The report also looks at how industrial policy has been implemented at European level and in individual EU countries.
2014 Member States' Competitiveness Report: Reindustrialising Europe
European firms have fought hard to maintain their competitiveness during the crisis that began in 2008. However, the effects of the crisis are still being felt in the EU today.
The 2014 report provides an updated industrial performance scoreboard which assesses EU countries' industrial performance in four key areas: investment and access to finance; innovation and skills; energy, raw materials and sustainability; and access to markets, infrastructure and services. It also looks at how industrial policy has been implemented at European level and in EU countries.
In particular, this year's report focuses on improving the business environment through growth friendly public administration. The second part of the report is the public administration scoreboard. The quality of public administration is an important driver of EU countries' competitiveness. The scoreboard refines the monitoring of EU countries, through better analysis of their public administration's performance in areas that can boost business growth.
Overall, the report showed that while the EU has experienced a recovery of exports and an increase in productivity in most countries, many factors still hinder competitiveness. This includes a lack of investment, limited access to finance and access to markets (in particular for small and medium-sized enterprises), high energy prices, and the need for a more business-friendly environment and public administration.
The report classified EU countries into four groups:
- High and improving competitiveness – the Netherlands, Germany, Denmark, and Ireland.
- High but stagnating or declining competitiveness – Belgium, the United Kingdom, Austria, France, Italy, Luxembourg, Sweden, and Finland.
- Modest but improving competitiveness – Estonia, Lithuania, Spain, Latvia, Czech Republic, Hungary, Poland, Portugal, Romania, Slovakia, and Greece.
- Modest and stagnating or declining competitiveness – Slovenia, Bulgaria, Croatia, Malta, and Cyprus.
The report also suggested policy areas that require particular attention:
- Investment - additional investment is needed across all sectors to ensure that European industry can maintain its competitiveness
- Access to finance - small and new firms find it more difficult to obtain bank credit in comparison with other firms, even if their financial performance is the same
- Innovation - competitiveness is supported by more efficient innovation and commercialisation of research, and access to highly-skilled labour
- Public administration - Competitiveness requires reducing costs and uncertainties for businesses when dealing with public administration. Increased efficiency in public administration leads to more fast-growing firms, especially when financial turnover is increased. Time-consuming and costly tax rules, corruption, and ineffective justice systems are the most detrimental to firms' growth. Most EU countries also need to focus on the effects of rules and legislation.
- Access to foreign markets - Support is needed to help SMEs operate internationally. Small or new firms are less likely to enter foreign markets and reap associated benefits. Policies targeting the business environment with regards to access to capital, skills support for innovation, and actions to enhance productivity, are important to help small firms export.
- Innovation and energy prices - Electricity and gas prices are higher in the EU than elsewhere, which negatively affects competitiveness. Improvements in energy efficiency have not yet fully offset the negative impact of increasing prices. Efficient markets for electricity and diversified energy sources are needed to ensure that energy is available at competitive prices.
Country chapters for each Member State are available in English and the national language/s.