This article is part of our special report An industrial policy for Europe ?.
In order to move forward its plans for an ‘industrial renaissance’, the European Commission has to focus on creating a framework that will encourage the new industries of tomorrow, like photonics, writes Michael Mertin.
By Michael Mertin, President of Photonics21, a European technology platform.
Following the worst recession for over seventy years, Europe’s leaders have declared the ‘re-industrialisation’ of the European economy a major priority to bring it back to growth. Thus, the European Commission constantly unveils steps how to support a European ‘industrial renaissance’, including sweeping reforms in several sectors, such as energy, transport and digital communications networks, and the completion of the European single market.
The ultimate goal of these initiatives is to reach a level at which 20 percent of GPD will be derived from industrial output by 2020. That is why industrial value creation must be recognised as a cornerstone for Europe’s economy to take an active and prospering role within this globalised world.
This is a positive and highly ambitious task and we need to ensure that the EU strengthens innovation in industry sectors. In order to foster industrial innovation the European Commission has to focus on creating an appropriate framework. This will encourage the new industries of tomorrow, such as the photonics industry which plays a leading role in the transformation of our industrial base, to grow more sustainably.
Photonics encapsulates all technologies of emitting, detecting and processing light, ranging from sophisticated, ‘futuristic’ products such as lasers, to common everyday items such as domestic lighting. The photonics industry contributes as much as 3 trillion euros of EU trade, directly provides around 300,000 jobs, and indirectly affects another 30 million jobs – which is exactly why the European Commission designated photonics to be one of the key enabling technologies within the Horizon 2020 research programme.
Photonics as a key enabling technology has the potential to facilitate the transformation process in collaboration with other technological disciplines in order to create solutions for five megatrends: The trend of industrial automation is associated with a growing demand of customisation and is supposed to play an even more dominant role in the future market place. Growing connectivity describes a trend that is going to experience exponential growth of data transfer volumes in the years ahead. Intelligent infrastructures build the core of sustainable cities in order to provide clean water, green energy, and smart facility management. They are an essential element of the megatrend urbanisation. Demographic change and healthcare are the last two of the five megatrends to which photonics can contribute cutting-edge solutions to address both existing and future challenges, e.g. in the field of diagnostics or in the establishment of new products and markets that are demanded by an ageing society.
The question, however, is how we can make this happen? One approach would be for Europe to create an industrial-friendly environment and mindset that allows private investments to further accelerate the innovation and technology-driven global economy. This includes creating free global trade, pivoting toward a market economy, and reducing the amount of regulations. These three elements can currently be identified as the main roadblocks that force the industry to either hit the brakes or deviate from its original route instead of picking up speed and staying on course. It is therefore necessary to remove such roadblocks and to build bridges between academic innovation and industrial applications and investments. A greater uptake of Public Private Partnerships (PPP) does indeed have the means to overcome gaps between innovation and the market. With regards to the photonics industry, our recently established Photonics21 Public Private Partnership will play a strategic role in achieving our goals.
Right now, over-regulation in several areas seems to be the major element that needs to be addressed in this context. The industry requires smart regulations that streamline global supply chains in order to help European photonics companies to strengthen their competitive advantage. It is furthermore necessary to establish a secure and reliable regulatory environment that encourages investments for innovation and production in Europe later on.
The REACH framework is a good example of what can be done to create a predictable environment that does not deter investment. Labour market regulations in some European countries also do not support investments, especially not in production and new job creation. Public funding of research and development also plays a crucial role in Horizon 2020, specifically when it supports application-oriented, problem-solving research. Hence, stakeholders should engage in seeding investments that nurture and grow the industry in order for it to produce goods and services that can later be harvested; returning not only economic incentives but increasing trust in the industry as well.
Moving forward, we will encourage and work with the new European Parliament and Commission, as well as with the Member States, to drive forward and increase European industrial output by 2020. Resources need to be allocated in a smart way. Reforms must facilitate and not deter the industry from innovating. The photonics industry is ready to pick up speed and play its part in promoting Europe’s prosperity, growth, and industrial future!