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Fostering structural change: an industrial policy for an enlarged Europe

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Fostering structural change: an industrial policy for an enlarged Europe

Industry plays a central role in the European Union's efforts to increase competitiveness and meet the Lisbon objectives. This communication provides an analysis of the competitiveness of European industry and the threat posed by deindustrialisation in this new global environment. The Commission aims to establish an industrial policy tailored to the demands of competitiveness, so as to foster the structural changes required by industry in a knowledge-based Europe.


Communication from the Commission of 20 April 2004 "Fostering structural change: an industrial policy for an enlarged Europe" [COM(2004) 274 final - not published in the Official Journal].


The Commission intends to set out an industrial policy for the European Union (EU) that matches up to the issues facing Europe, particularly the effects of enlargement and international competition. This policy aims to promote competitiveness and encourage more appropriate regulation, so that European industry remains innovative and continues to create jobs and growth.

The Member States and the European institutions must organise the structural changes in European industry around the factors of production of an enlarged Europe and the innovative capacity of a knowledge-based Europe.

No deindustrialisation but necessary structural change

Although the Commission does not see a general process of deindustrialisation at EU level, structural changes are profoundly affecting the industrial landscape. Jobs and resources in labour-intensive sectors or those facing intense competition are being shifted towards sectors where there are comparative advantages. The impact of these structural changes is positive for the EU as a whole, but may be damaging at local level for certain sectors or regions.

However, these shifts in jobs and resources must be backed by measures to promote research and innovation in order to maintain the EU's comparative advantage in sectors with high added value. The pressure of international competition has intensified in recent years, and is affecting more and more industrial sectors. The relocation of jobs to emerging economies no longer affects only traditional labour-intensive sectors; increasingly, its effects are being felt in hi-tech industries and the services sector. The only way Europe will be able to take full advantage of industrial globalisation is by adopting an industrial policy that focuses on competitiveness.

Opportunities afforded by enlargement

The enlargement of 2004 offers European industry significant opportunities, provided that the restructuring of the relevant sectors is not hampered by national protection measures. On the demand side, the internal market has been extended to include booming national consumer markets. On the supply side, companies can reorganise production to benefit from the competitive advantages of the new Member States.

The new Member States have an important role to play in the transition to a knowledge-based economy. Their inclusion can boost the EU's industrial performance and stimulate the internal market in the face of competition from non-member countries. The competitive advantages of the new Member States should make it possible for jobs that would otherwise have been transferred to Asia to be relocated within the EU. The sectors most affected by the arrival of new companies are food and beverages, transport equipment, base metals and metal products.

Tools to foster structural change

The Commission's objective, in line with the priorities set out in the 2002 communication on industrial policy in an enlarged Europe, is to rally public stakeholders around three areas of action for fostering change in European industry.

The first area of action concerns regulation and all the laws governing industrial activity in the EU. The aim is to bring legislation into line with the needs of businesses, both at national and European levels. Particular attention should be paid to competitiveness and to analysing the combined effects of different regulations on each sector of activity.

The second goal is to ensure that EU measures in different areas that have an impact on industry, particularly research, competition, employment and regional development, are better coordinated. The Commission intends to use these different policies to improve productivity gains and promote the use of knowledge. In more general terms, greater synergy between the EU's different policy areas will boost the competitiveness of European businesses.

The third target concerns the sectoral dimension of EU industrial policy. The Commission aims to make EU industrial activity more visible in key sectors by involving interested parties, thus highlighting the added value of industrial policy at European level.


This Communication forms part of the debate on how industrial policy can contribute to improving industrial competitiveness, launched by the Commission's communication of 11 December 2002. It should help European industry meet the objective the EU set itself at the 2000 European Council in Lisbon.


Communication from the Commission to the Council and the European Parliament of 21 November 2003, "Some Key Issues in Europe's Competitiveness" [COM(2003) 704 final - not published in the Official Journal].

Communication from the Commission of 11 December 2002 on industrial policy in an enlarged Europe [COM(2002) 714 final - not published in the Official Journal].

Last updated: 23.09.2005