| Author (Person) | Davies, Eric | |||||||||||||||||||||
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| Publisher | ProQuest Information and Learning | |||||||||||||||||||||
| Series Title | In Focus | |||||||||||||||||||||
| Series Details | 3.5.04 | |||||||||||||||||||||
| Publication Date | 03/05/2004 | |||||||||||||||||||||
| Content Type | News, Overview, Topic Guide | In Focus | |||||||||||||||||||||
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On 20 April 2004, the European Commission adopted a Communication entitled Fostering structural change: an industrial policy for an enlarged Europe. Based on the premise that industry has a significant role to play in meeting the objectives set for the Union at the March 2000 Lisbon European Council, the paper both analyses Europe's fear that it is going through a period of deindustrialisation and looks at responses to industrial change. Announcing the new communication, Commissioner Erkki Liikanen, responsible for Enterprise and the Information Society, said that industry 'must continue to be a motor for jobs, innovation and growth. We need to make sure that all our policies are working to support competitiveness and we need to be more aware of the cumulative effects of piling up regulation on businesses. We have also looked at the concerns raised about deindustrialisation. This is not yet a major problem in the Union and the steps we are launching today should make sure it not a problem in the future.' Background In December 2002 the Commission published a Communication Industrial Policy in an Enlarged Europe, which reviewed developments since 1990 and addressed issues such as sustainability and consumer safety. That was followed in November 2003 by a further Communication Some Key Issues in Europe's Competitiveness - Towards an Integrated Approach, which included an analysis of the problem of deindustrialisation. The latest Communication, Fostering structural change: an industrial policy for an enlarged Europe, also addresses the issue of deindustrialisation: 'the relocation of large portions of industrial production to countries with lower costs and fewer regulatory constraints.' Whilst the Commission argues that 'there is no proof of a generalised process of deindustrialisation', it does acknowledge that 'European industry is having to face up to a process of structural change', which includes the advent of competition 'which is perceived as unbeatable, and sometimes unfair.' However, according to the Commission, the process of deindustrialisation 'is not inevitable' and industrial change - which can be beneficial overall - 'should be encouraged, in particular by policies that facilitate the development and the use of knowledge.' This 'shift in resources and jobs towards activities with high “knowledge” content' both reflects current trends and fits the Lisbon Strategy aim of making the Union the world's most competitive knowledge-based economy by 2010. Whilst acknowledging that 'European industry is clearly making encouraging achievements', the Commission's Communication also identifies 'major challenges' facing industry in the EU, which it characterises as:
These concerns for the Union's ability to attain and retain competitiveness follow those expressed in the Commission's fourth annual Report on the Lisbon Strategy, prepared for the Spring European Council in March 2004 (see: European Sources Online: In Focus: In that document, the Commission complained that Member States have not been quick enough to implement relevant legislation and identified industrial and service sector competitiveness as one of three areas which are considered crucial for growth, but which face particular problems. Competition policy is also seen to have a key role in the Union's quest for competitiveness, and the new Communication on industrial policy was accompanies by one entitled A pro-active Competition Policy for a Competitive Europe, which sets out the new regulatory framework for competition which entered into force on 'enlargement day' - 1 May 2004. Enlargement is seen to offer an opportunity to EU industry, due to the expansion of the Single Market (the Union's population has grown to 450 million) and from the competitive advantage which - at least initially - the New Member States will derive from lower labour costs. Indeed, those lower costs might persuade some companies to invest in the 'new EU' rather than in other low-cost economies, such as India and China. Whilst the Commission believes that business must take the opportunities offered by enlargement, it also appreciates the need to promote EU-level policies to support industry's willingness and ability to adapt to change. The Commission's Communication therefore proposes that EU action should focus on three areas: 'Firstly, the European Union must continue its efforts in regulating better, and to create a regulatory framework that is favourable to industry. Therefore, in the framework of the integrated impact assessment of Commission proposals and initiatives, which covers the three pillars of sustainable development, the evaluation of competitiveness aspects needs to be deepened. Also efforts need to be made to evaluate regulation's cumulative impact, for example, on certain sectors. These efforts should not be limited to the Commission alone: they should commit also the other Community institutions and the Member States. Secondly, the synergies between different Community policies having an impact on industry's competitiveness need to be better exploited. The Commission has identified a number of specific initiatives, in 5 different domains, which could improve these synergies, and particularly the capacity of European industry to confront the problems of structural change. In the domain of knowledge, it is, in particular, innovation, research, training and competition policies which have a key role to play. Similarly, the functioning of markets can still be improved, whether it is in addressing the shortfalls of the internal market or in eliminating some tax obstacles to its full use by business. Cohesion policy, and in particular regional policy and employment policy can also contribute actively to the process of structural change, specifically by promoting the development and the spread of knowledge. As for sustainable development, this has a positive contribution to make to industrial competitiveness, notably through the development of a policy of sustainable production. Finally, the international dimension of industrial policy must be further advanced, in particular to improve the access of Community companies to the markets of third countries, and to export the regulatory approaches that have been successfully implemented by the Union inside the single market. Thirdly, the Union must continue to develop the sectoral dimension of industrial policy. This implies analysing the effectiveness at a sectoral level of policy instruments which are of a horizontal nature, with a view to evaluating their relevance and to propose, if necessary, the appropriate adjustments. The Communication presents the sectoral initiatives that have already begun over the last few months and announces several new initiatives in sectors such as the car industry or mechanical engineering.' Further information within European Sources Online European Sources Online: Topic Guides
European Sources Online: In Focus:
European Sources Online: European Voice:
Further information can be seen in these external links: EU Institutions European Commission DG Press and Communication
Eric Davies Background and reporting on the week's main stories in the European Union and the wider Europe. |
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| Subject Categories | Business and Industry | |||||||||||||||||||||
