An integrated industrial policy for the globalisation era

Industry is at the centre of the new growth model for the EU economy as outlined in the Europe 2020 Strategy. This communication therefore proposes a fresh approach to industrial policy that will strengthen EU competitiveness, provide growth and jobs, and enable the transition to a low-carbon and resource-efficient economy.

ACT

Communication of 28 November 2010 from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - An Integrated Industrial Policy for the Globalisation Era, Putting Competitiveness and Sustainability at Centre Stage [COM (2010) 614 final - not published in the Official Journal].

SUMMARY

This communication proposes a new approach to industrial policy, placing competitiveness and sustainability of European Union (EU) industry at the centre. For this purpose, it is essential to consider industrial policy in its wider sense, embracing those policies that have an impact on the cost, price and innovative competitiveness of industry and individual sectors, but also considering the competitiveness effects of all other policy initiatives which can have an important influence on the cost, price and innovative competitiveness. This not only includes the single-market and trade policies, but also the transport, energy, environmental or social and consumer-protection policies.

The Commission’s fresh approach to industrial policy is characterised by the following:

• continuing to apply a tailor made approach to all sectors and, at the same time, coordinating European policy responses as the concept of national sectors in the context of globalisation is fading away;
• considering the whole value and supply chain, from access to energy and raw materials to after-sale service and the recycling of materials. As some parts of this chain are outside the EU, all industries must have a globalisation reflex;
• regular reporting by the Commission on the EU’s and EU countries’ competitiveness and industrial policies and performance.

EU policies have to all work together in the same direction in order to provide best framework conditions for industry in Europe. Therefore, within the framework of the impact assessment process, the Commission has developed a competitiveness proofing, i.e. a special consideration of industrial competitiveness that should be applied to all policy areas. In parallel, specific fitness checks are proposed to ensure that the cumulative effect of existing legislation is not burdensome to industry.

Innovation is a key driver for productivity, increased energy and material efficiency, the improved performance of good and services and the generation of new markets. A new industrial innovation policy will encourage the faster development and commercialisation of goods and services, and ensure that EU firms are first onto the global market, thereby increasing their competitiveness. Key enabling technologies can provide the basis for a range of new processes and goods and services, including the development of new industries in the future. The Commission therefore proposes to further promote the deployment and commercialisation of competitive key enabling technologies.

The modernisation of Europe’s skills base will support Europe’s industrial base by improving the functioning of the EU’s labour markets and ensuring the EU’s workforce has the right skills. For this purpose, the Commission will encourage the networking of relevant players to share information and best practices among EU countries and propose guidance principles on framework conditions for job creation.

In order to capitalise on globalisation, the Commission will develop international regulatory co-operation initiatives with a view to develop globally compatible rules and standards and will seek closer economic integration with the EU’s neighbouring countries by extending the benefits of the European single market in selected areas through the European Neighbourhood Policy. This communication also recognises the challenges that SMEs face in going international; a strategy for the internationalisation of SMEs was launched at the end of 2011. Providing SMEs with the right information and supplementary support in markets outside the EU is among the key priorities.

This communication acknowledges that EU industry must speed up its transition to the low-carbon, resource- and energy-efficient economy, which can lead to cost reductions and a reduced impact on the environment. On 20 September 2011, the European Commission launched its Roadmap to a Resource Efficient Europe which provides a framework to deliver an ambitious decoupling of carbon and resource use from economic growth. In line with the EU roadmap for a low-carbon economy by 2050 the Commission will develop long-term sectoral industrial strategies and policies needed to assist the transition to a low-carbon, resource- and energy-efficient economy.

The communication called for a more effective governance of industrial policy with increased co-ordination and co-operation of EU countries. The 2011 Communication Industrial Policy: Reinforce Competitiveness of 14 October 2011 follows up this aspect of policy.

RELATED ACTS

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: A Stronger European Industry for Growth and Economic Recovery Industrial Policy Communication Update [ COM (2012) 582 final of 10.10.2012 - not published in the Official Journal].

This communication highlights the need to step up investment in new technologies to give Europe a competitive lead in the new industrial revolution. It sets a target of 20% as manufacturing's share of EU GDP by 2020. To achieve this, the Commission proposes to jointly focus, with EU member countries and industry, on investment and innovation on 6 priority action lines: advanced manufacturing technologies, key enabling technologies, bio-based products, sustainable industrial and construction policy and raw materials, clean vehicles, smart grids. Task forces will define roadmaps for each action line.

It also stresses the need for better market conditions: improved access to the internal market, as well as international markets will help the recovery of economic growth, Actions envisaged include fostering entrepreneurship, the wider use of standardisation, protecting and promoting intellectual property rights, improving access to raw materials, better access to finance and capital and greater investment in human capital.

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: For a European Industrial Renaissance [ COM(2014) 14 final of 22.1.2014 - not published in the Official Journal].

This communication stresses the importance of industry for ensuring economic resilience. Given that the contribution of manufacturing to EU GDP had fallen to 15.1% in summer 2013, it highlights the need to boost European industry's competitiveness.

This can be achieved in several ways including:

• developing the necessary infrastructures;
• offering a simplified regulatory framework to encourage entrepreneurship and innovation;
• better integration of capital markets;
• skills training;
• affordable energy and raw materials;
• the progressive integration of firms, especially SMEs, in global value chains, and
• more lending for innovative and industrial projects.

Last updated: 17.06.2014