27.10.2005   

EN

Official Journal of the European Union

C 267/9

1.1

The European Commission is developing a ‘new style’ industrial policy. This policy is based on three pillars: better regulation, sector-specific approach and an integrated approach at EU-level. It is linked directly both to the Lisbon Strategy and to the current re-appraisal of the manufacturing industry's contribution to the European economy.

1.2

In a large number of sectors this revival of industrial policy at EU-level is warmly welcomed. The EESC supports fully the principles of the ‘new style’ industrial policy (1), the success of which will depend mainly upon an appropriate combination of actions both at horizontal and sectoral level, for the following reasons:

1.3

There is general political agreement about the need for Europe to meet the challenges of the future by becoming a strong leader in a globalised world. Making the Lisbon agenda a reality is, today more than ever, of major importance. Europe should therefore not only combat its own perceived weaknesses (as compared with its trade partners) but should also support and develop its strengths. The engineering goods industry provides substantial technological resources, as it owns the technology present not only in its products but also in the processes of its clients, which include the rest of manufacturing industry and essential utilities such as energy, water, transport and communications.

1.4

With the reactivation of the Lisbon agenda and today's focus on growth and jobs, the Commission rightly emphasises the core role of manufacturing industry, in particular of SMEs. Accordingly, any European industrial policy must consider mechanical engineering as a strategic sector, which, moreover, is flourishing at the present time. Indeed, attention should not only be focussed on sectors facing immediate challenges but equal attention must also be paid to successful sectors.

1.4.1

Mechanical engineering is not only a sector in its own right but, as a supplier of capital goods and common technologies used by different industries, it acts as a cross-fertiliser causing a knock-on effect to a much greater number of European sectors.

1.4.2

The mechanical engineering sector, as provider of enabling technology to all other sectors of the economy, provides the fundamental industrial infrastructure underpinning the European economy.

1.4.3

Moreover, mechanical engineering is one of the major exporting sectors accounting for about 15 % of exports of EU manufactured goods.

1.5

Mechanical engineering has benefited considerably from the internal market, which has provided European manufacturers with a substantial home base. However, while the sector needs a proportionate level of coherent international standards and European regulation, it is essential to maintain balance in order to avoid any over-regulation that might hinder competitiveness. At the same time, greater focus on the implementation and enforcement of regulation is required.

1.6

There is a need for both horizontal and sector-specific policies, as well as for an adequate mix of the two.

2.1

The mechanical engineering sector plays a crucial role in the European economy for a number of reasons:

2.1.1

Mechanical engineering is a strategic industry: it is a high added-value, knowledge-intensive sector which supplies all other sectors of the economy with the machines, production systems, components and associated services, as well as technology and knowledge they need. It is also considered an important contribution to sustainable development because it can result in more efficient production and, in this way, in the decoupling of resource use from economic growth. Mechanical engineering is not a homogeneous but a very diversified industry which covers a wide range of sub-sectors, including: lifting and handling equipment; machine tools; woodworking machinery; non-domestic cooling and ventilation equipment; pumps and compressors; machinery for mining, quarrying and construction; bearings, gears, gearing and driving elements; taps and valves, engines and turbines; agricultural and forestry machinery; machinery for textile, apparel and leather production; machinery for food, beverage and tobacco processing; agricultural equipment; machinery for paper and paperboard production; industrial furnaces and furnace burners; machinery for metallurgy, etc. In addition to all this, there are the common technologies, such as mechatronics, which combine mechanical and electronic elements.

2.1.2

Mechanical engineering provides not only the equipment, but also the skills and knowledge for improving existing processes and products and for developing new products in all subsectors. This is of particular importance when viewed in the context of the economic development of an enlarged Europe and beyond.

2.1.3

European mechanical engineering is a world leader with 41 % of global output, Europe is the world's largest producer and exporter of machinery (EU 261,707 million in 2002), including complete plant exports. It is vital to maintain such a leadership position, if Europe is to become the most competitive knowledge-driven economy in the world.

2.1.4

Mechanical engineering is a major industry: it is not only one of Europe's largest industrial sectors, accounting for 8 % of total manufacturing output, but also one of the largest employers with some 140 000 companies (of which, 21 600 have more than 20 employees) providing some 2.49 million people with, for the most part, highly qualified jobs. The strong domestic European market that mechanical engineering enjoys (2003: EU 15, EUR 285 bn; EU 25, EUR 305 bn) represents 70 % of production in the internal market and reinforces both the competitive edge of the industry and the stability of employment in the sector. This industry is therefore essential for attaining the Lisbon objectives.

2.1.5

Mechanical engineering is a key innovative industry: in Europe it is particularly strong in the area of customised machinery and niche markets, which is of great importance to the innovation capacity of all other sectors of the economy. It is also vital to the capacity of all sectors of industry to provide high added-value, thereby achieving a competitive advantage that offsets any handicaps Europe may face in areas such as labour costs. Mechanical engineering is a driver of innovation and a pioneer, applying and integrating innovations into its own products and processes. It should be borne in mind that mechanical engineering is a link — very often the first– in a value-creating chain: should one part of this chain fail, the whole would suffer.

2.1.6

Mechanical engineering is an industry of entrepreneurs, dominated by SMEs (2) — which are to a great extent family-owned — with all the attendant challenges faced by those companies, many of which are also global businesses. Mechanical engineering therefore epitomises the spirit of entrepreneurship fundamental to realising the Lisbon objectives.

2.1.7

Certain other characteristics of the mechanical engineering industry include the following:

2.2

Mechanical engineering companies enjoy particularly strong customer relationships as production of goods by machine is generally a complex process requiring advanced engineering skills and continuous technical assistance and servicing by the equipment manufacturer. It is an essential part of the industrial fabric and a base for successful clusters, where there is geographical proximity of manufacturing to end users such as in Baden-Württemberg, Rheinland-Pfalz, Piemonte, Lombardia, Rhone-Alp, the UK Midlands and Eindhoven-Aachen. These examples underline the often successful and indispensable contribution made by regional and local authorities.

2.3

Mechanical engineering plays a vital role in improving the environment by producing equipment for the treatment and processing of water, soil, air, waste and manure. It also contributes to facilitating the use of renewable energy sources.

2.4

The mechanical engineering sector is a world leader, underpinning European manufacturing and exports and, therefore, is one of Europe's strengths.

The introduction of measures to develop mechanical engineering should help the sector to excel not only Europe-wide but also worldwide.

2.5

A very good argument for enhanced support of the sector is that provided by the emphasis the US Administration has recently put on mechanical engineering. Countries such as the USA are increasingly aware of the importance of manufacturing in general and of the mechanical engineering sector in particular, to the economy and to national security (3).

3.1.1

Industrial change and innovation in production and processing is the order of the day. Less sophisticated production, requiring less highly qualified operating personnel, is being increasingly outsourced to other parts of the world. In order to maintain and reinforce its position in the home market as well as abroad, ongoing adaptation and innovation in the sector is required. This should be a matter of concern for all parties involved at regional, national and EU level.

3.1.2

The sector drew the attention of EU regulators as early as 1994 who responded in the form of a Communication (4), which was followed by a Council Resolution (5). Neither the European Commission nor the Member States have shown much inclination to implement the proposed follow-up to the Communication and the Council Resolution. Such reticence can hardly be viewed as a positive implementation of policy. This hesitant general attitude had changed under the last Commission because of the priority placed on manufacturing competitiveness in the framework of the Lisbon strategy. This might have led to a favourable climate for genuine partnerships at EU-level, which, hopefully, would have promoted positive interaction between players at national and local level, as appropriate. Unfortunately, the Commission seems to be focusing today on a limited number of so-called flagship-sectors, among which mechanical engineering is not included at present.

3.1.3

‘New style’ industrial policy aims at breaking through the barriers that have characterised for so long the relationship between public and private actors. The actors must be aware that each of them is serving the common objectives. Such an industrial policy aims at bringing together people and organisations to bridge gaps that, previously, have often prevented sufficient innovation.

3.1.4

The wide variety of specialised and often high-tech SMEs in the sector, places high demands on the organisation and management of production processes. Contrary to certain other sectors with a relatively small number of leading companies, specific instruments and approaches have to be foreseen. One such specific approach, for example, might be the creation of a Technology Platform for Manufacturing Enabling Industries or the establishment of a particular programme which could play an outstanding role in this regard (6). A substantial investment in R&D is required.

3.1.5

A technology platform or specific programme should draw on the reservoir of skills developed as a result of a longstanding European tradition in mechanical engineering and form an alliance of the support for European research programmes, industrial knowledge in the mechanical engineering clusters and the strengths of specialised European research institutes.

3.1.6

Such programmes for mechanical engineering must take into account the variety of subsectors and the interaction between them, such as common innovations, the combination of technologies and, consequently, the need to develop effective knowledge circulation in production and business services.

3.1.7

The gap between research centres and universities on the one hand, and the market sector on the other, needs to be bridged. European R&D-programmes should certainly not be exclusively science-driven operating on a long term perspective, but should also strive to achieve a balance by reserving funding for applied research, which leads to innovative products.

3.1.8

The technology platform should contribute greatly to a better understanding between research centres of all kinds and the mechanical goods industry, which would, in turn, produce beneficial effects for similar fora in the Member States.

3.1.9

The presence of so many SMEs and mid-size companies in this sector emphasises the need for fewer constraints and less administration and greater access to EU programmes.

3.1.10

Naturally, the realisation of large-scale industrial projects requires R&D programmes to be focused on breakthrough technologies. These have a knock-on effect on the whole value chain. However, it is important to achieve the right balance of funding between such major projects and SMEs.

3.1.11

All this will also have a positive impact on national programmes. In an environment dominated by interaction and benchmarking, best practice must be taken into account. Because of the overwhelming number of SMEs, national branch organisations have to play an active role in this field.

3.2.1

There is a close interconnection between ‘new style’ industrial policies, innovation, creativity productivity and skills.

3.2.2

Nowadays young people are less inclined to study and to work in the technical industries, a phenomenon that has partly to do with an outdated image of industry. This calls for action focusing on new technologies by industry itself, supported by a cultural drive on the part of national and Community media, with a view to altering public perception. Good communication between companies and the public, particularly with youngsters, is crucial. A change of mentality and approach is needed to reverse current trends. Increased awareness of the reality of mechanical engineering is needed. This concerns the overall process of technology, business services, the chains of inter-related technologies, processing, marketing, internationalisation, etc. The better these inter-relations and exciting processes are presented, the more it will foster interest amongst the general public and young people in particular.

3.2.3

All improvements begin with innovative and challenging educational systems. Up-to-date modules have to be devised, also in companies themselves. Industry must be encouraged to cooperate closely with educational institutes, higher education establishments, and vocational training centres. Direct participation of managers in relevant educational programmes must be encouraged and, in return, teachers must be offered the opportunity of interaction with industry. Schools should be encouraged to exhibit at (international) business fairs.

3.2.4

Business parks and technology parks around technical universities should be set up or developed more actively. Successful examples such as Cambridge University, Eindhoven, Aachen and others are to be highlighted.

3.2.5

Due to rapidly developing product and service cycles, life-long learning and, consequently, employee flexibility towards change, must become common practice in companies.

3.2.6

Effective coordination between industry (management, trade unions, staff) and educational establishments at all levels will reinforce regional specialties and, consequently, promote the formation and development of strong regional clusters. This coordination would be largely regional not only because of the enormous number of companies involved, but also because of the impact of regional specialities and differing cultures.

3.2.7

Dialogue between social partners on industrial implications at EU-level can lead to beneficial results. Illustrative examples, comparisons and benchmarks at EU-level may deliver a welcome framework and may set or reinforce the trend for national and regional programmes. A very nice illustration of a dialogue creating such a framework, is that conducted by the WEM-EMF ad-hoc Working Group in 2003 (7). It would be useful to measure the results of the wide variety of initiatives and to make an evaluation of best practices as this may foster dynamism in other regions.

3.2.8

This process can be deepened, notably with the participation of the new Member States, and may be extended to include the participation of educational establishments.

3.2.9

Although the mobility of engineers and engineering technicians within the EU still leaves much to be desired, the Bologna process and the growing convergence among the curricula of European engineering universities, vocational training centres and professional bodies of engineers is leading towards a European labour market in engineering skills.

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Better law-making is an essential prerequisite for all companies but particularly for SMEs.

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Legislation should be used only when it is really necessary, that is to say, on the basis of a detailed impact assessment, including a full consultation of stakeholders.

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Legislation should be kept simple, with as few administrative burdens as possible. This applies especially to SMEs, which comprise the overwhelming majority of European mechanical engineering companies (8). Unfortunately it is all too often the case that EU regulators, in spite of their good intentions, overlook the high level of unnecessary administrative burden arising from regulation.

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Regulatory impact assessment is essential: it should be used by all EU — and national institutions, not only in the initial proposal but throughout the legislative process and ex-post, for a certain period following application of the legislation. This would permit an evaluation of the degree of success in achieving policy objectives.

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Existing EU legislation should be implemented and enforced properly: the Commission should improve its follow-up and ensure harmonised implementation. All relevant parties should be encouraged to engage in and to monitor implementation and proper enforcement.

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All regulations issued by different directives must be harmonised and all manufacturing definitions referred to in directives must be uniform.

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Additional national requirements should be avoided. There is far too much product-requirement divergence between Member States and this is further reinforced by divergences in transpositions. Such ‘goldplating’, as it is commonly know, only leads to fragmentation of the internal market and therefore undermines the competitive edge.

4.1

The EESC is of the opinion that, when devising industrial policy, words must be followed by deeds. The so-called cost of ‘non-Europe’ could be especially high in mechanical engineering when one considers that this sector is, in spite of its leading role and its important core competences, facing a number of challenges that are not only cyclical, but also structural. These need to be addressed and consideration of the following points is vital in this respect:

4.2

This sector fits perfectly well into a concrete programme of fixing objectives at regional, national and EU level aimed at the implementation of the Lisbon agenda.

4.3

In the view of the EESC the significance of the EU commitment would be twofold:

4.3.1

Responsibility for this is shared by the Commission and the Competitiveness Council, in close cooperation with representatives of the sector. Regular meetings between the sector, including relevant social partners and the Commission, are desirable. To that end, the organisation of the EU's policy support infrastructures, in particular in the Enterprise and Industry Directorate General, should take due account of the requirements of the mechanical engineering sector.

4.3.2

The EESC also pleads in favour of ensuring the Commission has sufficient practical knowledge of and expertise in the mechanical engineering sector.

4.4

The EESC is of the opinion that special attention should be paid to this sector at EU level because of the overwhelming number of SMEs it contains. In this regard, the following aspects merit particular emphasis:

4.4.1

As regards research and innovation, the growing mismatch between European-funded R&D and the needs of the mechanical engineering industry should be addressed and company participation should be made easier in order to match the ambitious goal of increasing competitiveness with equally ambitious financial means in the corresponding items of the EU budget. Most of the companies are SMEs and mid-range companies and, at present, European industrial research projects address them inadequately and make company participation difficult.

4.4.2

The regulatory framework conditions in the EU need to be improved in consultation with the sector, as over-regulation and the growing weight of bureaucracy are jeopardising instead of stimulating dynamic entrepreneurship.

4.4.3

Market surveillance should be stepped up, with a view to ensuring a level playing field between European companies and also between European manufacturers and imports from third countries.

4.4.4

Access to financial markets for these companies has to be improved.

4.4.5

Trade relations with third countries must guarantee freedom of access to and investment in third country markets.

4.4.6

Competition policy should favour the development and innovation and technology in SMEs.

4.4.7

A discussion at EU level between social partners and the Commission on improving output, skills and educational training systems may create a helpful framework for concrete realisation of similar dialogues in the Member States, especially at regional level.

4.5

As an industry in transition, mechanical engineering is evolving rapidly from an industry focused on products to a ‘value/access provider’, integrating an ever-increasing service content and providing total solutions to its customers. This major challenge, which is key to maintaining sustainable growth and a strong position on world markets, has to be met by appropriate EU policies.

The EESC hopes that the Commission will take its recommendations into account as well as all the appropriate measures, leading Europe to what, according to its President Mr Barroso, is one of its Commission's main priorities, namely making the Lisbon Strategy a reality.