the factory worker who lost their job because production was outsourced to China or because business was lost to a Chinese competitor, but it shows that the decline in manufacturing may be exaggerated in traditional statistics and in the media. Today’s production is simply much more technology intensive and, as a result, much more of a mix of services and traditional production, than just ‘making things’.
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