Opinion of the European Economic and Social Committee on Economic policies that contribute to the European industrial strategy
Date: 2007-09-26
Institutions: European Economic and Social Committee
Subjects: EU industrial policy, economic and social cohesion, economic policy, economic stabilisation, euro, single market

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Opinion of the European Economic and Social Committee on ‘Economic policies that contribute to
the European industrial strategy’

(2008/C 10/24)

On 17 January 2007 the European Economic and Social Committee decided, under Rule 29(2) of its Rules
of Procedure, to draw up an opinion on Economic policies that contribute to the European industrial strategy.

The Section for Economic and Monetary Union and Economic and Social Cohesion, which was responsible
for preparing the Committee's work on the subject, adopted its opinion on 4 September 2007. The rappor-
teur was Ms Florio.

At its 438th plenary session, held on 26 September, the European Economic and Social Committee adopted
the following opinion by 129 votes to two, with five abstentions.

1. Conclusions and recommendations

The objectives of growth, innovation and employment,
1.1
put back in the limelight by the Spring 2000 Lisbon Agenda,
must go hand in hand with a reappraisal and fresh appreciation
of the role of industrial policies in Europe. Whilst upholding the
stability and growth pact and consolidating the single market,
there is a need to find ways of coordinating action that enable
European industry to play a central part in rising to the chal-
lenges posed by globalisation.

Role and policies of the European Central Bank. The
1.3
main aim of the policy choices made by the ECB is to control
inflation and to ensure price stability. The process of achieving
these aims can sometimes act as a brake on investment. Whilst
bearing in mind its priorities, the ECB could, wherever possible,
adopt a more flexible monetary policy in order to boost invest-
ment.

Role of the EIB. The European Investment Bank must
1.4
make a significant contribution to economic and social cohesion
and bolster
for
research and development. The Commission should also equip
itself with new macroeconomic policy tools to encourage indus-
trial development and growth.

industrial development

through incentives

Priority sectors of Community or supranational interest must be
pinpointed among the strategic objectives and bolstered using
appropriate economic instruments. Responsibility for medium-
and long-term industrial strategies rests mainly within the
European sphere, whereas it should be up to the Member States
to deal with the practicalities of implementation.

The need for better fiscal policies. In the sphere of
1.5
fiscal policy, there is a need to cut red tape, particularly for
SMEs. Furthermore, tax incentives should be used to encourage
companies to invest in research and development.

The single currency and the internal market are formidable
instruments but not ends in themselves; the aims remain those
set by the Treaty: economic and social progress and a high level
of employment.

In the light of all the above, the EESC believes that in terms of
economic policies that contribute to the European industrial
strategy, the following areas should be focused on:

The

risks of unregulated financialisation (1) of
1.6
companies. Excessive focus by companies on financial activities
and the ever increasing incidence of purely speculative invest-
ment
fabric, often
hitting production, employment and social cohesion: there is a
need to adopt measures to effectively regulate the involvement
of the financial world in company life.

in industry is endangering the industrial

1.7
Relaunch of the European industrial model. One way
of combating the decline in manufacturing and company reloca-
tion would be to relaunch the European industrial model,
featuring successful districts and sectors of economic activity. In
any case, the industrial fabric requires both hard and soft infra-
structure. It is in the interests of the EU as a whole to finance
these projects.

The Broad Economic Policy Guidelines and the
1.2
Lisbon Agenda. The BEPG,
though an economic policy
guidance and coordination tool, should be tied in more closely
with the Lisbon Agenda initiatives and provide for investment
in innovation and new technologies in the industry sector,
taking account of
the individual
Member States.

the economic situation of

(1) Financialisation:

‘the increasing dominance of the finance industry in the
sum total of economic activity, of financial controllers in the management of
corporations, of financial assets among total assets, of marketised securities
and particularly equities among financial assets, of the stock market as a
market for corporate control in determining corporate strategies, and of fluc-
tuations in the stock market as a determinant of business cycles’, from
Wikipedia
http://en.wikipedia.org/wiki/Financialisation.

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Furthermore, given that services play a central role in the
European economy, they must interact with the business world;
they are in fact
its life-blood, especially those that support
production. These services to companies would soon fail if the
industry sector lost its dynamism.

Research, development and intellectual property. It is
1.8
clear that there is a need to improve results and investment in
research and development, as they are currently far from the
Lisbon Agenda targets. Once again, the EU must step up its
Investment in research, under a new
financial commitment.
industrial strategy, should take into account the EU's new targets
regarding CO2 emissions. The protection of intellectual property
rights is also important for the competitiveness and innovative
capacity of European industry and should be ensured by appro-
priate EU instruments.

1.9
Education and industry. The importance of mutual
dependence/linkages between business and education cannot be
over-emphasised. Schools, universities and third-level institutions
must be aware of the need to equip students with qualifications
that are relevant to business. Business itself needs to communi-
cate its requirements to these institutions. One way to improve
links is to develop Business Parks on university campuses;
another would be to bolster the role of European centres of
excellence and, in other respects, the role of the European Tech-
nology Institute.

1.10
Social dialogue. Identifying synergies and involving all
the stakeholders in achieving structural change can help make
industrial change socially acceptable, if the social partners are
systematically involved in anticipating and managing that
change, and if the dual objective of making businesses competi-
tive and reducing negative social impact is consistently pursued.
In cross-border regions, industrial changes could be facilitated,
by setting up the optional transnational framework for collective
negotiation as announced in the 2005-2010 social agenda.
European Works Councils can also contribute: steps must be
taken to strengthen the competencies of those involved in their
work, so that these councils can execute their role as a key
player in the consultation and dialogue process (2).

2. Background

2.1
The legal basis for implementing a Community industrial
policy is to be found in Article 157 of the Treaty establishing
the European Community (3) and it is repeated in a number of

(2) Social dialogue and employee participation, essential for anticipating and
managing industrial change and Implementing the Community Lisbon
Programme: A policy framework to strengthen EU manufacturing — towards
a more integrated approach for industrial policy, OJ C 24, 31.1.2006; Cohe-
sion Policy in Support of Growth and Jobs: Community Strategic Guidelines,
2007-2013, OJ C 185, 8.8.2006.

(3) Article 157(2) in particular states that ‘The Member States shall consult
each other in liaison with the Commission and, where necessary, shall
coordinate their action. The Commission may take any useful initiative
to promote such coordination’.

important documents. The European Commission's Communi-
cation on Industrial Policy in an Open and Competitive Environment:
Guidelines for a Community Approach (4), published some years
ago, marks a salient point in the history of European industrial
policy. Other documents followed (5): the Commission Commu-
nication on Industrial Policy in an Enlarged Europe (6) touches on
the opportunities and consequences of the planned enlargement
of the European Union. Subsequent documents of note include
in
the Commission's Communications on Some Key
Europe's Competitiveness (7) and Fostering structural change: an indus-
trial policy for an enlarged Europe (8). More recently, the Commis-
sion issued a Communication entitled: Implementing the Com-
munity Lisbon Programme: A policy framework to strengthen EU
manufacturing — towards a more integrated approach for industrial
policy (9), which was followed by the Mid-term review of industrial
policy (10).

Issues

2.2
The introduction of the euro as the single currency led to
the agreement on the stability and growth pact between partici-
pating countries, bringing a renewed need for better coordina-
tion of national economic policies, particularly budgetary poli-
cies.

The recent enlargement taking in the countries of central and
Eastern Europe, on the other hand, poses a significant challenge
to the future of Europe and the need to overcome the conti-
nuing disparities between the various economic, social and
industrial conditions.

EU policies have achieved important objectives, particularly in
consolidating the internal market and more recently with regard
to the free movement of services.

The attention given to all of
these priorities (meeting the
Maastricht criteria, regulating the internal market, particularly
diverse economic and industrial conditions) has been to the
detriment of policy in support of the EU's industrial potential.

Against this backdrop,

2.3
industrial policies have carried
less weight within the strategy for growth and jobs. This is
because the Member States have been given all but free rein in
this area, with supranational agreements generating few returns
and EU coordination initiatives a rarity. Despite commitments
and documents over the last 25 years designed to equip the EU
with an industrial policy to enable it to keep step with the
world's great economic powers, there is a general feeling that
national interests have prevailed. Much has been done to speed

in the Face of Globalisation — How it

(4) COM(1990) 556 final.
(5) See for instance the following two European Commission Communica-
tions in the 1990s: An Industrial Competitiveness Policy for the European
Union, COM(1994) 319 final, and The Competitiveness of European Enter-
prises
encouraged,
COM(1998) 718 final.
(6) COM(2002) 714 final.
(7) COM(2003) 704 final.
(8) COM(2004) 274 final.
(9) COM(2005) 474 final.
(10) COM(2007) 374 final.

can be

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up privatisation and liberalisation, deemed the best incentives
for economic growth, to the detriment of EU policy supporting
the industrial and manufacturing sector.

In today's globalised world, there is a growing need to
2.4
identify the European industrial strategies best placed to respond
to global competition, not only from giants like the USA and
Japan, but also from the emerging Asian powers such as China
and India. Community instruments are therefore needed to rise
effectively to the challenges posed by the rest of the world and
in order to give the EU a headstart in strategic sectors.

2.5
However, the tendency in Europe over the last few years
has been to renationalise industrial policy, particularly in certain
strategic sectors such as energy. The risk is that the predilection
for national rather than European champions, particularly in
sectors requiring a broader market and greater investment, may
actually go against the national interests of the Member States.

2.6 Medium- and long-term industrial strategies and their
flanking economic policies are a European matter, while it
should clearly be up to the Member States alone to implement
those policies and scale them down into national-sized deci-
sions.

2.7
Faced with new economic powers on the world stage
that are more competitive when it comes to labour-intensive
production, European industrial strategy must set its sights on
quality. There is a need to foresee not only which will be the
innovative, quality production, but
leading sectors in hi-tech,
also to pick out the economic instruments that can be made
available to the industrial and manufacturing sectors repre-
senting the interests of the European Union as a whole.

3. A new start for the EU's economic policies

3.1
Since day one, the EU's internal market has been the
driving force behind European integration and economic
growth. The euro as a single currency has given additional
impetus to the role of the single market, making exchanges
faster and safer and improving competition. However, both the
internal market and the euro are tools rather than objectives in
in the Treaty
themselves. The objectives are those set out
and reaffirmed in the conclusions of the European Council of
21-22 June 2007: economic progress, social cohesion and a
high level of employment.

3.2
After an encouraging performance in the second half of
2003, the European economy suffered a downturn during the
second half of 2004, partly as a result of external factors such
as oil prices, which were affected by the international crisis, and
international trade patterns. Progress in 2005, the slight growth
in 2006 and the encouraging first quarter of 2007 (11), confirm
that, at any rate, a stronger European economy will depend
increasingly on exports and ever less on internal demand (12).

3.3
(BEPG)
In the Broad Economic Policy Guidelines
2005-2008 (13), the Council mentioned the instruments, priori-
ties and macroeconomic policies that the Member States need
to adopt, as well as related reforms, necessary for a sustainable
industrial strategy.

The macroeconomic policies set out by the Council in
3.4
the BEPG are aimed at
improving economic growth and
employment, while also stressing the importance of economic
policies for price stability. The measures proposed aim to:

— secure economic stability, while keeping to medium-term

objectives;

— secure a manageable economy and budget, reducing public

debt and bolstering pension and insurance systems;

— encourage the efficient distribution of resources, favouring
spending that nurtures economic growth, and promote
wage trends that contribute to economic stability;

— promote greater consistency between macroeconomic, struc-

tural and employment policies.

3.5
The macro-economic policies of the stability and growth
pact should be coordinated more effectively with the Lisbon
strategy objectives,
in order to engender a single economic
policy for the European Union and the euro area. European
budget reform is needed to underpin the appropriate industrial
strategy choices, redirecting resources to investment that is more
conducive to growth (14).

(11) See Eurostat News Release 64/2007 (15 May 2007).
(12) See Eurostat News Release 50/2007 (12 April 2007).
(13) Council Recommendation 2005/601/EC of 12 July 2005 on the broad
guidelines for the economic policies of the Member States and the Community
(2005 to 2008), OJ L 205 of 6.8.2005, p. 28.

(14) See Lisbon Agenda Group — Workshop on developing the Lisbon Agenda at
European Level — Brussels, 17 November 2006, Synthesis Report by
Maria Joao Rodrigues.

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4. Investing in the Lisbon Strategy

As for reforms intended to increase growth and those
the Council
important

from an industrial viewpoint,

4.1
most
referred to the following priorities:

— improving and encouraging investment

in research and
development, reiterating the 3 % of GDP objective set in
Lisbon;

— exploiting European industry's competitive edge by shaping
a modern and active industrial policy, developing new tech-
nologies, creating an attractive environment for industry,
multiplying the factors for competitiveness in the face of
globalisation, and nurturing centres of entrepreneurship
within the EU, with a focus on quality;

— expanding and boosting the internal market and applying
competition policies more effectively, partly by cutting State
aid;

— promoting a business culture and nurturing SMEs;

— improving and investing in European infrastructure as a key
factor for the smooth running of the European industrial
machine.

The 2003 Sapir report (15) had already considered many
4.2
of these objectives, emphasising the need to uphold the stability
and growth pact. With regard to monetary policy, it argued that
the only way to create the ideal climate for industrial policy was
with measures that kept the cost of money under control and
ensured long-term macroeconomic stability.

4.3
In its own opinion, the EESC called for the BEPG to be
tied in more closely with the other Lisbon Agenda initia-
tives (16).

policy

decisions

However, macroeconomic

4.4
remain
seriously skewed. There is a marked focus on the fight against
inflation and on price stability, and the European Central Bank
uses interest rates too readily but with little flexibility and at
times for reasons difficult to comprehend. In times of strong
growth (1999-2000) the ECB practically doubled interest rates,
but it was extremely slow to reduce them during the long
years of poor growth. Flexible monetary policy combined with
targeted fiscal policies (tight controls and public investment)
could prove
in securing sustainable
long-term growth in the European system.

the winning factors

4.5
The ECB is responsible for maintaining monetary stabi-
lity and keeping inflation in check. These policies can however

(15) An Agenda for a Growing Europe — Making the EU Economic System

Deliver, André Sapir et al, July 2003.

turn out to be obstacles to economic growth in the euro coun-
tries, and therefore also act as a brake on the other 15 ‘conver-
ging’ countries. That is why the ECB's policies need to be coor-
dinated more effectively with the EU's macroeconomic policies.
Clearly, the ECB's decisions must give due consideration to the
fact that although a strong currency has a positive effect on
imports, making them cheaper, it penalises exports.

4.6
Recent months have witnessed modest but encouraging
economic growth in the EU. This growth has been buoyed up
by exports to other markets. This is without doubt a good
thing, but it is really internal demand that needs to be sustained
if growth in the internal market is to be lasting and solid. Wage
policies also contribute to sustaining and building internal
demand, as they give the economy a boost and improve perfor-
mance, while warding off excessively low inflation or a fall in
prices.

5. Better fiscal policies based on common accord

5.1
An agreed strategy that also covered fiscal policies, could
help to secure support measures for industrial development and
the overall strengthening of the European economy. While there
is a need to cut the excessive red tape that burdens companies,
SMEs in particular, there is also a need to improve legislation
through simplification, ensuring both transparency and rigorous
compliance. A tax system that is equitable and redistributive, in
line with growth trends, and which promotes cohesion, is an
important lever for growth, employment and productivity.

The phenomenon of the increasing financialisation (17) of
5.2
companies can have a detrimental effect on the industrial and
manufacturing sector. The impact of this situation is severe both
for the distribution of
income and wealth and in terms of
economic development and employment.

5.3
Increased transparency and better regulation at EU level
are needed, for the following main reasons: 1) hedge funds
represent a high-risk instrument on the financial market;
2) individual investors are still not receiving sufficient attention
and protection; 3) effective rules would protect both business
and the financial market, as well as investors and savers. Trans-
parent and efficient regulation is therefore needed at EU level to
ensure investors receive appropriate and comprehensive infor-
mation. The adoption of the ‘Markets in Financial Instruments
Directive’
step towards
protecting investors, whether they are companies or natural
persons.

also represents

a major

(MiFID),

(16) See EESC opinion on Broad economic policy guidelines and economic

governance, OJ C 324 of 30.12.2006, p. 49.

(17) See footnote 1.

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5.4
The EU and Member States ought therefore to equip
themselves with effective instruments to guard their economies
from speculation and excessive focus on financial activities on
the part of industrial and economic groups, which, rather than
benefiting countries' wealth and wellbeing, present a genuine
danger for social cohesion and employment.

that production unit closures cause as little trauma as possible
for workers and for the welfare of
the regions concerned.
However, the response cannot simply be one of containment.
The abiding objective must be to enable companies to adapt,
and to give workers ongoing training so that they can remain
on the labour market by virtue of their skills.

6. Investing in key sectors

7. Territorial policies

6.1
The companies to play a primary role in the future will
certainly be those concerned with cutting-edge technology such
as alternative energy, nano and biotechnology, aerospace and
these
aeronautics, multi-media and telecommunications. All
sectors are capital rather than labour intensive and therefore
require a highly skilled workforce.

6.2
European industry's traditionally strong sectors (vehicles,
domestic appliances, etc.) need to be flanked by high-quality
production. European economic policy should therefore use
direct and indirect instruments to encourage major European
projects in these spheres.

EIB President Philippe Maystadt,

6.3
in his address to the
EESC, underlined that ‘the key role of the EIB is to promote economic
and social cohesion, and to this end we are prioritising investment in
renewable energy, energy efficiency, research and development, and the
security and diversity of our energy supply’. At the same time, initia-
tives such as the JASPERS programme are aimed at the prepara-
tion of projects on transport networks, the environment and
health.

7.1
For balanced development throughout the Community,
national and EU incentives are needed to encourage companies
to make additional, not just alternative, investments, in order to
extend their customer base and take full advantage of the bene-
fits of the internal market, which now also includes the new
Member States. A European industrial
fabric made up of
successful industrial districts and sectors of economic activity is
still a very relevant model and one that can be competitive even
in the face of the challenges of the future, particularly in certain
specific manufacturing sectors.

The Commission itself (18) has stressed the trend towards
7.2
de-industrialisation and relocation, phenomena that are partly
linked. There is no doubt that the European economy has gone
through an enormous transformation in recent decades: the
manufacturing industry's share in EU output fell from 30 % in
1970 to 18 % in 2001, with a parallel explosion in the services
sector which bounced up from 52 % to 71 %. Relocation affects
mainly low-tech, labour intensive industries; but the real danger
is that research and development activities may also be relocated
beyond European borders, and this is already happening. The
latest figures on industrial new orders, published by Eurostat at
the end of April 2007, also give cause for concern (19).

industrial

to Europe's

There are highly energy-intensive companies that are
6.4
fundamental
fabric. These primary
European industries should be defended at Community level, by
seeking to coordinate Member States'
industrial policies to
enable transitional and longer-term measures, if necessary of a
sectoral nature. However, attention must also be given to the
EU's basic targets for reducing CO2 emissions in order to
combat global warming; there is an opportunity here to recon-
cile the need for internal market growth with current climate
change concerns. In keeping with these objectives, the EU must
take a leading role in the international negotiations on Kyoto
compliance and in safeguarding the recent REACH regulation.

6.5
Certain industries are already heavily affected by a
worrying migration of activities. Every effort is needed to ensure

always been and will
7.3 Manufacturing industry has
continue to be the backbone of the European economy. Many
sectors are reliant on a solid industrial base,
including the
services sector: to abandon it would be damaging as it has enor-
mous potential and many strong points (20). While relocation to
outside the EU has taken place within certain labour-intensive
industries, it is essential that the core of industrial production,
which represents the high added value of our economy, remains
here in Europe.

(18) Communication from the Commission to the Council and the
European Parliament: Some Key Issues in Europe's Competitiveness —
Towards an Integrated Approach, COM(2003) 704 final.

(19) Eurostat News Release 56/2007, 24 April 2007.
(20) The fundamental

importance of a strong and vigorous industrial
sector in Europe is reiterated by the Commission in its Communica-
tion Implementing the Community Lisbon Programme: A policy framework
to strengthen EU manufacturing — towards a more integrated approach for
industrial policy, COM(2005) 474 final of 5 October 2005, and in the
EESC opinion on the communication, OJ C 185 of 8.8.2006, p. 80.

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7.4
A glance at the global companies with the highest turn-
over shows the lasting power of manufacturing in the modern
economy. Furthermore, the most dynamic and innovative strand
of even the tertiary sector, which is growing and is set to
continue growing, is its services to industry (21).

eration with the European Investment Bank. This project
deserves support, particularly in light of the economic, social
and environmental protection objectives set by the European
Union in recent years.

7.5
Over the last few years, the European Commission has
made a number of commitments in support of various indus-
trial sectors; let us consider two by way of example. The auto-
motive industry,
traditionally a strong branch of European
industry, accounting for 3 % of European GDP and 7 % of
employment in the manufacturing sector, has recently attracted
the attention of the Commission.
Its CARS 21 communica-
tion (22) is a bid to launch a comprehensive strategy for the
European car industry, with a view to securing vehicle produc-
tion in the long term, at the best prices for consumers. The
document covers a number of aspects, such as cutting adminis-
trative costs, environmental sustainability, road safety, external
trade and research. The Commission seems to have realised that
the automobile industry and its ancillaries are central to the
European economy and as such require European-level coordi-
nation instruments to guide their development.

7.8
The European Social Fund can be defined as one of the
instruments designed to aid transition in sectors and areas hit
by structural change.
It is particularly geared towards active
employment policies, training and access to the labour market.
The European Regional Development Fund bolsters competitive-
ness, targeting research,
innovation, education and infrastruc-
ture. Only if the socio-economic players are sufficiently involved
in the programming process, under the partnership principle,
will Structural Fund programmes attain their objectives.

8. Research and development

The

competition.

Competitiveness

The textiles sector is another area in which the European
7.6
institutions have taken ad hoc measures. It is particularly vulner-
able as it is extremely sensitive to the consequences of interna-
tional
on
27 November 2003 already underlined the importance of
securing effective interaction between Community policies, espe-
cially through research, innovation, training measures and the
protection of intellectual property rights. Early in 2004, the
Commission set up a high level group (HLG) for the textiles and
clothing sector, with the task of making recommendations on a
series of practical initiatives at regional, national and European
level (23).

Council

7.7
In November 2003, the Commission also launched the
European Growth Initiative, with a view to speeding up
economic recovery in the EU.
includes a ‘Quick Start
Programme’ for public and private investment projects relating
to infrastructure, networks and knowledge, with a view to
encouraging the creation of public-private partnerships, in coop-

It

(21) For the importance of services to production, and the interaction of
services with the European manufacturing industries, see the EESC
opinion on Services and European manufacturing industries: Interactions
and impacts on employment, competitiveness and productivity, OJ C 318 of
23.12.2006, p. 26.

(22) Communication from the Commission to the European Parliament
and Council: A Competitive Automotive Regulatory Framework for the
21st Century — Commission's position on the CARS 21 High Level Group
Final Report — A contribution to the EU's Growth and Jobs Strategy,
COM(2007) 22 final.

(23) Communication from the Commission to the Council, the European
Parliament, the European Economic and Social Committee and the
Committee of the Regions — Textiles and clothing after 2005 — Recom-
mendations
and clothing,
COM(2004) 668 final.

the High Level Group for

textiles

of

8.1
It has been demonstrated that research and development
are necessary conditions for economic growth and industrial
strategies. The EU institutions have made many attempts to
in
promote, encourage and improve results and investment
innovation,
these
emphasising the
matters.

importance of

always

8.2
The Lisbon Agenda set all the Member States the objec-
tive of investing 3 % of GDP in research and development. This
goal still seems far off, and in recent years it has been noted
that those States with a tradition of investing have continued to
do so while the others have not made the expected increase (24).
Ad hoc fiscal measures can also be employed as incentives to
invest in research and development.

As the Sapir report underlines, the European Union's
8.3
investment in research and development is substantially different
from that of the United States. The difference is not only in the
resources directed towards research and development in the
public and private sectors; Europe has fewer researchers, fewer
incidence of high tech
scientific publications, and a lower
products on the international market, and it registers fewer
patents and spawns fewer new successful start-ups than the
USA (25).

(24) See the work of the EESC Lisbon Group, in particular the Resolution on
the implementation of the renewed Lisbon Strategy, of 15 February 2007,
CESE 298/2007.
(25) COM(2006) 728 final.

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8.4
In its Green Paper on The European Research Area: New
Perspectives (26) the Commission proposed a strategy to overcome
the current deadlock on the Community patent, and initiatives
are being prepared to support the emergence of lead markets in
promising technology-intensive sectors.

8.5
The need for a strong coordination body within the Joint
Research Programme and the Competitiveness and Innovation
Framework Programme, to focus more on industrial strategies,
is more evident than ever before.

8.6
Support for research is still largely a matter for national
policy, but there are positive examples of European research
initiatives: most economists would describe the Airbus consor-
tium and the STMicroelectronics joint venture as successful
European champions, rare examples of supranational coordina-
tion that are globally competitive in technologically complex
sectors. The innovation fund could be a factor in the creation of
European industrial consortia, helping increase the number of
supranational success stories.

The ideal

8.7
industrial fabric needs an infrastructure, and
above all a European one. The aim must therefore be to upgrade
and consolidate hard infrastructure, such as transport and IT
networks, ports, transport corridors and carriers, and also soft

Brussels, 26 September 2007.

infrastructure, by focusing on training and coordination of
universities and research centres, which is equally important
particularly in the light of the long-term challenges.

A strong link between academia, research and the busi-
8.8
ness world is essential
in this regard. A strategic approach is
therefore needed, which ensures that students are equipped with
the necessary skills to enter the workplace. Furthermore, public
and private investment will be needed to ensure the increasing
development of university-linked centres of excellence that will
represent a breeding ground for future entrepreneurs.

8.9
Lastly, it is worth noting that the EU's seventh research
framework programme for 2007-2013 (27) has increased the
budget
small and medium-sized enterprises, allocating
for
EUR 1,3 billion for:

— the provision of support for small groups of

innovative
companies in order to resolve common technology-related
problems;

— a guaranteed 75 % funding for research and development in
(as opposed to 50 % in the sixth framework

SMEs
programme);

— developing and coordinating support for SMEs at national

level.

The President

of the European Economic and Social Committee

Dimitris DIMITRIADIS

(26) COM(2007) 161 final.

(27) See the EESC opinion on the Proposal for a Decision of the European
Parliament and of the Council establishing a Competitiveness and Innovation
Framework Programme (2007-2013), OJ C 65 of 17.3.2006, p. 22.