This article is part of our special report Europe’s Industry : Halting the Decline.
In a policy paper published on Wednesday (10 October), the European Commission attempts to re-launch manufacturing activity and bring back industries to Europe.
The communication, titled Mission Growth: Europe at the Lead of the New Industrial Revolution, urges immediate action to revert the current downward trend and promote the re-industrialisation of Europe.
It sets out a new aspirational goal to increase the industry's share of EU GDP to around 20% by 2020, up from 16% currently.
As EurActiv reported last month, the pillars of the reinforced industrial policy are investment in innovation, better market conditions, access to finance and building human capital and skills.
"We cannot continue to let our industry leave Europe. Our figures are crystal clear: European industry can deliver growth and can create employment," said European Commission Vice President Antonio Tajani, responsible for Industry and Entrepreneurship.
"Today we tabled the conditions for the sustainable industry of the future in 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," he said in a statement.
Europe is a world-leader in many strategic sectors such as engineering, automobiles, aeronautics, space, chemicals and pharmaceuticals, argues the Commission, saying it must build on those strengths to re-launch manufacturing.
Industry still accounts for both 80% of Europe's exports, and 80% of private-sector R&D investment also comes from manufacturing.
BusinessEurope, the EU employer's association, hailed the initiative. “The business community is pleased to see efforts by Commission Vice President Tajani to keep industrial policy at the heart of European policymaking. Today’s report is an important step to improve framework conditions for industrial investment and innovation in Europe," Philippe de Buck, director general of BusinessEurope, said in a statement.
New pillars for industrial policy
The communication is calling for short-term, focused investment in key industrial sectors with high growth prospects.
The investments in innovation should focus on six priority areas with bigger potential for growth and jobs creation: Advanced manufacturing technologies for clean production, sustainable industrial and construction policy and raw materials, clean vehicles, bio-based products, key enabling technologies, and smart energy grids.
"Member states as well should play their part and should prioritise investments in these six areas," the Commission states.
>> Read EurActiv coverage: Commission to push for industrial champions
The single market should also be improved with the aim at fostering entrepreneurship with regards to, for example, the the digital single market which is expected to grow by 10% a year up to 2016.
The Commission also wants to improve lending to the real economy by better mobilising and targeting public resources, including those of the EIB. This should allocate between 10-15 billion in additional lending for smaller businesses.
Finally, in the area of human capital and skills, the Commission will further promote cooperation of employers, workers and relevant authorities through the creation of European Sector Skills Councils and of Knowledge and Sectors Skills Alliances.
Adrian Harris, director general of Orgalime, the European Engineering Industries Association, commented: “It is good to see that at last the European Commission has reacted to the real needs of the economy by re-establishing a clear focus on manufacturing, growth and job creation. Moreover the setting of a new 20% target for industry in relation to GDP should serve to focus the minds of policymakers on what is a core truth: that manufacturing is vital to Europe’s economic recovery and future. It is time that the EU worked on getting the right framework conditions in Europe to attract industrial investment."
Teresa Presas, director general of CEPI, the Confederation of European Paper Industries, was less enthusiastic. "We, the paper industries, believe that one size does not fit all. We are starting our own work on breakthrough technologies that will allow our factories to release resources that can be invested in new added value products. The communication on EU Industrial Policy must be more than an update. It has to set the grounds for sector specific policies,” Presas said in a statement.
Hubert Mandery, the director general of the European Chemical Industry Council (CEFIC), applauded the Commission's efforts. “The communication acknowledges the need for a strong manufacturing sector in Europe, which we applaud,” Manderey said in a statement.
“The goal to increase manufacturing’s share to 20% of EU gross domestic product is ambitious and achievable. All in all, the communication addresses the right elements of a 21st century industrial policy for Europe, but only if related policy such as energy, climate change or environment policies are aligned with this goal.”
The European Aluminium Association (EAA) welcomed the announcement by the Commission of a fitness check for the aluminium sector and calls for concrete actions to preserve Europe’s manufacturing base.
“We, at the European Aluminium Association, in particular welcome the European Commission’s announced fitness check for the aluminium industry, as it will make EU authorities fully aware of the impact of EU legislations on its activity”, said Patrick de Schrynmakers, EAA Secretary General.
Europia, the European oil refining trade association, welcomed the Commission paper, saying it "gives a positive signal to EU industry by policy makers of the general concerns about the competitive pressures facing EU manufacturing industry."
Europia said welcomed in particular the decision to undertake a fitness check for the oil refining sector. Chris Beddoes, Acting Secretary General of Europia commented: “A strong EU economy needs a wide range of industries, from the 'traditional' energy intensive manufacturers to those developing new technological solutions. EU refining is not only important for secure and competitive fuels supplies, but is also a vital and increasingly threatened part of the industrial infrastructure."
The communication builds on, and updates, the "Integrated Industrial Policy for the Globalisation Era" adopted by the Commission in 2010 as part of the Europe 2020 Strategy.
It focused on strengthening industrial competitiveness to support economic recovery and to enable the transition to a low-carbon and resource-efficient economy.
The strategic approach proposed in 2010 remains fully valid for achieving our longer term objectives and very good progress has been made in its implementation.
However, a harsh impact of the economic crisis on many member states, the subsequent economic stagnation in the EU and the deteriorating outlook for the global economy have given a new urgency to a mid-term review of the Industrial Policy.
A series of European Councils in 2011 and 2012 called for action in areas addressed by this Communication, as announced in President Barroso's State of the Union speech on 12 September 2012.
The renewed industrial strategy is part of the response to these calls, in particular following the "Compact and Growth and Jobs" at the European Council of June 2012.
- Communication: Mission Growth: Europe at the Lead of the New Industrial Revolution
- Press release: Industrial revolution brings industry back to Europe
- Press release: Although EU leads in energy efficiency and foreign investment, Industrial performance across Member States is not balanced
- Press release: Leading in energy efficiency and foreign investment EU industry needs to seize opportunities in globalization