Oct 29, 2010

EU sets out new plan to grow high tech industries

Estimated Article Reading Time: 4 min.

The European Commission has moved ahead on two fronts to increase Europe’s competitiveness, spark innovation and boost economic growth, with 50 new measures to underpin the single market and a ten point plan to promote industry.

The European Commission has moved ahead on two fronts to increase Europe’s competitiveness, spark innovation and boost economic growth, with 50 new measures to underpin the single market and a ten-point plan to promote industry.

Fifty measures to reinvigorate the Single Market put forward by the European Commission yesterday (October 27), range from the familiar objective of creating the Community Patent to new attempts to make it easier for SMEs to raise finance and take a larger share of public procurement contracts.

“Right now, the EU Single Market is not delivering as well as it could: it needs to offer more,” said Michel Barnier, Internal Market Commissioner. “There is real urgency: Europe can’t afford to leave this potential unexploited.”

The single market is also at the heart of the new industrial policy announced today, with Antonio Tajani, Commissioner for industry and entrepreneurship, saying the concept of national sectors and industries is obsolete. In the era of globalisation Europe needs an integrated industrial policy Tajani said, as he laid out his ten-point plan.

One item on the list is an industrial policy for the space sector, to be developed with the European Space Agency and Member States, in order to create a solid industrial base underpinning the whole supply chain of space-related companies.

In parallel, there will be moves to improve innovation performance in other sectors such as advanced manufacturing, construction, biofuels and road and rail transport.

A new strategy on raw materials will be drawn up in a bid to ensure sustainable supply and management of domestic primary raw materials.

More prosaically, Tajani made a commitment to test the impact of any new legislation on competitiveness, and to revisit existing legislation to look for opportunities to reduce red tape and cut bureaucratic overheads.

In common with the single market proposals, Tajani called for more technical standards, and support for the creation and growth of start-ups by making it easier for them to access credit and become international.

“This is not business as usual,” Tajani said. Industrial production remains more than 10 per cent below pre-crisis levels and the EU’s international competitiveness is weakening. Starkly, average productivity in the EU is one third below the US and Member States show a continued reliance on medium-skill, medium-technology industries, instead of the high skills, high technology ones. “We must raise our joint ambitions in the area of industrial policy, step up our actions and strengthen European governance,” said Tajani.

It’s not all bad news though: according to the Commission’s assessment, the EU’s competitiveness in nanotechnology, micro and nanoelectronics, including semi-conductors, industrial biotechnology, photonics, advanced materials, and advanced manufacturing technologies is “remarkable”, as are the potential world markets for applications of these technologies. However, factors such as skills shortages, a lack of venture capital, maintaining the manufacturing base and inappropriate regulations could stand in the way of the translation of these technologies into marketable products.

Promoting the Single Market

The Single Market, in place since 1992, has removed many technical, regulatory, legal and bureaucratic barriers to free trade and free movement within the EU. But there are still many areas of “untapped or not fully exploited potential,” administrative obstacles and pieces of legislation that are missing, the Commission noted in setting out the 50 new measures to strengthen the single market.

Each of the proposals is at present just a short paragraph, with a target date. Over the next four months, the proposed measures will be debated by national and regional governments, economic development bodies and industry, with the aim of getting everyone signed up to a list of priority actions and implementing these by 2012 to coincide with the 20th anniversary of the Single Market Act.

“This is a step in the right direction,” said MEP Malcolm Harbour of the European Parliament’s internal market and consumer protection committee. It improves upon the Europe 2020 strategy, which gave “nothing like enough prominence to the single market,” he added.

Unlocking the potential of the Single Market could generate 4 per cent growth in GDP over the next 10 years, according to the Commission’s estimates.

The proposals include the following: *A Community Patent must be adopted, with the aim of issuing the first EU patents in 2014. *The Commission will put forward in 2011 changes to the regulatory framework on standard-setting procedures. *The Commission will adopt a proposal in 2011 aiming to revise the directive on energy taxation to better reflect the EU’s climate change and energy objectives. *By the end of this year, the Commission will evaluate the Small Business Act to align it more closely with the Europe 2020 strategy. In 2011, the Commission will adopt an action plan to improve SMEs’ access to capital markets. *Next year, the Commission will put forward a revision of the directives on accounting standards in order to simplify procedures and reduce administration, a particular burden for SMEs. *By 2012 the Commission aims to ensure that venture capital funds established in any member state can freely operate and invest throughout the EU. *Legislative proposals on procurement will be put forward by 2012 at the latest, aiming to simplify and update European rules and allow public procurement to be used better to support other policies.

Useful links

Industrial Policy communication

Single Market Act

by Anna Jenkinson