European attractiveness survey 2014

Why Europe needs an industrial renaissance

José Manuel Barroso - President, European Commission

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Europe has been able to overcome the most difficult phase of the crisis, and this year is likely to be a turning point. The economic recovery started during the last quarter of 2013, and is expected to continue spreading across countries and gaining strength.

However, the challenges that still lie ahead demand that we step up our action for economic recovery and job creation: unemployment remains at unacceptably high levels, investment is estimated to have slumped by €380b since 2008 and the contribution of manufacturing to GDP has continued to decline.

“Our strategy for an industrial renaissance aims at a strong and well-functioning single market, an improved business environment, a renewed energy and climate policy, better access to finance ..., skills development, support to entrepreneurship and, externally, an ambitious trade policy.”

Restoring growth and prosperity therefore requires a stronger focus on our industrial competitiveness. This is why the European Commission (EC) has called for a “European industrial renaissance,” which was debated at the March European Council and is aimed at bringing the share of industry in Europe's GDP to 20% by 2020.

Industry still plays a key role in our economy. It accounts for over 80% of Europe’s exports and a surplus of €1b per day in 2012, as well as 75% of trade within the single market and 80% of private research and innovation. One in four private sector jobs are in industry.

But Europe's industry is facing various challenges: subdued internal demand, an uneven business environment, low levels of innovation and investment, higher energy prices than our competitors, and difficulties accessing affordable materials, qualified labor and capital.

Europe's industrial base has to be rejuvenated. Our strategy for an industrial renaissance aims at a strong and well-functioning single market, an improved business environment, a renewed energy and climate policy, better access to finance — in particular, for small and medium-sized enterprises (SMEs), skills development, support to entrepreneurship and, externally, an ambitious trade policy.

This strategy is supported by substantial European funding via four major programs. Under Horizon 2020 almost €80b will be invested in Research and Innovation projects during 2014-2020. We have also launched COSME, the first program dedicated to SMEs, while European structural and investment funds, will make available €100b for smart specialization in Member States and the regions. Finally, based on Horizon 2020 we have proposed an innovation investment package amounting to €22b in public private partnerships to support our growth agenda.

Now the real key issue is implementation. And a crucial element for the successful implementation of the European Union (EU) industrial policy objectives is the involvement of all stakeholders, including all institutions, all Member States at national and regional levels, and industry. This is a shared responsibility.

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