It’s time for Europe to deliver on an ambitious industrial strategy

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of PLC.

Critics said the EU's industrial strategy didn't go far enough. [European Commission]

As the EU’s annual industry day approaches, the time is ripe to deliver on an ambitious industrial strategy that builds on Europe’s unique strengths, unlocks the potential of digital technology and data, and helps innovative companies solve societal challenges, writes Malte Lohan.

Malte Lohan is Director General of Orgalime – the European Engineering Industries Association.

Set to take place on 22 and 23 February, the European Commission’s second annual EU Industry Day is sparking debate in Brussels on the future of manufacturing in Europe. What will this future hold?

And how can policymakers help industry make it a success? To answer the first question, you need only look at the innovations emerging from pioneering European technology companies – innovations that are boosting the EU’s global competitiveness while addressing societal challenges across sectors as diverse as energy, transport or healthcare. The future clearly has the potential to be very bright indeed.

But success will depend on getting the right answer to the second question: when it comes to policy, the EU urgently needs more ambition. We need a forward-looking industrial strategy, one that can connect the dots between policy areas to create an environment that will make Europe the number one destination for innovative manufacturing investment.

We are at a pivotal moment in EU industrial policy. In response to growing calls for more ambitious action, the Commission released a Communication last September on a “renewed EU industrial policy strategy”. While this was a welcome first step, many in industry and at Member-State level do not feel it went far enough.

On the positive side, it acknowledged that companies’ investment decisions are shaped by developments in many arenas. To enable industry to deliver on its potential for Europe’s economy and society, therefore, the goal must be to mainstream industrial competitiveness across all policy fields.

Where the Commission’s strategy has so far fallen short, however, is on a long-term vision for the way forward. The Communication reads more like a stock-taking exercise of measures already in place, when what is needed is a strategic plan for concrete, coordinated action towards 2030 and beyond.

It is time that policymakers recognise the central role that industry will play in shaping the future of the EU’s economy and society, and take action to ensure our technology leaders can continue to deliver benefits for Europe’s citizens.

Jean-Claude Juncker’s 2017 State of the European Union address demonstrated a clear understanding of industry’s role as an enabler of future change. He stated the Commission’s aim as to “help our industries stay or become the world leader in innovation, digitisation and decarbonisation” – all areas where EU firms are international path-breakers, and where a targeted industrial strategy could help them do even more.

The first step is to not just acknowledge but embrace the profound transformation unfolding in European manufacturing. Not for nothing has this era been dubbed the Fourth Industrial Revolution: connected digitised production lines and innovative data-driven business models are redefining any traditional notions of what ‘industry’ is. European firms are merging the power of digital and data with their long-standing manufacturing strengths. And this is already paying dividends, with growth and output rising across key sectors.

Digitisation policy must therefore be integral to a forward-looking industrial strategy. This means striving for a regulatory framework that does not stifle, but supports digital innovation. When approaching new technologies such as artificial intelligence, for example, policy decisions should be grounded in the reality of how these are already being used in a beneficial way.

But for an EU industrial strategy to make maximum impact, it must go beyond support for digitisation. After all, the digital transformation of industry will play a key role in shaping the future of Europe more broadly. Innovative systems being developed and manufactured here in the EU are driving change across sectors – and helping solve major societal challenges in the process.

From the smart grids that will modernise our energy system, to the e-mobility networks that will help decarbonise transportation, to the connected healthcare solutions that will improve quality of life in a time of demographic change: these technologies are being put to work for a greener, healthier and more sustainable future for the EU and its citizens. And while these are global challenges, it is European companies who are leading the way in pioneering solutions.

To boost the competitiveness of EU industry and help our companies maximise their contribution to Europe’s citizens, an industrial strategy must commit to greater ambition in every area that shapes investment. This means strengthening the Internal Market to ensure its success endures in the digital age.

It means pursuing an energy policy centred on the digitised, decarbonised and decentralised infrastructures where European companies can lead the way. And it means focusing R&I funding on collaborative industrial research that will bring innovation to the market, where it makes the biggest difference to citizens’ lives.

Most of all, it means moving from words to action and taking concrete steps to implement a progressive strategy that builds on Europe’s unique strengths in a highly competitive marketplace. The global race to digitise and decarbonise is on, and European industry is poised to take pole position in providing the technologies that will shape this future.

Put the right framework in place, and policymakers will not only secure the EU’s reputation as the home of leading-edge digital industrial innovation – they will help industry maximise its contribution to Europe’s economy and society, now and in the years to come.