Annexes to COM(2014)14 - For a European Industrial Renaissance - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2014)14 - For a European Industrial Renaissance. |
|---|---|
| document | COM(2014)14  |
| date | January 22, 2014 |
The Commission will continue using all instruments at its disposal, including a mapping exercise of raw materials diplomacy currently underway, to safeguard access to raw materials in a sustainable way. Special attention will be paid to this chapter in ongoing and future trade negotiations.
The Commission will consider elaborating a Communication on the European Innovation Partnership (EIP) on raw materials to explain how the European Commission, Member States, industry and academia intend to work together to take forward the 2013 Strategic Implementation Plan of the partnership towards improvements in research and innovation, legislative environment or standardisation.
Concrete targets will include the launch of up to 10 pilot projects to promote technologies for the production and processing of primary and secondary raw materials, to find substitutes for at least three applications of critical and scarce raw materials, as well as to create better framework conditions for raw materials in Europe[27].
To facilitate industry in making this shift, the Commission will present in 2014 a legislative initiative on resource efficiency and waste. The initiative will build on progress in the implementation of the Roadmap to Resource Efficient Europe and set out the key building blocks needed to unlock EU economic potential to be more productive whilst using fewer resources and advancing towards a circular economy. It will include conclusions drawn from the development of suitable indicators and targets, and the review of the key targets in EU waste legislation (in line with the review clauses in the Waste Framework Directive, the Landfill Directive and the Packaging Directive) and carry out an ex-post evaluation of waste stream directives, including an assessment of options to enhance coherence between them.
In addition and based on preliminary assessments, the Commission will wherever necessary propose measures to eliminate price distortions that prevent EU firms to have access to key inputs for industry at international market prices. The Commission will ensure policy neutrality in access to biomass for different purposes to enable efficient application of the cascade principle in the use of the biomass to ensure an efficient and sustainable use of natural resources. Also if deemed necessary, it will consider measures to enable industry to have access at global market prices to key inputs such as bio-ethanol or starch for bio-based industrial activities emerging from traditional sectors such as chemicals, paper and other forest-based industries.[28]
3.3. Upgrading skills and facilitating industrial change
Skills feature as a major policy element in the Europe 2020 agenda. The Commission has put in place an overall strategy for improving education and training systems via anticipation and investment in human capital supported by EU financial instruments, tools to monitor skills and training needs and trends, and specific initiatives to bring together the relevant actors dealing with apprenticeships, especially those with crucial information and communication technologies skills, including the social partners.
Skills mismatches and training issues are likely to remain a key challenge for EU industry in the coming years, especially as progress in manufacturing technologies will increase demand for specific skill and training sets. There are significant differences in skills achievements and in the effectiveness of vocational training systems across Member States. These, as well as the high unemployment rates in crisis-hit Member States require immediate action to invest more in education and training. It also requires improving cross-border mobility. To this end, the Commission has adopted a comprehensive reform of EURES that will lead to tighter cooperation among the European Public Employment Services of the EU and EEA with a view to facilitating mobility and skills-based matching, through a range of new services and products.
The contribution of apprenticeships to supporting industrial competitiveness is widely recognised. Large differences in skills achievements and in effectiveness of vocational training systems across Member States correlate with acute unemployment in crisis-hit Member States. Initiatives such as the European Alliance for Apprenticeships will continue supporting the development of quality and effective apprenticeships resulting from strong partnerships between employers and education across the EU.
In addition, the Commission is developing a new generation of the Erasmus for young Entrepreneurs programme, as well as other instruments to make available traineeships in firms on a cross-border basis[29] through the active involvement of industry and SMEs. The Rethinking Education Communication[30] calls for a strong focus on aligning skills supply with labour market needs across Europe, now reinforced and supported by the new Erasmus+ funding programme. The Commission invites the Member States to support these efforts.
Currently, only 0.3 % of the EU’s population moves to another Member State annually for professional purposes, compared to 2.4 % in the USA. The EU has a unique role to play, to facilitate learning mobility between both education and training institutions through the Erasmus+ programme at all levels: apprenticeships, traineeships, and higher education exchanges. Industry and SMEs’ participation in such initiatives will be further encouraged. In emerging sectors and areas of economic activity, Knowledge and Innovation Communities will help to make available the skills needed in these new markets.
Stakeholders at all levels should strive to anticipate and manage skills and training needs. Industrial policy must also facilitate industrial change and help modernise industrial structures to avoid drastic, wasteful restructuring situations. .
Since the impact of restructuring is most directly felt at regional level, managing and anticipating change requires regions to be actively involved. In the vein of successful ‘smart specialisation’ strategies, policy initiatives at that level (on infrastructure, training, research and innovation) should therefore take into account the effects of forthcoming restructuring.
To help regions modernise the industrial base through the channelling of resources towards more productive sectors and to support efforts that minimise possible social impacts, the Commission will propose a comprehensive approach to anticipating and facilitating industrial change at regional level.
Finally, the Commission will present early in 2014 a Communication on job creation in the green economy to focus efforts on key economic sectors with job creation potential and the development of related emerging skills. [31]
4. SMALL AND MEDIUM SIZED ENTERPRISES AND ENTREPRENEURSHIP
EU industrial policy has traditionally paid much attention to SMEs, which have been mainstreamed into our policy approach. By the end of 2013, the Competitiveness and Innovation Programme (CIP) had assisted financial institutions in providing about EUR 30 billion of new finance for more than 315 000 SMEs and have created or maintained directly about 380 000 jobs. In addition, in the same period, Structural Funds provided some EUR 70 billion in support of enterprises, predominantly SMEs. Nearly 200 000 projects have been funded supporting several SMEs each, including 78 000 start-ups and the creation of at least 268 000 permanent jobs (and safeguarding many more).
Regulatory and administrative costs can impact SMEs up to ten times more than larger companies. The Commission has systematically promoted simplification for SMEs through exemptions for micro-enterprises and the application of the Think Small First principle. Framework conditions for SMEs have been improved considerably since the Small Business Act (SBA) was adopted five years ago. The average time and cost of starting up a business have been cut (from nine to five days and from EUR 463 to EUR372). However, the time and cost to obtain all the licences required to start commercial operations remain very high in some Member States.
The new financial perspectives for 2014-2020 make available new, more powerful instruments in support of entrepreneurship and SMEs. For the first time, they include a programme, COSME, specifically targeting SMEs. It has a budget of EUR 2.3 billion to add to the contributions made by other EU policies. The new cohesion policy pays particular attention to SMEs’ competitiveness. A dedicated instrument in Horizon 2020 provides funding for early-stage, high-risk research and innovation by SMEs. The new rural development policy further boosts start-ups and the competiveness of SMEs in rural areas.[32]
In addition to this financial support, the Risk Finance State Aid Guidelines are particularly sensitive to the problems that SMEs face in financing their activities.
Still, to release their full potential, SMEs must overcome the barriers that limit their growth. The average SME is smaller in Europe than in the U.S. There are also differences between SME-sizes within the EU: The average SME in Germany has 7.6 workers, compared to 3.6 workers in Spain and 3.2 in Italy. This has significant consequences: the smaller the company, the greater its difficulty in investing in innovation, exporting and integrating global value chains, thus compromising their competitiveness.
The potential of clusters to create favourable innovation ecosystems for mutually reinforcing groups of SMEs needs to be better exploited as a means of promoting growth. The Commission will facilitate the matchmaking of SMEs wishing to integrate into world-class clusters aiming for excellence and cross-European value chains. The focus will not be limited to industrial sectors, but on facilitating cross-sectoral and cross-border collaboration and innovation.
Value-added chains, from the procurement of raw materials to business services and distribution, as well as links with research, training and education centres must be better integrated. Cluster-facilitated demonstration projects for value chain innovation will also be financed through Horizon 2020 in support of the implementation of smart specialisation strategies. In addition, the Commission will reinforce the Entrepreneurship Action plan to develop entrepreneurial skills and attitudes and to facilitate individuals in developing new ideas commercially.
An updated Small Business Act (SBA) could create more synergies with the reform process under the European Semester, helping SMEs to grow and create jobs. The Commission will consider actions and if appropriate propose new legislative measures, to ensure that it is possible to start up a company in any Member State at a maximum cost of EUR 100 and within three days. A target of one month to have the necessary licences will also be considered. Finally, the Commission is studying measures to reduce the duration of court litigation on credit recovery for companies, to recover from financial difficulties and avoid insolvency by having access to cost-effective debt restructuring procedures and to give a second chance to honest entrepreneurs and to facilitate the transfer of business. The Commission strongly requests Member States to introduce an SME Test or an equivalent system in their decision-making process and to reduce the administrative burden.[33]
Finally, the Commission is exploring further possibilities to help SMEs develop cross-border synergies while maintaining a flexible and light regulatory framework for SMEs. Business networks present interesting business opportunities in particular to strengthen cross-border cooperation. Through enhanced intra-community specialization, business networks could also be an important factor contributing to innovation. The Commission will explore to what extent, e.g. by way of practical guidelines, some targeted measures could be proposed (e.g. standards issues, terminology or labelling) which can foster the development of business networks.
5. INTERNATIONALISATION OF EU FIRMS
EU's exports and trade surplus have played an important role in mitigating the impact of the crisis. With an estimated 90 % of global growth coming from overseas by 2015, access to third country markets will remain a key feature for Europe’s competitiveness. EU industry has largely remained competitive on international markets, yet continued strong export performance cannot be taken for granted. European firms need to stay innovative and to integrate into the growing web of value chains extending around the world. Integration in the global economy must go hand-in-hand with promoting open, fair markets worldwide.
Trade policy is at the core of the EU’s internationalisation agenda, not only to open markets but also to defend EU interests and actively promote a level playing field in third markets. The EU is committed to further promoting free trade through WTO, as shown by the recently adopted agreement on trade facilitation. In parallel, the EU is pursuing an unprecedented bilateral trade and investment agenda with Free Trade Agreements (FTAs) that is currently the most important means to improve market access. The completion of on-going FTA negotiations could potentially boost EU GDP by 2% (EUR 250 billion). The Commission has also proposed an amendment of the Trade Defence Instruments (TDI) and calls on the Council and Parliament to reach rapid agreement to reinforce the TDI system and reduce associated costs to make it more effective in enforcing fair competition.
5.1. Market access
Following the advances in common foreign policy, the start of Missions for Growth and the development of the Market Access Strategy the EU should step up its efforts to engage in economic diplomacy, based on solidarity between Member States, and to speak with a stronger voice to economic partners to defend European investments and interests abroad. Competition conditions are not even across global markets and unfair conditions are imposed on European companies operating in key emerging markets.
The European public procurement sector is the most open in the world, yet EU firms encounter difficulties entering public procurement markets abroad. In recent FTAs the EU has obtained good improvements in accessing procurement markets. For example, bilateral negotiations with Canada have yielded significant advances in the opening of procurement markets at sub-federal levels. Similar advances will be pursued in other bilateral negotiations, notably with the United States and Japan.
On top of that, the Commission has proposed a new instrument that will, if approved by Member States and the European Parliament, allow the EU to tackle imbalances in international public procurement markets.[34] Through this procedure, contracting authorities in Member States would be able to exclude bidders for large contracts that use goods and services originating in a non-EU country where procurement markets are highly protected. This is a good example of how reciprocity can deliver positive results for the EU in an international context.
Services represent about 40% of the value added in European manufactures exports. About a third of the jobs generated by these exports are actually located in companies that supply the exporters of goods with auxiliary services. Therefore, better, cheaper services are a key variable in the industrial competitiveness equation. Improving EU firms´ integration in global value chains will facilitate access to high quality services and improve the competitiveness of EU goods and services exports.
Efforts to increase the internationalisation of SMEs stand out as a particular priority. In the EU, the top 10 % of exporting firms typically account for 70-80 % of export volumes and the Commission will seek to increase not only export volumes, but also the number of exporting firms to facilitate the integration of EU firms in global value chains.
Enhancing access to markets requires the use of a mix of trade policy instruments that address the concrete problems faced by our companies when exporting or investing in third countries. The Market Access Strategy plays a key role in addressing these challenges through the joint efforts of the Commission, Member States and Business. Strengthening cooperation among the different stakeholders will increase effectiveness and success in tackling those barriers.
To promote access to markets around the world, the Commission will:
• continue within our overall FTA negotiating strategies with key bilateral trade partners, inter alia the U.S., Canada, Japan and India, to pursue improved market access for European industry and follow up on existing FTAs through regular monitoring, assessment and implementation.
• continue to pursue Deep and Comprehensive Free Trade Agreement negotiations and agreements on accreditation and acceptance of industrial products between the EU and Southern Mediterranean countries and the countries of the Eastern Partnership.
• continue to work within the WTO bodies to prevent and counter third countries creating technical barriers to trade, including through the use of dispute settlement when needed.
• reinforce Missions for Growth and capitalise on the services of the Enterprise Europe Network to promote the internationalisation of SMEs and to support the organisation and follow-up actions of Missions for Growth.
• conduct SME dialogues and foster cooperation with our international partners — bilaterally with the U.S., China, Russia, and Brazil and multilaterally in the Eastern Partnership, the EU-MED Industrial Cooperation, the enlargement and ACP countries.
• continue implementing the Market Access Strategy as an instrument to address the concrete problems face by European companies, with a particular focus on SMEs, which often face the greatest challenges in addressing trade barriers in third countries.
5.2. Standardisation, regulatory cooperation and intellectual property rights
The Commission will continue to promote international standards and regulatory cooperation, building on the EU’s role as a de facto standard setter and to take a leading role in reinforcing the international standardisation system. Regulatory cooperation with other countries will continue to be a priority, especially in on-going bilateral negotiations with the United States and Japan where the primary focus will be on ‘behind-the-borders’ obstacles to trade and investment. Raising the level of transparency and regulatory convergence will significantly enhance overseas opportunities for EU companies and help reduce the costs of accessing markets.
In a world where competitiveness often derives from first-mover advantage and branding, it is increasingly important for EU companies to uphold their industrial property rights in all relevant markets, especially in creative industries where counterfeiting is a serious problem. To extend support provided to businesses, the Commission has already expanded its industrial property rights helpdesks network to ASEAN and MERCOSUR to offer services across a broader geographical area and will consider further geographical extensions of such support services.
6. Conclusion
Europe urgently needs to strengthen the basis for post-crisis sustainable growth and modernisation. To that end, it must send a clear signal of its commitment to reindustrialisation, the modernisation of Europe's industrial base and the promotion of a competitive framework for EU industry.
The importance of the challenges ahead for Europe’s future calls for attention and policy guidance at the highest political level, the European Council. This is vital to ensure the coherence and prioritisation of all instruments at the EU’s disposal. An industrial strategy cannot be put into practice as a stand-alone policy as it has numerous interactions and overlapping effects with many other policy areas.
Consequently, the Commission calls on Member States to recognise the central importance of industry for boosting competitiveness and sustainable growth in Europe and for a systematic consideration of competitiveness concerns across all policy areas.
To that end, the Commission considers that the following priorities should be pursued to support the competitiveness of European industry:
· Continue deepening the mainstreaming of industrial competitiveness in other policy areas to sustain the competitiveness of the EU economy, given the importance of the contribution of industrial competitiveness to the overall competitiveness performance of the EU. For instance, particular attention must be paid to increasing productivity in business services to increase industrial competitiveness and the competitiveness of the EU economy in general.
· Maximising the potential of the internal market by developing the necessary infrastructures, offering a stable, simplified and predictable regulatory framework favourable for entrepreneurship and innovation, integrating capital markets, improving the possibilities for training and mobility for citizens and completing the internal market for services as a major contributing factor to industrial competitiveness.
· Decisively implementing the instruments of regional development with national and EU instruments in support of innovation, skills, and entrepreneurship to deliver industrial change and boost the competitiveness of the EU economy.
· To encourage investment, businesses require access to critical inputs, and in particular, energy and raw materials, at affordable prices that reflect international cost conditions. The design and implementation of policy instruments for different objectives both at EU and national levels must not result in price distortions that imply disproportionately higher relative prices for these inputs. Action should also be taken in the internal market and at international level to ensure the adequate provision of these inputs, as well as to increase energy and resource efficiency and to reduce waste.
· Do the utmost to facilitate the integration of EU firms in global value chains to boost their competitiveness and ensure access to global markets on more favourable competitive conditions.
Finally, the objective of revitalization of the EU economy calls for the endorsement of the reindustrialisation efforts in line with the Commission´s aspiration of raising the contribution of industry to GDP to as much as 20% by 2020.
[1] Rueda-Cantuche, José M.a, Sousa, Nb., Andreoni, Va. and Arto, Ia. "The Single Market as an engine for employment growth through the external trade", Joint Research centre, IPTS, Seville, 2012. In this Communication, manufacturing refers to Section C and divisions 10 to 33 of NACE Rev. 2. Industry refers to a broader set of activities including also mining and quarrying and energy activities.
[2] Estimate based on Eurostat trade statistics. This figure refers to manufactured products only and therefore, it does not include trade flows of energy and raw materials where the EU presents a negative trade balance.
[3] It is worth noting that while in some countries (Slovakia, Lithuania, Austria, Germany and the Netherlands) the share of manufacturing in GDP has increased since 2007, it has fallen in the rest.
[4] European Competitiveness Report 2013 ‘Towards knowledge-driven Reindustrialisation’ at http://ec.europa.eu/enterprise/policies/industrial-competitiveness/competitiveness-analysis/european-competitiveness-report/files/eu-2013-eur-comp-rep_en.pdf and ‘Member states Competitiveness Performance and Implementation of EU Industrial Policy’ at http://ec.europa.eu/enterprise/policies/industrial-competitiveness/monitoring-member-states/files/scoreboard-2013_en.pdf.
[5] For both electricity and gas, the price differential with external competitors (with the main exception of Japan) is increasing.
[6] COM(2012) 582 final "A Stronger European Industry for Growth and Economic Recovery" of 10.10.2012 and COM(2010) 614 final "An Integrated Industrial Policy for the Globalisation Era Putting Competitiveness and Sustainability at Centre Stage" of 28.10.2010. Several Member States including France, Spain, Germany or the UK have also defined industrial policies or strategies at national and regional level in recent years.
[7] These mutually agreed contractual arrangements by Member States could support the implementation of relevant aspects of industrial policy reflecting the economic policy priorities identified in the European Council's shared analysis of the economic situation in the Member States and the euro area as such on the basis of the country-specific recommendations.
[8] The package is a major step to create a functioning Single European Rail Area, where standardised trains and rail components progressively replace the wide array of customised rolling stock and rail vehicle authorisation procedures are streamlined. The Shift2Rail joint undertaking will support this process by pooling public and private funds to speed up the development and deployment of new technologies and solutions.
[9] In the road haulage sector, better enforcement of market access provisions is necessary for further market opening. Harmonisation of safety and technical rules in road haulage has already taken place setting the stage for a possible liberalisation of this sector at EU level.
[10] On 14 October 2013, the Commission adopted a list of 248 key energy infrastructure projects, which on the basis of the new guidelines for trans-European energy infrastructure (TEN-E) will benefit from faster and more efficient permit granting procedures and improved regulatory treatment. In addition, the Council and the European Parliament agreed in December 2013 on the creation of the Connecting Europe Facility (CEF), a €33.2-billion fund to finance and attract investment to improve Europe's transport, energy and digital networks. The CEF will contribute to create high-performing and environmentally-sustainable interconnected networks across Europe. In the CEF, €5.85 billion have been allocated to trans-European energy infrastructure for the period 2014-20 that will contribute to market integration and supply security in the EU's energy system.
[11] COM(2013) 18 final of 24.1.2013 "Proposal for a Directive of the European Parliament and of the Council on the deployment of alternative fuels infrastructure".
[12] Commission Communication COM (2014) 25 final of 22.01.2014 ‘A vision for the internal market for industrial products’ of 22.01.2014.
[13] This initiative proposes common methods to measure the environmental performance of products and organisation. By providing comparable and reliable environmental information about products will facilitate the integration of markets for those goods across the EU.
[14] Single Market Integration Report at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2013:0785:FIN:EN:PDF
[15] Communication of 8 June 2012 (COM (2012) 261 final "A partnership for new growth in services 2012 – 2015)
[16] In 2008, the World Bank’s Doing Business listed eight Member States in the top 20, three of them in the top 10. In 2013, there were only 6 Member States in the top 20, and two in the top10.
[17] See Competitiveness Council Conclusions of 2-3 December 2013.
[18] In addition, other initiatives are undertaken to facilitate the implementation of regulations in specific areas. For instance, EU waste legislation is under review with a view to make it clear and easily enforceable and to facilitate the recycling of secondary raw materials.
[19] See forthcoming Staff Working Document "Advancing Manufacturing – Advancing Europe.
[20] For a description and interpretation of the cascading principle, see
http://ec.europa.eu/research/bioeconomy/pdf/201202_commision_staff_working.pdf - Commission Staff Working Paper that is accompanying the Commission's Communication on the Bioeconomy Strategy – see pages 25-26, 2nd paragraph in section 1.3.3.1. and http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML+REPORT+A7-2013-0201+0+DOC+PDF+V0//EN – European Parliament Opinion on the Commission Communication on the Bioeconomy Strategy – see item 28 on pages 6 & 7.
[21] The Commission recently selected two smart grid projects as Projects of Common Interest for trans-European energy infrastructure.
[22] European Directive 2011/7/EU on combating late payment in commercial transactions of 16.2.2011 at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2011:048:0001:0010:en:PDF
[23] These prices are not corrected by quality differences, as EU electricity supply is more reliable with fewer cuts than in these countries.
[24] COM (2014) 21 final of 22 January 2014 "Energy Prices and Costs in Europe". See this Communication for a detailed account of the evolution of energy costs and prices.
[25] COM(2014) 15 final “A Policy Framework for Climate and Energy in the period from 2020-2030”, COM(2014) 20 final “Proposal for a decision of the European Parliament and of the Council concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading scheme amending directive 2003/87/EC”, COM(2014) 23 final, “On the exploration and production of hydrocarbons (such as shale gas) using high volume hydraulic fracturing in the EU” and C(2014) 267 final “Commission recommendation on minimum principles for the exploration and production of hydrocarbons (such as shale gas) using high volume hydraulic fracturing in the EU”, all of 22.01.2014.
[26] Materials costs represent more than 40% of the manufacturing costs on average according to the VDI (The Association of German Engineers) "Cost Structure of the Manufacturing Sector". It is estimated that resource efficiency improvements could reduce material inputs needs by 17 to 24% by 2030. See "Macroeconomic modelling of sustainable development and the links between the economy and the environment" (2011), GWS et al for the Commission at http://ec.europa.eu/environment/enveco/studies_modelling/pdf/report_macroeconomic.pdf
[27] In the context of the second pillar of the Raw Materials Initiative the Commission will publish a Report on National Minerals Policy Indicators in 2014 on Member States performance on the permit licensing and the land use planning as well as launching a public consultation in order to explore with all stakeholders the political options towards a possible harmonisation of some aspects of permitting procedures and land use planning.
[28] See sections on the chemicals and forest-based industries in the accompanying Staff Working Document.
[29] See the Proposal for a Council Recommendation on a Quality Framework for Traineeships, of 4 December 2013, COM (2013) 857 final
[30] COM (2012) 669 final, “Rethinking Education Investing in skills for better socio-economic outcomes” of 20.11.2012.
[31] Employment and social aspects of anticipation of change and restructuring have been dealt with in the 13 December 2013 Commission Communication (COM/2013) 882 final).
[32] For the specific potential of "blue growth" see COM(2012) 494 final "Blue Growth - opportunities for marine and maritime sustainable growth" of 13.9.2012.
[33] These proposals will be coordinated and complement other actions in preparation in the field of Justice to facilitate cross-border debt recoveries. Also in that field and as a follow-up to the 2012 Communication on “A new approach to business failure and insolvency”, minimum standards will allow companies in financial difficulties to restructure efficiently their debts and avoid their insolvency.
[34] COM(2012) 124 final of 21.3.2012, Proposal for a Regulation of the European Parliament and of the Council on the access of third-country goods and services to the Union’s internal market in public procurement and procedures supporting negotiations on access of Union goods and services to the public procurement markets of third countries.