Europe needs its real economy now more than ever to underpin our ongoing economic recovery. As such, EU actions will be designed to reverse the current downward trend and to promote the reindustrialisation of Europe. Industry currently accounts for about 16% of EU GDP. Therefore, the European Commission has set its goal that industry's share of GDP should be around 20% by 2020.
The phrase ‘Industrial Revolution’ may be hundreds of years old, but it will be reborn in the 21st century. Europe is investing in – and relying on – reindustrialisation to foster economic recovery, ease environmental strain and solidify Europe’s standing as a global industrial leader.
And while the last Industrial Revolution gave birth to modern technology, the next Industrial Revolution will help create future technology.
Europe needs its real economy now more than ever to underpin our ongoing economic recovery. As such, actions should be designed to reverse the current downward trend and to promote the reindustrialisation of Europe. Industry currently accounts for about 16% of EU GDP. Therefore, the European Commission has set its goal that industry's share of GDP should be around 20% by 2020. This will be achieved through a series of measures designed to stimulate key markets, particularly clean, green sectors.
Europe's industry is well placed to assume this role: Europe is a world-leader in many strategic sectors such as automotive, aeronautics, engineering, space, chemicals and pharmaceuticals. Industry still accounts for 80 percent of Europe's exports, while 80 percent of private sector R&D investment comes from manufacturing. If confidence comes back, and with it new investments, Europe's industry can perform better and start growing again.
‘We cannot continue to let our industry leave Europe’ said European Commission Vice-President Antonio Tajani, Commissioner for Industry and Entrepreneurship underlined. ‘Our figures are crystal clear: European industry can deliver growth and can create employment. Therefore, we tabled the conditions for the sustainable reindustrialisation of Europe, to develop the investments needed in new technologies and to rebuild a climate of confidence and entrepreneurship. By working together and restoring confidence, we can bring back industry to Europe’.
By encouraging and enabling Member States to implement the changes required to improve sustainability and resource efficiency, Europe will be tapping into a booming sector. After all, the global market for clean production technologies, currently €380 billion, is expected to more than double, to €765 billion, by 2020. Certain markets, such as automatic waste separation, will grow at an even greater rate.
Of course, as important as international markets will be, the next Industrial Revolution requires a solid foundation here in Europe. And the Commission is ready to help European industries nurture this stability. Ideally, the Internal Market could account for as much as 25% of GDP, but right now it is only 21%, meaning there is ample room for growth.
The EC will improve the Internal Market by standardising regulations, which are currently dominated by national regulations – or no regulations at all. In addition, the Commission will address the need for improved access to finance, which has been lagging since the financial crisis struck in 2008. In 2007, gross fixed capital formation of GDP was 21.3% of GDP; in 2011, it was just 18.6%. The EC will help reach pre-crisis levels within the next three years and average more than 23% through 2020. And in an effort to improve productivity and introduce new technologies, policy actions should contribute to growing investment in equipment from its current level of 6 to 7% of GDP to 9% of GDP until 2020.
Recognising the need for technological evolution, the Commission has created a Digital Agenda designed to increase the number of small firms engaging in e-commerce. With the digital Single Market expected to grow by 10% each year through 2016, the EC plans to strengthen protection of intellectual property rights, including IPR helpdesks designed to support SMEs. These measures will ensure that intellectual and financial investments are duly rewarded, thus encouraging both investors and entrepreneurs to lead the reindustrialisation effort.
In addition, the Commission will help reshape EU industry with the formation of new goods, services and business models that would have seemed like science fiction during the first Industrial Revolution. 3D printing technologies, for example, are used to make plastic and metal production parts for the automotive industry, aerospace firms and consumer-product companies. The printers used to exploit this technology utilise ultra-thin layers of powdered materials that are then fused by lasers or electron beams. The process conserves raw materials, saves energy and creates products that are perfectly 21st century.
Key enabling technologies, or KETs, will be another cornerstone of the new Industrial Revolution. Used in a variety of applications – from corrosion-resistant nanomaterials for bridges to heat-resistant materials for aircrafts – KETs will once again make Europe a hotbed for production processes that have been outsourced to third-world countries.
Europe’s next Industrial Revolution is an enormous opportunity created by a pair of equally enormous challenges – the necessity of more environmentally friendly production, and reversing the ongoing slowdown caused by the global financial crisis.
The reindustrialisation of Europe will ease the strain caused by each of these burdens, enabling more efficient, less material-intensive manufacturing techniques. These same technologies will help drive drown productions costs, which will have a multitude of knock-on effects: making Europe a cheaper place to invest in industry; easing the burden on European consumers; bolstering European exports to countries outside the Single Market.
The new Industrial Revolution will no doubt be different from the first one. But one thing will be the same: Europe is leading the way.