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Industrial policy takes centre stage

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A competitive industry is key if Europe is to remain a global economic leader. In order to promote a successful industrial policy in our fast changing world, the European Commission has set out a wide-ranging strategy that aims to maintain and support a strong, diversified and competitive industrial base in Europe. This industrial base should play an important role in meeting crucial objectives for the European economy, such as creating new jobs and promoting sustainable growth.

The communication on an 'Integrated industrial policy for the globalisation era'pdf Choose translations of the previous link  [145 KB] Deutschfrançaisitaliano is one flagship initiative of the Europe 2020 strategy. "Industry is at the heart of Europe and indispensable for finding solutions to the challenges of our society, today and in the future," said European Commission Vice-President Antonio Tajani, who is responsible for entrepreneurship and industry. "Europe needs industry and industry needs Europe. We must tap into the full potential of the single market, its 500 million consumers and its 20 million entrepreneurs."

As ambitious targets require mutually reinforcing policies, the blueprint for this integrated industrial policy framework is closely linked to other flagship initiatives of Europe 2020, such as the strategy to promote an 'Innovation Union'.

The recent economic crisis has refocused attention on the importance of supporting a diverse and competitive manufacturing base, including capital intensive and cutting-edge sectors. This is hardly surprising when we consider that, in Europe, manufacturing employs a quarter of people in the private sector, while another 25% work in industry-related services. In addition, 80% of all research and development activity in the private sector takes place in manufacturing.

Fit for our era

However, in this era of intensifying globalisation, the concept of national sectors and industries is obsolete. Instead, what is needed, and what the new strategy promotes, are coordinated European policy responses and a comprehensive approach that looks at the whole value chain, from infrastructure and raw materials to after-sales service. "Europe is more than the sum of its parts. We must raise our joint ambitions in the area of industrial policy, step up our actions and strengthen European governance," noted Tajani. "This is not business as usual," he emphasised.

Moreover, the transition to a sustainable economy has to be seized as an opportunity to strengthen competitiveness. Only a European industrial policy targeting competitiveness and sustainability can ensure the critical mass of change needed for success. "There will be no sustainability without competitiveness, and there will be no long-lasting competitiveness without sustainability. And there will be none of them without a quantum leap in innovation," Tajani added.

Key areas for action

The coordinated policy response proposed by the European Commission identifies several key areas where action is needed to boost the competitiveness and sustainability of European manufacturing.

SMEs - the backbone of Europe's economy, representing some two-thirds of industrial jobs in the EU - feature prominently in the strategy, which outlines a number of measures for promoting their creation, growth and internationalisation.

To create a conducive environment for industry, other key actions include the 'competitiveness proofing' of new legislation, running 'fitness checks' on existing laws so as to reduce costs for European businesses, as well as strengthening efforts to promote European standards.

In addition, the new policy aims to upgrade Europe's communication, transport and energy infrastructure and services in order for them to serve industry more efficiently. In light of the growing scarcity of and increased global competition for primary raw materials, the document also announces a strategy for their sustainable supply and management.

Finally, the strategy addresses the challenges of space-related and energy-intensive industries, as well as tackling the insufficient sector-specific innovation performance. Actions in these areas should improve framework conditions, increase resource efficiency and support innovation.

Following discussion at the Council and the European Parliament, the first elements of the new strategy are expected to be implemented in 2011. To ensure follow-up, the European Commission will report on Europe's and Member States' competitiveness, industrial policies and performances on an annual basis (see box).

Monitoring progress

The 'Integrated industrial policy for the globalisation era' requires the European Commission to report annually not only on the EU's aggregate competitiveness, but also on each individual Member State.

The European Competitiveness Report focuses on recent changes in the EU's productivity growth, which is the key driver of competitiveness in the long run. Its 2010 edition examines how the economic crisis has affected EU competitiveness, the growing imbalances that led to crisis, possibilities for exiting it, and ways of enhancing European competitiveness.

As of 2010, detailed data on each Member State are also available thanks to the report on Member States' competitiveness performance and policiespdf Choose translations of the previous link  [2 MB] . It analyses industrial competitiveness across the Union and presents the policy measures individual Member States carry out to improve it. For each country, factual information is organised along main themes such as 'Towards an innovative industry', 'Towards a sustainable industry', 'The business environment' and 'Entrepreneurship and SME policy'.


'Industrial Competitiveness Policy' Unit,
Directorate-General for Enterprise and Industry

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