EU Industrial strategy: More ambition, faster implementation
The Coronavirus outbreak has highlighted the urgency of delivering a viable EU industrial strategy, writes Patrizia Toia.
The New European Industrial Strategy package certainly represents an important step forward for the European Union.
For years, companies and industry experts have been asking for a new impetus from Brussels in order to encourage and coordinate the continent’s eff orts towards the fourth industrial revolution. The challenges are those of digitisation, digitalisation and decarbonisation.
Today, however, the emergence of Coronavirus has made the reorganisation of international production chains an urgent issue.
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The relocations era has been over for a while, now the urgency is in setting the goal of strategic production security.
For this reason and to enhance Europe’s strategic autonomy, one of the objectives already present in the EU Industrial Strategy, but needing to be strengthened, concerns measures surrounding the supply of critical raw materials and pharmaceuticals.
We have said for years that Europe’s manufacturing sector is not just about our share of GDP, nor is it an economic activity of the past, but is the heart of a modern economy.
“To ensure the autonomy and industrial independence of Europe, we must reorganise production chains, bringing back to our territory certain strategic production that is now scattered across third countries”
Manufacturing is a source of direct jobs, that generate other jobs in services. It is a great boost to scientific research, digitalisation and innovation and is the key economic activity that will maintain our level of wellbeing.
These are concepts that the Coronavirus emergency has made clear to everyone in a dramatic way. Above all, to Competitiveness Council ministers who met by videoconference on 20 March to exchange opinions on how to increase protective and medical equipment capacity, evaluate aggregated needs, matching offer and demand and allow equipment to reach those who need it.
Ministers discussed innovative solutions proposed by industry aimed at increasing protective and medical equipment supply, including 3D printing, conversion of textiles production into masks, and digital platforms to link production capacity and needs.
In Italy, the Siare Engineering International Group, the only company that produces lung ventilators, has signed an agreement with the historic factories of Ferrari, Fca and Magneti Marelli for the supply of strategic components to increase the production of ventilators.
Another aspect of the EU Industrial Strategy highlighted by the Coronavirus pandemic is that of the single market. With the closing of European borders in an attempt to stop the spread of the virus, we have seen rows of trucks lined up at customs.
“The EU’s industrial strategy is going in the right direction. Now, however, we must be more ambitious, and above all, faster in implementation”
Suddenly we realised how interdependent the economies of EU countries are. This holds even more true for the industrial sector.
To ensure the autonomy and industrial independence of Europe, we must reorganise production chains, bringing back to our territory certain strategic production that is now scattered across third countries.
We must also ensure that the single market continues to function in all circumstances and that barriers that still exist are removed. Estimates show that removing these barriers could generate up to €713bn by the end of the decade.
A new report on barriers to the single market identifies a broad range of obstacles and points to the root causes of such barriers such as restrictive and complex national rules, limited administrative capacities, faulty transposition of EU rules and their inadequate enforcement.
For this we must focus on realising the Action Plan for Better Implementation and Enforcement of single market rules, which aims to address obstacles arising from violations of EU law.
Finally, the Coronavirus outbreak forces us to rethink the support tools for businesses and especially for small and medium-sized enterprises. The economic crisis that will follow risks making many companies bankrupt.
The EU must rapidly launch a major economic support and investment plan, rethinking the role of the state in the economy and enhancing the role of SMEs. Europe’s 25 million small businesses are the backbone of the EU economy, employing around 100 million people and accounting for more than half of Europe’s GDP. SMEs play a key role in adding value across every sector of the economy.
The European Commission acknowledged that SMEs bring innovative solutions to challenges such as climate change, resource efficiency and social cohesion and help spread this innovation throughout Europe’s regions.
They are therefore central to the EU’s twin transitions to a sustainable and digital economy. They are essential to Europe’s competitiveness and prosperity, economic and technological sovereignty, and resilience to external events.
As such, they are a core part of the achievement of the EU’s industrial strategy. Furthermore, SMEs are deeply woven into Europe’s economic and social fabric.
They provide two out of three jobs, bring training opportunities across regions and sectors, including for low-skilled workers, and support society’s welfare, including in remote and rural areas. Every European citizen knows someone who is an entrepreneur or works for one.
The daily challenges of European SMEs in complying with rules and access to information, markets and finance are thus challenges for the whole of Europe.
The Coronavirus crisis has accelerated the social and economic change that was already underway, and this certainly concerns the reorganisation of the industrial sector. The EU’s Industrial Strategy is going in the right direction. Now, however, we must be more ambitious, and above all, faster in implementation.
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