Electrical and Electronic Engineering Industries (EEI)

Electrical and Electronic Engineering Industries (EEI)

Electrical and Electronic Engineering industries (EEI) are one of Europe’s largest and most competitive manufacturing sectors. They drive innovation and provide key-enabling technologies.

EEI also includes radio and telecommunications industries (R&TTE) as well as wireless communications industries, encompassing all products that use the radio frequency spectrum, e.g. mobile communications equipment, such as mobile phones and the mobile network infrastructure, citizens-band radio, broadcast transmitters, car door openers, wireless routers, maritime radars, sensors, etc.

Importance of Electrical and Electronic Engineering Industries

EEI produces a wide range of products, ranging from consumer products to turbines, trains, power grids and power stations. The industrialisation of emerging economies has been the most important driver of its expansion. Furthermore:

  • EEI’s gross output in 2012 was 703.3 billion, approximately 9.6% of all manufacturing gross output
  • the EU is the largest electrical engineering market, followed by the USA and Japan
  • the industry produced 212.4 billion in 2012
  • EEI grew at an average annual rate of 2.7% between 1998 and 2012, while other manufacturing industries declined
  • EEI is one of the most competitive manufacturing industries
  • mobile communications enrich the lives of citizens and are essential for the competitiveness of EU industry. The number of mobile devices and wireless applications has grown in recent years and continues to show significant potential for further growth and expansion
  • radio and terminal equipment are also a key aspect of the information society infrastructure, which enables development of the knowledge economy
  • the market for wireless equipment is mainly global with swift technological innovation leading to continuous renewal of products and changes in patterns of use.

Challenges faced by the sector

The economic crisis caused a fall in demand for EEI as manufacturing industries suffered a severe recession. Employment levels, labour productivity and costs were affected, although not as adversely as with other sectors.

The future of the European EEI supply chain and its role as a producer of technologies now depends on the high growth potential of key markets being exploited and challenges overcome:

  1. Loss of skilled labour is an issue, as companies cut production costs. In the long-term, the industry will need to re-employ this skilled labour. Additionally, the ever progressing relocation of production, product development and research to East Asia, and notably China, is problematic. In particular, the resulting shortage of engineers and high-skilled personnel in advanced technologies.
  2. Access to credit from financial institutions is an ongoing issue.
  3. Progress is required regarding the energy supply infrastructure, as well as the energy efficiency of buildings, transport networks and industrial production.
  4. Investments in research and development (R&D) are crucial if European EEI is to compete with international players like the USA, Japan and China. The development of smart technologies is also important.
  5. The unfair competition caused by non-compliant goods is affecting the sector’s competitiveness. Surveillance authorities have demonstrated that there is a cause for concern, requiring more effective enforcement of compliance regulations. This is especially the case in low-tech/low-cost areas of the market, where price pressure tends to lead to less attention being paid to compliance.

The R&TTE and wireless communications sector faces additional challenges.

In 2000, Europe was the world leader in mobile communications infrastructure, terminals and related high growth areas. However, in recent years, a progressive relocation to Asia (mainly China) for production, product development and research has taken place. The majority of products on the EU market, in particular consumer products are now manufactured by non-EU companies (China, South Korea, Japan or USA).

Strategic management of this sector is essential to improve levels of connectivity between EU citizens, business, and the public sector.

What the Commission is doing to address these challenges

The Commission’s priority is to ensure a well-functioning internal market for this sector. Central to free circulation of products within the internal market is the harmonisation at EU level of requirements addressing objectives of public interest. These include the safety of users, the co-existence of electromagnetic emissions, and the efficient use of radio spectrum.

In particular, the Commission implements and revises, as appropriate, three key pieces of legislation:

More on what the Commission is doing.