In March 2020, we presented an industrial policy that would support the twin green and digital transitions, make EU industry more competitive globally, and enhance Europe’s open strategic autonomy. The next day, the World Health Organisation declared the COVID-19 outbreak a pandemic.
The updated industrial strategy reaffirms the priorities set out in March 2020, while responding to important lessons learned to ensure the recovery of Europe’s industry and economy.
Lessons learned from the COVID-19 crisis
The crisis has strongly affected the EU economy and exposed the interdependence of global value chains and demonstrated the critical role of a globally integrated and well-functioning single market. The impact of the crisis varies across different ecosystems and companies, but the key issues it highlighted are
- closed borders restricting the free movement of goods and services
- interrupted global supply chains affecting availability of essential products
- disruption of demand
To address these issues, the updated strategy proposes new measures that focus in particular on
- strengthening the resilience of the single market
- supporting Europe’s open strategic autonomy by addressing strategic dependencies
- accelerating the twin transitions to a green and digital economy
Strengthening the resilience of the single market
The single market is our most important asset, offering certainty, scale and a global springboard for our companies. However, the COVID-19 pandemic seriously affected the opportunities offered by the single market. Businesses and citizens suffered from border closures, supply disruptions and a lack of predictability.
To address this, we propose
- A Single Market Emergency Instrument - to ensure the availability and free movement of goods and services, and to guarantee transparency and coordination in the single market during times of crisis
- Deepening the single market - a number of areas deserve attention such as the service sector, business services, the posting of workers, as well as strengthening single market surveillance and other targeted measures for small and medium-sized enterprises
- Monitoring the single market - an annual analysis of the state of the single market, including analysis across 14 selected industrial ecosystems: construction, digital industries, health, agri-food, renewables, energy intensive industries, transport and automotive, electronics, textile, aerospace and defence, cultural and creative culture industries, tourism, proximity and social economy, and retail
Dealing with strategic dependencies: open strategic autonomy in practice
Openness to trade and investment is a strength and source of growth and resilience for the EU. But COVID-19 has shown that disruptions in global supply chains can lead to shortages of certain critical products in Europe. The crisis underlined the need for a better grasp of where Europe’s strategic dependencies lie, how they may develop in the future and the extent to which they could lead to vulnerabilities. This is why we need to further improve our open strategic autonomy in key areas, as already set out in the 2020 industrial strategy.
- Diversified international partnerships - to ensure that trade and investment continue to play a key role in building our economic resilience.
- The development of Europe’s strategic capacities in key areas by supporting new industrial alliances in strategic areas to develop activities that would not develop otherwise, and where they help to attract private investors to discuss new business partnerships and models in an open, transparent manner that is fully compliant with competition rules. The Commission is preparing the launch of the Alliance on processors and semiconductor technologies and the Alliance for Industrial Data, Edge and Cloud and considering the preparation of an Alliance on Space Launchers and an Alliance on Zero Emission Aviation.
- Monitoring of strategic dependencies - a first report based on a bottom-up analysis of the EU’s strategic dependencies. The report identifies 137 products in sensitive ecosystems for which the EU is highly dependent on foreign sources.The report also offers an in-depth analysis of six strategic areas where the EU has dependencies: raw materials, batteries, active pharmaceutical ingredients, hydrogen, semiconductors, cloud and edge technologies
Factpage on in-depth reviews of strategic areas for Europe’s interests
Accelerating the twin transitions
The 2020 industrial strategy included a list of actions to support the green and digital transition of EU industry, many of which have already been adopted or launched. But the pandemic has affected the speed and scale of this transformation. We will be supporting the business case for green and digital transitions through a combination of actions in the areas of regulatory framework, innovation support, access to raw materials and decarbonised energy, skills and data spaces.
To accelerate the twin transitions, we propose
- Transition pathways - to be developed jointly with EU countries, industry and stakeholders, these pathways will identify the actions needed to achieve the twin transitions, giving a better understanding of the scale, benefits and conditions required
- Recovery investments, especially from the Recovery and Resilience Facility, will provide opportunities to advance and build capacities as there are substantial investment gaps that public and private investment have to address
- Multicountry projects - to support recovery efforts and develop digital and green capacities, the Commission will support EU countries in joint projects to maximise investments under the Recovery and Resilience Facility
- Horizon Europe partnerships - bringing together private and public funding to finance research and innovation on low-carbon technology and processes
- Analysis of the steel sector - to ensure a clean and competitive steel industry, the Commission analyses and addresses challenges for this sector
- Abundant, accessible and affordable decarbonised energy - we will work with EU countries to accelerate investments into renewables and grids, and address barriers
A new industrial strategy for Europe
In March 2020 the Commission presented a new strategy to help Europe's industry lead the twin transitions towards climate neutrality and digital leadership. The strategy aims to drive Europe's competitiveness and its strategic autonomy at a time of moving geopolitical plates and increasing global competition.
The strategy includes an SME strategy that aims to reduce red tape and help Europe's SMEs to do business across the single market and beyond, access financing, and help lead the way on the digital and green transitions.
The strategy also includes concrete steps to address barriers to a well-functioning single market.