Elżbieta Bieńkowska: EU industry must adapt to remain competitive

Written by The Parliament Magazine on 24 October 2017 in Interviews
Interviews

European internal market, industry, entrepreneurship and SMEs Commissioner Elżbieta Bieńkowska shares her plans for boosting the EU’s industrial competitiveness, avoiding another dieselgate scandal and keeping up with disruptive technology.

Elżbieta Bieńkowska | Photo credit: European Commission


The new industrial policy strategy mentions tightened CO2 emissions standards for cars and vans. can these prevent another dieselgate scandal, given that manufactures are still allowed to keep pollution control systems secret?
The best way to prevent cheating is firstly to make sure cheats get caught and secondly to make sure the penalties are severe and enforceable.

We saw in the dieselgate scandal how rigidly defined test cycles gave manufacturers the possibility to defeat the tests. And we also discovered that many national authorities have either not set penalties or had set them at such a level that they did not seriously discourage misconduct.


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We’re entering a new era of real driving conditions testing that will make it much harder to manipulate results.

As well as more stringent tests, manufacturers do have to declare their emission control strategies to the type approval testers. This is an important reinforcement of the EU rules, in particular of the prohibition of defeat devices.

It allows type-approval authorities to fully assess those strategies and detect if illegal defeat devices are used. But there is a difference between information on emission control strategies and information on emissions.

As these strategies concern technical information on the functioning of the engine, they are protected as trade secrets and must remain confidential.
However, the overall information on emissions is public - manufacturers have to declare the maximum value of NOx emissions and the maximum PN in the real driving emissions tests.

 

Why does Europe need a new industrial policy strategy, when the services sector employs more people, and digital technologies will be a bigger area of economic growth in the future?
Services and industry - or to put it more concretely - industrial production and services, are undoubtedly linked in our economies. When it comes to jobs, it is true that the services sector employs more people. But these jobs are often powered by industry - one job in manufacturing creates up to 2.5 other jobs across the value-chain.

As a key driver of productivity and innovation, industry is the basis of economic prosperity in Europe, with manufacturing alone providing 32 million direct jobs. The renewed industrial policy strategy, adopted in September, aims at strengthening our industry’s ability to adapt and embrace changes, such as new business models or digitisation.

Since the beginning of its mandate, this Commission has worked full speed to improve investment opportunities and access to finance, while shaping a fair and favourable legislative environment for the industry to develop. But there are also important technological and geopolitical developments that call for a renewed focus on industry. It was time to identify gaps and look at what lies ahead.

Our thinking is in line with the European Parliament, the Council, and industry who have all asked for a strategy that puts all the various elements of the Commission’s work - horizontal and sector-specific initiatives - together into one place. The strategy paves the way for a more structured cooperation between the EU, member states and regional administrations and industry itself.

 

One of the aims of the new industrial policy strategy is to “empower our industries to continue delivering sustainable growth and jobs”. How do you plan to achieve this?
In a fast changing world with increasingly competitive global markets, our industry must adapt to remain competitive. 

This requires it to embrace digitisation and technological change, develop less polluting and less energy-intense technologies, reduce waste and ensure that workers have the skills they need to work for the industry of tomorrow. Making it happen is a shared responsibility. It requires efforts by the EU institutions, national and regional governments and industry itself.

The EU is improving the overall framework for jobs, growth and innovation. But efforts at EU level need to be matched by national eff orts and the actual innovation needs to come from industry itself.

Companies need to invest in new technologies, embrace innovation and resource-efficiency and adapt their business models to the fast-changing environment.

 

EU industries are struggling to compete against Asian competitors that often have lower production costs. how can the new industrial policy strategy help European manufacturers to compete globally?
We have to find a way to compete, and here our emphasis has to be on quality, technological leadership and productivity.

To remain a global leader, Europe’s industry must be able to benefit from an open, fair and rules-based international trade.

We continue to act decisively, taking measures against unfair trade practices like we do when imposing antidumping duties. The recent agreement by the European Parliament and Council on a new anti-dumping calculation methodology will make these means even more effective.

The Commission also calls for a swift adoption of its revised proposal for an international procurement instrument to promote open and reciprocal access to public procurement markets.

EU rules must also adapt to concerns that in some cases foreign investors - sometimes state-owned - might seek to acquire strategic assets that allow them to control or influence European companies whose activities are critical for our security and public order.

That’s why in September, we proposed a European framework for screening of foreign direct investments that may pose such a threat.

 

You have said the single market does not function properly for services - why not? How will the eCard help in this regard?
Even though services represent two thirds of the EU economy and account for about 90 per cent of new jobs, the services sector is underperforming.

Productivity growth in the sector is low and the rest of the world is catching up. Administrative barriers stop companies from being set up and expanding cross-border, and lead to higher prices for consumers and less choice.

The eCard is one of our proposals to improve the single market for services and help companies and entrepreneurs provide their services cross-border. The eCard offers a simpler digital and delivery-oriented procedure harmonised at EU level. 

It does not limit the rights of the host country to decide if a service provider fulfils all national requirements. It has to be clearly said - its goal is to make offering services cross-border simpler and make the single market work better in the area of services. 

We all, be that on the national or EU administration levels, support the single market that is at the foundation of European integration. The aim of this proposal goes exactly in the direction of completing the single market in the area of services - nothing beyond that. 

This aim should be close to all politicians and citizens in the EU because better functioning single market in the area of services means more prosperity, more jobs, more choice for the consumers and finally, the completion of one of Europe’s top projects, the single market. I can’t imagine anyone being against such a goal.

We are asking the European Parliament and Council to engage constructively on this proposal, which has a strong added value for SMEs in the construction and business services sectors and will fuel growth in the single market.

The success of the new industrial policy initiative will we’ve been told, depend on EU institutions, member states, regions and industry, sharing responsibility - how do you plan to facilitate this?

It’s important to note that most tools to stimulate industrial competitiveness are available at national and regional level. So, we will work with member states to improve the overall framework for investment and we will also set up a new open and inclusive governance mechanism to make the existing policies even more effective.

The high-level industrial roundtable and the EU Industry Day will be the pillar of an open and inclusive dialogue, complementing the institutional governance with Parliament and Council.

Industry Day will be, from now on, an annual event with all relevant stakeholders to ensure that our policies at European, national, regional and local levels deliver on jobs, growth and innovation; and to highlight new trends that may need a policy response.

The roundtable will be set up as a Commission expert group in 2018, to steer future oriented industrial policy actions, provide feedback on the Commission’s ongoing initiatives and actions, and advise on the implementation of industrial policy at different levels.

A strategic forum on important projects of common European interest will identify key value chains where common action and investment is needed.

 

You are responsible for the internal market and SMEs - what is your view on the sharing economy and disruptive technologies, and how should these be regulated? Should this be the EU’s responsibility, or should it be left up to member states?
I see the collaborative economy as an opportunity for all - for consumers as well as businesses. But many still see it as a threat. Absolute bans are only a measure of last resort and it is worrying that some authorities have opted for such approach.

Our 2016 guidelines aimed at ensuring the balanced development of the collaborative economy in Europe by offering clarity on the legal framework applicable to the new business models. We made it very clear that the collaborative economy could not become the grey economy. We are not advocating exemption from regulation or taxation, we are asking for appropriate and proportionate approaches.

When we issued our guidance we didn’t see a need for EU legislation specifically for the collaborative economy, since EU existing rules still apply to the new business models.

At the moment we are assessing the developments in this field across Europe to better understand where problems lie. At the same time, we are working together with EU countries and stakeholders, focusing on collaborative short-term accommodation rentals. 

The idea is to promote the best policy practices across the EU and fight market fragmentation. To this end, we may try to see if member states and stakeholders can agree on a set of guiding policy principles for them to take into account. 

Our approach is clearly one of partnership, bringing all sides together to see how best to develop the collaborative economy in a balanced and sustainable manner in Europe taking advantage of the opportunities offered by the new economy.

 

As part of the new industrial strategy you are looking to modernise the intellectual property framework, and the enforcement of intellectual property rights. with 3D printing technology set to ‘disrupt’ manufacturing, how can legislation keep up with new innovations?
The protection of intellectual property is important for promoting innovation and creativity, which in turn generates jobs and improves competitiveness. The EU needs an attractive, affordable and efficient intellectual property rights (IPR) system to compete on the global scale. 

This is particularly important for SMEs who do not have the same level of resources to manage their IP portfolio as bigger companies. And the system needs to meet the challenges of today’s digital age.

The Commission is reviewing the enforcement of EU intellectual property rules and will soon come forward with a series of measures. In spite of efforts undertaken in recent years, we see that IP infringements are still on the rise. 

About five per cent of imported goods in Europe are counterfeit, endangering people and leading to economic losses. We need to step up the fight against counterfeiting and piracy, within Europe, but also at Europe’s borders and at global level. 

Better judicial enforcement is one important element here, but we also need stronger cooperation between enforcement authorities, and we need to table anti-counterfeiting more proactively as part of our trade and international relation strategies. 

The Commission recently called on online platforms to take all measures needed to fight illegal, including IP infringing content, on line. Still, the private sector can and should do more. 

As you rightly note, new technologies such as 3D printing require us to consider whether our IP framework is still fit for purpose. 

We are currently looking at the implications of 3D printing, to assess for instance, the possible implications thereof for the way we protect designs in Europe. 

Where we see the need for it, we will table targeted initiatives to ensure that our IP framework meets today’s challenges and allows the EU industries to play a lead role at the global level.

 

In your opinion, what should a successful EU industrial strategy have achieved by the end of this Commission?
The strategy addresses the main challenges our industry is facing and paves the way for collaboration between the EU, national and regional authorities and industry. 

As a result of this collaboration, I would like to see a significant and sustained economic growth and creation of new jobs in Europe. And I expect to see our governance mechanism resulting in good ideas being picked up across Europe having real impact on the ground, close to the people. 

I firmly believe that the European Union (and European integration) is the best project we have ever implemented in our continent torn by wars and disputes for centuries. It is a great chance and great opportunity for each and every European. 

We in Brussels must do whatever it takes to show our citizens that integration works in practice, works close to them that European Union guarantees peace, stability, integrity and long-lasting growth.

 

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