Opinion of the Committee of the Regions on ‘A stronger European industry for growth and economic recovery’
Date: 2013-04-11
Institutions: European Committee of the Regions
Subjects: EU industrial policy, economic growth, economic recovery, industrial development, innovation, small and medium-sized enterprises








C_2013139EN.01001101.xml










17.5.2013   


EN


Official Journal of the European Union


C 139/11





Opinion of the Committee of the Regions on ‘A stronger European industry for growth and economic recovery’
2013/C 139/03
THE COMMITTEE OF THE REGIONS






—


underlines that industrial policy needs to be one of the pillars of the European venture, treated as a genuine political priority on the same political footing as cohesion, infrastructure and agriculture;










—


believes that the European Commission must harness all the potential of the Lisbon Treaty in the area of industrial policy pursuant to Article 173 TFEU;










—


supports the European Parliament's proposal to set up a steering group in order to bring together European, national, and regional and local powers and the resources currently scattered across all levels and sectors;










—


draws attention to the fact that many local and regional authorities have already placed economic, social and environmental innovation at the centre of their development strategies: they have the networks and the experience to develop the innovation ecosystems which SMEs need to thrive;










—


proposes that project bonds be issued to finance SMEs, channelling regional investment funds towards SMEs and intermediate-sized enterprises and bolstering a European venture capital industry based on the regions;










—


suggests that the regional blueprints for innovation should develop into regional blueprints for innovation and industrial development.










Rapporteur:


Claude GEWERC (FR/PES), member of the Picardy Regional Council




Reference document


Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - A stronger European industry for growth and economic recovery
COM(2012) 582 final




I.   POLICY RECOMMENDATIONS

THE COMMITTEE OF THE REGIONS






1.


welcomes the Commission's communication, which clearly emphasises the importance of industry.






General comments








2.


Industry accounts for 80 % of exports and private R&D spending and so continues to be Europe's spearhead where globalisation is concerned. It drives the entire economy, particularly in terms of jobs (employing 35 million people) and of its impact on service activities.










3.


Nonetheless, Europe's production capacity has declined recently, inequalities within the EU have become more entrenched and there has been rising concern about relocation and the competitiveness of European companies.










4.


The European Union was constructed around the European Coal and Steel Community. The current economic and financial crisis has reinforced the idea that the EU's prosperity and sustainability depends on its ability to maintain a solid manufacturing base by promoting a new industrial model – based on innovation and more substantial investment in new technologies - which unites it and reaffirms its place in the global economy. In order to achieve this, Europe - the cradle of the industrial revolution - has the economic, cultural, scientific and political tools needed to renew its industrial sector: a vast market of over 500 million people, a well trained and qualified workforce, the world's second most widely-used currency, strong companies which have established a presence in nearly every sector, a stable political framework, etc.










5.


Industrial policy therefore needs to be one of the pillars of the European venture, treated as a genuine political priority on the same political footing as cohesion, infrastructure and agriculture.










6.


This imperative is increasingly recognised, although it is not always supported by the Member States, as is borne out by the disproportionate cuts proposed by the European Council in the negotiations on the next Multiannual Financial Framework in sectors that are particularly important for industry, such as research and innovation (Horizon 2020) and trans-European infrastructure (Connecting Europe Facility).










7.


Believes that the European Commission must harness all the potential of the Lisbon Treaty in the area of industrial policy pursuant to Article 173 TFEU, particularly by opting to ‘take any useful initiative to promote … coordination (of Member States in the area of industrial policy), in particular initiatives aiming at the establishment of guidelines and indicators, the organisation of exchange of best practice, and the preparation of the necessary elements for periodic monitoring and evaluation’.










8.


Therefore supports the European Parliament's proposal to set up a steering group in order to bring together European, national, and regional and local powers and the resources currently scattered across all levels and sectors.










9.


This Commission has identified six priority action lines designed to strengthen industry so that it can make up 20 % of Europe's GDP: advanced manufacturing technologies, key enabling technologies, bio-based products, sustainable industrial and construction policy and raw materials, clean vehicles and smart grids. The communication is organised around four strands.






The Committee of the Regions:








10.


Shares the view that industry has become an urgent priority, which is why the Commission has drawn up short-term proposals to accompany the medium- and long-term proposals.










11.


Nonetheless notes that the problems besetting industry in many Member States are structural in nature; in order to address these root causes, industrial policy's design, governance and financing need to be overhauled completely and rapidly, and adequate institutional and financial resources allocated.










12.


Agrees that the creation of a business-friendly environment and investment in businesses as well as in their ecosystem are crucial in order to boost competitiveness and guarantee lasting growth. The main challenge for the competitiveness of European businesses lies in increasing productivity through effective sustainable management of resources, particularly human resources, by means of lifelong learning, innovation, internationalisation and sharing responsibilities and profits with workers rather than focusing solely on the cost of labour.










13.


Like the Commission, observes the impact of the financial crisis on the financing of the real economy, but notes that a set of measures cannot remedy a systemic imbalance.










14.


Would highlight the role of skills in developing and modernising European industry.










15.


Underscores the urgent need for action as regards the human, social and territorial dimensions of industrial change.










16.


Notes that the growth of the single market has not yet resulted in a stronger industrial base for the EU, and is astonished that currency parity is not included among the conditions for market access.










17.


Agrees that entrepreneurship needs to be encouraged, but points out that it is equally important to promote and recognise industrial professions.










18.


Calls on the Commission to enhance its powers of analysis and its support measures for businesses, by looking into the possibility of creating, as it has agreed for the agri-food industry, a new category of mid-sized enterprise somewhere between SMEs and large enterprises, employing between 250 and 750 workers and with a turnover of under EUR 200 million. This category could receive appropriate rates of aid, higher than those for large enterprises and lower than those for SMEs.










19.


Regrets that there is only a passing reference to the territorial dimension of industrial policy, when it is precisely at this level that Europeans live their lives, that new ways of life are invented, that infrastructure and trade platforms are put to use, that networks and cooperation groups are formed, and that people-to-people contacts build trust.










20.


Supports the pillars of a stronger industrial policy: investment in innovation, better conditions for access to the market and to capital, human capital and skills.




A.   FACILITATING INVESTMENT IN NEW TECHNOLOGIES AND INNOVATION







21.


Many local and regional authorities have already placed economic, social and environmental innovation at the centre of their development strategies: they have the networks and the experience to develop the innovation ecosystems which SMEs need to thrive.










22.


Advanced technologies for clean industry, such as sustainable raw materials, are naturally tied to an approach centred on industrial ecology, which favours recycling materials and controlling energy use.










23.


The sustainable construction and raw materials sector is also very localised as a demonstrator and in terms of earmarking public investment.










24.


Electric and hybrid vehicles can have a future, not least as part of a new approach to mobility: a new form of intermodality centred on train stations in particular. Beyond this, other ways of using electric vehicles are also worth considering, particularly in terms of new solutions for transport in cities, including peri-urban areas.










25.


This is one topic where a sectoral and a cohesion-based approach could come together: a close relationship between sustainable land use and industrial development.










26.


Calls on the Commission to bring forward the date of publication of the European Action Plan for the steel sector, currently scheduled for June 2013.










27.


Whether for the digital economy or responses to an ageing population, the regions are natural testbeds, where public and private initiatives come together.










28.


In all of these fields, Europe's strength is based in its culture of ‘living together’ and complexity. Globally, this will be a key aspect of economic development in the future.






The Committee of the Regions:








29.


Supports the strategy of localised smart specialisation proposed by the Commission, while highlighting the fact that it relates to all industrial sectors and must support change in those sectors throughout the European Union.










30.


Stresses the need to promote the development of projects involving public and private partners at regional level, enabling them to make a useful contribution to the EU's major strategic choices.










31.


Points out that this process must be based on EU-wide cooperation, working towards a Europe of innovation based on the regions.










32.


Reiterates its proposal for territorial pacts to organise the levels of cooperation involved in the project. Proposes that this process be covered by a single programming document, ensuring that at the regional level, national and local policies reflect EU sectoral and cohesion policies.










33.


Calls for investments linked to these single programming documents to be included within a set of loans issued by the European Investment Bank working to create new territorial ecosystems for economic and social innovation. This could be an excellent way to foster innovative solutions, provide demonstrators for companies and promote consortia in areas where companies need to establish new partnerships. These ecosystems would be public/private partnerships and would have to meet the duel objective of making companies more competitive and the public sector more efficient (thus helping to rationalise public spending).




B.   MARKET ACCESS







34.


The Commission has made enhanced access to the market in goods a key lever of industrial policy. Its proposals deal with extending the security, defence and medication markets and with standards, industrial property and developing entrepreneurship.






The Committee of the Regions:








35.


Agrees with the Commission on the importance of drawing up European standards applied by the EU and defended on the global market, so that innovative measures implemented by European companies (for instance with regard to the environment) do not penalise them, but instead are gradually applied by the entire global market. Suggests that the EU should provide itself with the means to negotiate on and ensure compliance with these standards in the area of the environment, industrial safety, prevention of occupational hazards and minimum social and working conditions, so that European products can compete on the globalised market on a level playing field.










36.


On a similar note, must agree with the Commission on the need to redress the fiscal and social disparities which create competition between European regions without driving wealth creation at EU level.










37.


The strategic areas on which the Commission is quite rightly focusing could completely change patterns of consumption such as production management, industry-services divisions and sectors and areas of activity as they are now, and ultimately a form of networked marketing of European industrial output. Readying EU companies for this new state of affairs is therefore a major challenge which is dependent on greater cooperation between them, the creation of consortia and in some cases public-private partnerships. It will be necessary to anticipate and support these initiatives geared towards adapting to new demands for which we will be partly responsible, so as to be active in the internal and global markets. Europe needs market engineering equal to its technological capacity.










38.


This market engineering must be one aspect of regional pooled platforms.




C.   ACCESS TO FINANCING AND CAPITAL MARKETS







39.


Although the situation varies from one Member State to another, debt capital market financing for businesses represents only 7 % of GDP in Europe, against 35 % in the US.










40.


The Commission notes that this is a source of vulnerability that should be remedied through a combination of public-sector support and a set of measures intended to allow easier access to capital markets.






The Committee of the Regions:








41.


Notes the need for a global approach to currency and financing. Forms of industry with longer trade cycles and lower rates of return are not attractive to capital looking for high, short-term returns. Investments made with the intention of quickly achieving high returns risk hampering the company's long-term development.










42.


Therefore calls for the EU to place industrial financing at the centre of its financial and monetary set-up.










43.


Proposes that project bonds be issued to finance SMEs, channelling regional investment funds towards SMEs and intermediate-sized enterprises and bolstering a European venture capital industry based on the regions.










44.


Reiterates its support for the promotion and introduction of ‘citizen bonds’ to foster local industrial development. Citizens' bonds could see EU supported projects benefit from additional finance from individual citizens or other public funds, investing in exchange for a guaranteed and fair return.










45.


Calls on the Commission to work on financial tools fostering cooperation within industry and across the EU.










46.


Reiterates its disapproval of the Commission’s proposal to make regional aid for businesses in the steel and synthetic fibre sectors incompatible in principle with the internal market.










47.


Considers that, given the current economic and social crisis, public investment is essential as part of an overall strategy for growth. Supports in this context overall reform of the state aid regime in order to achieve greater simplicity, transparency and flexibility. The focus of the European Commission's policy on state aid must also be shifted towards a more economics-based approach that takes into account the real level of risk of state aid affecting intra-Community trade and the real distortion of competition in the internal market. This shift goes hand in hand with the need to take greater account of the quality of public spending and, in particular, for European rules on macroeconomic surveillance to include a specific category for public investment in infrastructure and innovation in relation to public administrative expenditure.










48.


Proposes that a sub-category be envisaged within the framework of the Basel II agreements, to force banks to invest in the low-carbon economy, breakthrough technology and socially responsible enterprise.




D.   PEOPLE MUST PLAY THE PIVOTAL ROLE







49.


The Commission points out that priority must be given to job creation and notes that a competitive and effective industrial policy must be based on a dynamic labour market, since professional mobility is a key variable in this process.










50.


It points out that in times of economic slowdown, internal flexibility can be an effective way to keep up employment and reduce adjustment costs.










51.


Lastly, it notes that countries in which the labour market has coped best with the crisis have one feature in common: strong social dialogue. The CoR therefore calls for the social partners to be involved more closely in industrial policy and specifically affirms its support for the European Parliament's proposal for a directive to improve the information and consultation of workers, anticipating and managing restructuring.










52.


proposes investing in skills and vocational training to support structural change and anticipate needs in terms of jobs and skills.






The Committee of the Regions:








53.


Agrees that managing skills is key to the success of industrial change in the EU and a countercyclical policy measure.










54.


Highlights the obstacles that need to be overcome in order to achieve this: young people are not interested in careers in industry, further and vocational education are not managed or developed adequately or in line with new developments, there is no Europe-wide approach or place for debate on industrial prospects and strategy and matters that should be addressed in social and territorial dialogue are handed over to committees of experts.










55.


Asserts that change is not accidental: it is a fundamental part of the industrial transition with which the EU has to cope.










56.


Proposes that forward-looking management of skills and change should be viewed as a crucial component of industrial strategy at every level.










57.


Notes that increasing the number of small and medium-sized enterprises that export to non-EU countries will require an improvement in IT and language skills; urges the Commission to further investigate the deficits of smaller enterprises in the Member States in these areas.










58.


Affirms that the local level has a role to play in coordinating the dynamics of jobs/training and industrial transition.










59.


Reiterates in this context its support for preserving the Globalisation Adjustment Fund in order to improve national and local governments' ability to contain the impact of the crisis and help put active labour market measures in place for workers affected by restructuring. It also believes that the Globalisation Adjustment Fund should go hand in hand with a change adjustment fund to promote the development of skills and industrial transition. Initially, part of the Structural Funds and Horizon 2020 expenditure could be earmarked for change adjustment. It also stresses the need for social players operating in businesses, states and regions to intervene proactively as early as possible before restructuring takes place, in order to prevent it or, at least, to reduce its impact on jobs or adjust the transitions imposed by overcapacity and to make the necessary changes in good time.










60.


Suggests that the European Union should organise local events to get young Europeans interested in industry.




E.   GOVERNANCE



The Committee of the Regions:








61.


Agrees that in the interests of industry, European and national policies need to be better coordinated.










62.


Stresses that social and territorial dialogue needs to be placed at the centre of these dynamics at every level.










63.


Calls for a resource network to be set up for this purpose, in order to fuel democratic debate on the future of industry.










64.


Endorses the involvement of the regions in the roll-out of the smart specialisation strategy.










65.


Suggests that the regional blueprints for innovation should develop into regional blueprints for innovation and industrial development.





Brussels, 11 April 2013.


The President of the Committee of the Regions

Ramón Luis VALCÁRCEL SISO