Internal Market, Industry, Entrepreneurship and SMEs

Study on the international market distortion in the area of KETs: A case analysis

Study on the international market distortion in the area of KETs: A case analysis
Published on: 26/11/2014
Author: ESCIP Consortium for DG Enterprise and Industry
The European Commission ordered a study on market distortion in Key Enabling Technologies (KETs) that examined the incentives given for KETs investment in the six most competitive countries for KETs (the USA, China, Singapore, Taiwan, South Korea, and Japan).

The study looked at the policy instruments used by these countries to provide incentives for EU companies to invest there and found. It found that EU countries are not always able to match these incentives.

The study also assessed existing legislation to counteract market distortions aimed at protecting targeted domestic enterprises/sectors or attracting foreign investors.

Many non-EU countries, particularly the United States and Asian nations, have adopted policies designed to attract foreign investment in KETs. These efforts may sometimes result in the distortion of the international market for KET-related industries by creating incentives that are difficult to match for EU countries. There have been cases in which EU-based KET companies have invested in non-EU countries  because the incentives were too attractive to turn down.