Analytics, EU – Baltic States, Industry, Modern EU

There is growing momentum for a revived EU industrial strategy: hence the EU states’ leaders have called on the European Commission to present a “long-term vision” for the Union’s industrial future. In answer to that, the Commission President-elect Ursula von der Leyen has pledged to put forward a new industrial strategy as part of a European Green Deal. 

Background

Industry is the backbone of the European states’ economy: it accounts for 80% of the EU’s exports and provides basic and high-skilled employment. EU states have certain global competitive advantages on high value-added products and services; therefore, innovation and competitiveness are among main Commission’s priorities. Besides, the EU institutions are taking necessary steps towards digital agenda and other “sectors” of the new industrial revolution, which are going to transform the existing member states’ industrial and manufacturing profiles.

The current momentum should lead to a new approach to industrial policy in the member states; hence the Industry Action Plan calls for a strong and comprehensive EU industrial strategy and is the culmination of a two-year EPC Task Force assessing how European industry can transform itself to become future-proof and competitive in the global economy.

Given the unprecedented and multidimensional challenges faced by industry – from climate change and digitalisation to protectionism and a slowdown in global trade – the paper argues in favour of a more holistic approach, including concrete policy recommendations in areas such as the Single Market, trade, climate, research, innovation competition and digital.

Note: some key EU persons in industrial development: Timo Pesonen, Director-General for Internal Market, Industry, Entrepreneurship and SMEs in the European Commission; Adina-Ioana Vălean MEP, Chair of the Committee on Industry, Research and Energy in the European Parliament.  

On the Commission’s website “Business and Industry”*) there are some general directions in the EU policy, such as “making businesses and industry more competitive” and “promoting jobs and growth through a business-friendly environment”. Besides, there are six main policy guidelines reflecting various facets of business-industry relationships: 

1. Industry competitiveness and innovation; 

2. Entrepreneurship and small business; 

3. Space technology; 

4. Sustainable and circular economy; 

5. Security industry; and 6. European market for space data.

*) See the Commission’s Communication “An Industry Action Plan for a more competitive, sustainable and strategic European Union” and general reference in: https://ec.europa.eu/info/policies/business-and-industry_en#related  

Industrial policy: facing new challenges

The European Commission is investing in the development of the member states’ modern, clean and sustainable economy as the EU’s approach is to promote industrial competitiveness through the Union’s main priorities and initiatives.

For example, the following directions in the member states’ industrial policies are having a priority:  to empower citizens by providing skills for industry, revitalizing regions through the development of clusters and so-called 3S-smart specialization strategies, activating the best technologies by supporting the digital transformation of industry, KETs (so-called Key Enabling Technologies) and promoting ICT standards (to achieve interoperability of new technologies).  

References to industrial policy’s guidelines in: https://ec.europa.eu/growth/industry/policy_en; on skills in: https://ec.europa.eu/growth/industry/policy/skills_en; on 3S in: https://ec.europa.eu/growth/industry/policy/smart-specialisation_en; more on KETs in:  https://ec.europa.eu/growth/industry/policy/key-enabling-technologies_en; and on ICT standards in: https://ec.europa.eu/growth/industry/policy/ict-standardisation_en.   

As to innovation, which is a key factor in the competitiveness of European industry, the EU implements policies and programmes that support the development of innovation to increase investment in research and development, and to better convert research into improved goods, services, or processes for the market.

More on innovation in: https://ec.europa.eu/growth/industry/innovation_en

The following new perspectives in six strategic and future-oriented industrial sectors have been suggested at the beginning of November at the Strategic Forum on Important Projects of Common European Interest (5.xi.2019) in order to boost European and member states’ competitiveness and acquiring a global leadership:

-        Connected, clean and autonomous vehicles;

-        Hydrogen technologies and systems;

-        Smart health;

-        Industrial Internet of Things (IIoT);

-        Low-carbon industry; and

-        Cybersecurity

Towards sustainability

Probably, the “sustainability and circular economy” policy sector is gaining momentum during last 3-4 years. The European Commission aims to ensure coherence between industrial, environmental, climate and energy policy to create an optimal business environment for sustainable growth, job creation and innovation. To support this, the Commission has established an ambitious agenda to transform EU economy into a circular one, where the value of products and materials is maintained for as long as possible, bringing major economic benefits. The Commission also supports European industry in the move to a climate-neutral economy and improves the energy efficiency of products through Ecodesign legislation.

The Commission’s actions in supporting the states industry’s transformation to a more circular economy cover all processes: e.g. from production and consumption to waste management and the market for secondary raw materials. In a circular economy the value of products and materials is maintained for as long as possible, waste and resource’s use is minimized; it all can contribute to innovation, growth and job creation.

More in: https://ec.europa.eu/growth/industry/sustainability/circular-economy_en

The member states’ industries are transforming to a climate-neutral economy, marking a change for the energy, manufacturing, transport and construction sectors. 

On climate-neutral economy in:

https://ec.europa.eu/growth/industry/sustainability/climate-neutral-economy_en

The Commission aims to ensure coherence between industrial, environmental, climate and energy policy to create an optimal business environment for sustainable growth, job creation and innovation. For this in mind, the Commission adopted an ambitious agenda to transform member states’ economies on “circular lines”, where the value of products and materials is maintained for as long as possible, bringing major economic benefits. The Commission also supports the states’ industries in their move to a low-carbon economy and improving the energy efficiency of products through ecodesign legislation as an effective tool for improving the products’ energy efficiency.

On sustainable growth and circular economy see: https://ec.europa.eu/growth/industry/sustainability_en; on ecodesign in:

https://ec.europa.eu/growth/industry/sustainability/ecodesign_en 

Legislation on ecodesign and energy labeling is an effective tool for improving the energy efficiency of products. It helps eliminate the least performing products from the market, significantly contributing to the EU’s 2020 energy efficiency objective. Energy savings related to Eco-design and Energy Labeling Regulations are estimated to be at the level of 800 Terra-watt hour (TWh) per year by 2020. Ecodesign also supports industrial competitiveness and innovation by promoting the better environmental performance of products throughout the Internal Market.

General reference at: https://ec.europa.eu/growth/industry/sustainability_en

CSR and competitiveness

Specific attention is devoted to CSR (corporate social responsibility) and responsible business attitude; the CSR, generally, refers to companies taking responsibility for their impact on society. The Commission believes that CSR is an important factor in sustainability, competitiveness, and innovation of EU enterprises and the member states’ economy.

More on CSR in: https://ec.europa.eu/growth/industry/corporate-social-responsibility_en

Besides, the EU institutions help the internationalisation of EU businesses by ensuring a level playing field for them through bilateral, regional and international dialogues, as well as contributing the EU perspective enlargement process.

To support policy development and encourage EU countries to increase their competitiveness, the Commission monitors the competitiveness performance of EU countries and EU industries through several reports: e.g. on Single Market integration and competitiveness in the EU, on the EU’s industrial structure, on the European states’ competitiveness and the short-term industrial outlook. It also shares best practices through the exchange of good practices.

References from: https://ec.europa.eu/growth/industry_en

The Commission also works to harmonise laws relating to intellectual property rights (IPR) in EU countries to avoid barriers to trade and create efficient EU-wide systems for the protection of such rights. To reach the goal, the Commission cooperated with the states’ authorities at all levels to strengthen the enforcement of IPR, to help SMEs in a proper use of IPR resources.  

On IPR in: https://ec.europa.eu/growth/industry/intellectual-property_en