Reindustrialisation is essential to relaunching EU economy

It’s time to recognise the importance of our industrial sector and bring production back to Europe, argues Patrizia Toia.

Patrizia Toia | Photo credit: European Parliament audiovisual

By Patrizia Toia

Patrizia Toia (IT, S&D) is the ITRE Committee opinion rapporteur on the New Circular Economy Action Plan

24 Oct 2017

The relaunch of the European economy and the future wellbeing of European citizens depends largely on our success in achieving a real reindustrialisation of Europe. Until recently, not many people in Brussels were aware of that. 

For many years some people cultivated the illusion that factories were the legacy of a dirty and polluting past and that we could subcontract production to third countries while focusing on services coming out clean offices with silent computers and big mirror windows.

Then one day, on 15 October 2008, US bank Lehman Brothers collapsed and, while dealing with the biggest financial crisis of contemporary history, we discovered that even advanced economies are not made only of financial instruments, but need concrete hardware: ‘real’ workers, factories, raw materials and production lines. 


Finance, research and employment depend largely on the industry sector, which accounts for 80 per cent of Europe’s exports and private innovations, and provides high-skilled jobs for citizens. 

So, the EU set out to reverse the trend of delocalisation and boost the industry sector, which in 2012 accounted for about 16 per cent of EU’s GDP and in 2020 should reach 20 per cent.

As a Vice-Chair of Parliament’s industry committee, I have been working on this target, but things turned out more di¬ cult than expected for several reasons. Nowadays the word ‘industry’ is synonymous of ‘change’. New technologies and new environmental standards force us to completely rethink the way we produce things. 

On top of that, the credit crunch and the lack of investments due to the financial and economic crises of recent years have made things even more di¬ cult, considering that in Europe not everyone is aware of the importance of industry. 

Today, the European economy is sending positive signs that we are heading in the right direction, which is exactly why it’s time to speed things up and encourage the transformation of the industrial sector through digitisation, energy efficiency and an approach based entirely on the principles of the circular economy.

That is why I appreciated what Commission President Jean-Claude Juncker said in his state of the union speech. He expressed the will “to make our industry stronger and more competitive” and presented a new industrial policy strategy. The goal is to help our industries stay or become the world leader in innovation, digitisation and decarbonisation.

The package of proposals include a new European cybersecurity research and competence centre, a proposal for a regulation on the free flow of non-personal data, a new series of actions on circular economy, a revised list of critical raw materials, new proposals for clean, competitive and connected mobility, a set of initiatives to modernise the intellectual property framework, an initiative to improve the functioning of public procurement in the EU, extension of the skills agenda to new key industry sectors, a strategy on sustainable finance, initiatives for a balanced and progressive trade policy and a European framework for the screening of foreign direct investments that may pose a threat to security or public order.

I welcome Juncker’s initiative, especially the proposals of tighter rules on foreign direct investments, which is something that have I been requesting for some time. It’s a step forward but I think we should be more ambitious on industrial policy. 

The S&D group wanted to confirm the target of 2020 and to add a more ambitious target for 2030. Furthermore, Juncker’s strategy is largely made up of rebranded proposals that were already on the table.

Above all I am deeply convinced that the objectives of industrial policy cannot be confined to the policies and commissions specifically dedicated to the topic. Reindustrialisation goes hand in hand with consistent commercial, industrial, educational and fiscal policies. 

In July the European Parliament approved a resolution that I wrote that calls on the Commission to base its strategy on an “impact assessment of the integration of industrial policy into the EU’s policy initiatives”.

Trade rules should favour the return of productions on our continent, with fewer discounts on industrial and environmental dumping in emerging countries. 

Careful attention must therefore be paid to small and medium-sized businesses, and we must overcome our educational and cultural delays, as women are currently under-represented in the industry and entrepreneurs only make up 31 per cent of European self-employed workers and 30 per cent of new entrepreneurs.

Finally, in the resolution, we call on the European Union to invest with courage on innovation and education, because our most valuable asset is human capital. 

With the pace of technological change, a major challenge for industry, in particular SMEs, is to better anticipate and manage the transformative change with regard to skills requirements. 

Opportunities for life-long learning are critical to support the numerous transitions that will likely characterise future employment and skills continue to be the best guarantor of social mobility and opportunity.