Enterprise : a new industrial revolution.
Date: 2014-11-13
Institutions: Directorate-General for Communication
Subjects: dissemination of EU information, economic growth, entrepreneur, entrepreneurship, innovation, joint venture, public awareness campaign

T H E   E U R O P E A N  
U N I O N  
E X P L A I N E D

Enterprise 

A new 
industrial 
revolution

Eu r op e  mu st  r egain   tr us t  in  it s  a b i lity 
t o  in ven t,  to   und er take n e w  ven t ur e s, 
t o  in n ovate  an d  to   gr ow.  Fo r t hi s 
r eas o n,  E uro p e  s ho uld   put   at   the 
c ent r e  o f  th e  s tage  t he  r eal  e co no m y 
and   in du st r y,  its   st re ngt h.

CONTENTS

Why we need industrial policy  
in Europe  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . . 3

How the EU formulates and  
manages industrial policy  .  .  .  .  .  .  .  .  . . 5

What the EU does to support  
small businesses  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . . 8

What the EU does to support  
key industrial sectors  .  .  .  .  .  .  .  .  .  .  .  . 10

The way forward: leading  
the new industrial revolution .  .  .  .  .  . 16

Find out more  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 16

The European Union explained: 
Enterprise

European Commission
Directorate-General for Communication
Citizens information
1049 Brussels
BELGIUM

Manuscript completed in March 2013

Cover and page 2 picture:  
© Dynamic Graphics/Jupiterimages

16 pp. — 21 × 29.7 cm
ISBN 978-92-79-42048-1
doi:10.2775/50575

Luxembourg: Publications Office  
of the European Union, 2014

© European Union, 2014
Reproduction is authorised. For any use or reproduction 
of individual photos, permission must be sought directly 
from the copyright holders.

THE EUROPEAN UNION 
EXPLAINED

This publication is a part of a series that explains  
what the EU does in different policy areas,  
why the EU is involved and what the results are. 

You can find the publications online:
http://europa.eu/pol/index_en.htm
http://europa.eu/!bY34KD

How the EU works
Europe in 12 lessons 
Europe 2020: Europe’s growth strategy
The founding fathers of the EU

Agriculture
Banking and finance 
Borders and security 
Budget
Climate action
Competition
Consumers
Culture and  audiovisual
Customs
Digital agenda 
Economic and monetary union and the euro
Education, training, youth and sport 
Employment and social affairs
Energy
Enlargement
Enterprise
Environment
Fight against fraud
Food safety
Foreign affairs and security policy
Humanitarian aid and civil protection 
Internal market
International cooperation and development
Justice, fundamental rights and equality 
Maritime affairs and fisheries 
Migration and asylum
Public health
Regional policy
Research and innovation
Taxation
Trade
Transport

3

Why we need industrial policy in Europe

Europe’s recovery from the economic crisis has been 
relatively slow and fragile. From the outset, the focus 
has been on improving public finances and 
strengthening Europe’s financial system. While these 
issues remain important, strengthening the real 
economy — industrial companies and other 
entrepreneurs delivering concrete goods and services 
— is ultimately the key to economic recovery. 
Moreover, with globalisation and intensifying 
competition from emerging countries, Europe’s  
long-term economic prosperity will depend on the 
strength of our industrial base; our economy cannot be 
based on services and banks alone.

The EU is a global leader in energy efficiency and 
foreign investment, but industrial performance across 
EU countries is not balanced. Fortunately, EU industry is 
a technology leader in many fields and has the 
potential to bring the European economy back to 
growth. This is the goal of Europe's industrial policy.

Europe 2020 and industrial policy

Along with the need to create new jobs and boost our 
competitiveness, we face an ageing population in 
Europe whilst the world population is growing, 
increasing pressure on raw materials and energy 
supplies, and the need to counter climate change, 
preserve ecosystems and effect a transition to a 
low-carbon economy. The answer to all these challenges 
lies in a range of new technologies, amounting to as 
much as a new industrial revolution.

Achieving a new industrial revolution is a key objective 
of Europe 2020, the EU’s strategy for smart, 
sustainable and inclusive growth. Two of the Europe 
2020 flagship initiatives are in the industrial sector:

•  ‘An industrial policy for the globalisation era’: to 

improve the business environment, notably for small 
and medium-sized enterprises (SMEs), and to support 
the development of a strong and sustainable 
industrial base, able to compete globally;

Industry is the engine of growth in Europe.

•  ‘Innovation Union’: to improve the business 

environment and access to finance for research and 
innovation, so as to ensure that innovative ideas can 
be turned into products and services that create 
growth and jobs.

The European Commission renewed in 2012 the 
flagship initiative on industrial policy, ‘A stronger 
European industry for growth and economic recovery', 
to focus on how to best harness this new industrial 
revolution. It aims to strengthen industrial innovation 
and the real economy. The initiative involves the EU 
engaging businesses outside the EU in mutually 
beneficial interactions — an important part of EU policy 
to help EU businesses find new markets and improve 
their competitiveness, i.e. their ability to compete 
successfully in global markets.

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ENTERPRISE 
 
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Leadership in the automotive industry is central  
to the EU’s prosperity.

The EU’s industry and innovation 
objectives for 2020
 — to strengthen Europe’s industrial base by 

increasing its competitiveness; 

 — to promote the transition to a low-carbon 

economy; 

 — to foster innovation as a means to generate 
new sources of growth and meet societal 
needs; 

 — to encourage the creation and growth of SMEs 
and promote an entrepreneurial culture; 

 — to ensure an open internal market for goods.

The need for action at EU level

Action at EU level is required to ensure that the single 
market for goods and services remains open and fair. 
The Commission represents European interests 
internationally and ensures that EU companies can 
compete fairly in the global marketplace, by opening up 
markets and further liberalising trade. Moreover, the 
Commission monitors the competitiveness of 40 
industry sectors and EU industry as a whole, and 
publishes its findings in an annual competitiveness 
report and a biannual industry structure report. In order 
to safeguard our future jobs and growth prospects, it is 
of paramount importance that business conditions in 
the EU are further improved, requiring coordinated 
actions at both EU and Member State level.

SMEs and entrepreneurship: the key to 
economic growth

Special attention is given to the needs of small and 
medium-sized enterprises (SMEs). Supporting SMEs and 
promoting entrepreneurship is the key to economic 
recovery. Europe’s 23 million SMEs represent 98 % of 
businesses, provide 67 % of jobs and create 85 % of all 
new jobs. A range of support instruments is deployed to 
help such companies deal with administrative and 
regulatory requirements and formalities, and to support 
their cross-border activities, access to finance and other 
business opportunities.

SMEs HOLD THE KEY TO ECONOMIC GROWTH

Number of enterprises (’000s)

Medium
219

Small
1 378

Large
43

Micro
19 199

The vast majority of small 
businesses are 
microenterprises that 
employ fewer than 
10 persons and whose 
annual turnover and/or 
annual balance sheet 
total does not exceed 
€2 million.

Persons employed (millions)

Large
43.3

Micro
38.9

Employment is evenly 
distributed across enterprises, 
although SMEs account 
for two thirds of all jobs 
in the EU.

Medium
22.0

Small
26.6

Value added (€ billion)

Large
2 486

Micro
1 293

SMEs account for more than 
half of the value created 
in the EU economy.

Small
1 132

Medium
1 067

Source: European Commission

THE EUROPEAN UNION EXPLAINED 
 
 
How the EU formulates  
and manages industrial policy

5

A strong, competitive and diversified industrial 
manufacturing value chain is vital for economic well-
being in Europe. The manufacturing industry and its 
associated business services account for more than 
50 % of private sector employment, 75 % of exports 
and 80 % of private research and development in the 
EU. Moreover, EU enterprises are increasingly integrated 
within global value chains. Maximising the domestic 
content of exports, therefore, can be regarded as an 
important driver of industrial competitiveness. Around 
87 % of the value of EU exports is domestically 
produced, according to 2009 figures. Industrial policy 
includes actions to support innovation, to foster the 
internationalisation of companies and to strengthen  
the single market for products and services.

EU action to support innovation

The European Commission formulates, influences and, 
where appropriate, implements policies and programmes 
to increase Europe’s innovativeness, including:

•  the Innovation Union Scoreboard, which provides a 

comparative assessment of the 27 EU Member 
States’ innovation performance and their research 
and innovation systems;

•  the Social Innovation Europe network, which 

encourages new ideas that simultaneously meet 
social needs and create new social relationships or 
collaborations;

•  the European Design Leadership Board, which 
advises on the wider use of intelligent design to 
develop high value products and improve resource 
efficiency;

•  the Regional Innovation Monitor (RIM), which 

provides information on regional innovation policies 
for 20 EU Member States;

•  eco-innovation in areas such as waste management, 
recycling and renewable energy, which employs some 
3.4 million people in Europe and generates €227 
billion in turnover. Among other initiatives, to promote 
industrial and consumer products based on 
renewable, biological raw materials such as plants 
and trees, the Commission has formed an ad hoc 
advisory group on bio-based products .

In addition, the Commission handles several support 
programmes for cooperative research and innovation, 
which are providing clear added value to the innovation 
cycle in the EU, to businesses and scientists. The 
seventh framework programme for research and 
development (FP7), with a total budget of over €50 
billion, and the competitiveness and innovation 
framework programme (CIP) are currently being 
implemented. As of 2014, Horizon 2020 will represent 
the follow-up programme of FP7, focusing on research 
and innovation.

Facilitating the internationalisation of 
EU companies

To ensure that EU companies can compete fairly in the 
global marketplace, the Commission enhances market 
access and monitors and promotes an international 
trading system based on multilateral and bilateral 
trade. For example, the notification procedure under the 
World Trade Organisation (WTO) agreement on technical 
barriers to trade allows the Commission to monitor 
suggested drafts on requirements for products 
proposed by trading partners and to intervene if they 
create unjustified trade obstacles.

INTERNATIONAL COOPERATION
The Commission cooperates with governments to 
improve the environment for business, reduce barriers 
to trade and investment and promote common 
regulations for products. Under the European 
neighbourhood policy (ENP), the Commission strives to 
strengthen economic relations with countries at its 
periphery. It negotiates agreements on conformity 
assessments that facilitate the free movement of 
industrial products by aligning EU and non-EU partners’ 
technical regulations and standards.

Technical regulation has an important impact on market 
access for goods exported outside the EU. The EU 
promotes regulatory cooperation with its important 
external trade partners, in order to harmonise or ensure 
the compatibility of technical regulations or mutually 
recognise test results and conformity assessments, all 
facilitating exports.

ENTERPRISE6

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The single market for goods is a major driver  
of wealth in the EU.

LISTENING TO STAKEHOLDERS AT THE 
INTERNATIONAL LEVEL
To advise on major trading partnerships, the 
Commission has established links with industrial 
federations, as well as with specific bodies such as the 
Trans-Atlantic Business Dialogue, the Trans-Atlantic 
Consumer Dialogue, the EU–Japan Business Round 
Table and the EU–Russia Industrialists’ Round Table.

PROMOTING THE INTERNATIONAL ACTIVITIES OF 
SMEs
In a globalised world, SMEs increasingly need to be able 
to compete with companies from developed and 
emerging economies. Moreover, there is a link between 
internationalisation and SME growth. The Commission 
‘Small business, big world’ strategy aims to inject new 
dynamism into the European economy by helping SMEs 
to expand their business outside the EU.

INTELLECTUAL PROPERTY RIGHTS
In addition to EU legislation on intellectual property 
rights (IPR), the Commission helps to make European 
businesses aware of IPR and to assess the impact and 
effectiveness of their use. A helpdesk has also been 
created to inform SMEs about IPR issues in non-EU 
countries such as China. Personalised advice is given on 
a confidential basis.

The single market for goods

The single or internal market for goods is one of the 
EU’s most important priorities. It provides a level playing 
field for business, stimulates competition and increases 
transparency for consumers. By making it possible to 
easily buy and sell products anywhere within the EU, it 
also increases efficiency and drives economic growth.
The principle of the free movement of goods is 
enshrined in the EU treaties to prevent unjustified 
restrictions on trade between EU countries.

SAFEGUARDING THE SINGLE MARKET: THE ROLE OF 
THE COMMISSION
The main objective of the Commission is to make the 
single market work better by removing existing barriers 
to trade and preventing the creation of new ones. It 
ensures a level playing field and that national 
regulations provide the information and legal clarity 
needed by businesses. The Commission may initiate 
legal proceedings against any EU country that has 
adopted or maintained rules or administrative practices 
that violate EU law, or may decide to propose EU-wide 
harmonisation of these rules. Preventing obstacles to 
trade is particularly important for SMEs as they often 
offer highly specialised products for different market 
niches. 

ENSURING SAFER PRODUCTS
The single market for products is shaped by harmonised 
rules to enable their sale and purchase anywhere in the 
EU. European rules focus mainly on product safety and 
often require product testing to ensure reliability. The 
CE mark, for example, is a label that indicates a 
product’s compliance with EU legislation. It is 
mandatory for products such as medical devices, 
electronics and toys. European product liability 
legislation protects consumers from defective products, 
giving them the possibility to claim compensation in the 
case of damages.

THE EUROPEAN UNION EXPLAINED 
 
7

Preventing obstacles to trade in the 
single market before they arise

In some cases, national regulations can make it difficult 
for enterprises to sell their products in other Member 
States. A notification procedure under EU law 
therefore obliges Member States to inform the 
European Commission and other Member States about 
their draft technical regulations on products before they 
become law. During a 3-month ‘standstill period’, 
Member States and the Commission have the time to 
make sure proposed regulations will not create barriers 
to trade. Since 1984, more than 12 000 draft 
regulations have been examined in order to make sure 
they do not obstruct the internal market.

The benefits of standards

Mobile phone or software companies battle daily for the 
leadership of their respective standards, confirming how 
important standards are in international competition. 
There is no doubt that a good standard can ease 
consumers’ lives, promote sustainability and enhance 
European technological leadership in global markets. 
Standards are sets of technical and quality criteria for 
products, services and production processes. 
Compliance with them is voluntary, but they offer many 
benefits. They help businesses work together, ease 
consumers’ lives and save consumers' money.

In the EU, common standards are drawn up by the 
European standardisation organisations (ESOs) and are 
important for the single market. European standards 
replace national and often conflicting standards which 
may create technical impediments to market access.  
The European Commission regularly gives mandates to 
the ESOs to develop new standards.

It has frequently taken several years to develop a 
European standard, however, and some standards have 
lagged too far behind rapidly evolving technologies. 
Furthermore, certain sectors have been reluctant to 
engage in standardisation.

The Commission pushes for more international 
standards for worldwide use in economic sectors where 
Europe is a global leader. It will continue to promote the 
convergence to international standards and the use of 
voluntary standards in regulation. The Commission also 
pushes for the faster adoption of standards with the 
help of consumers, small businesses and environmental 
and social organisations.

Smarter regulation
While the existing regulatory framework supports 
the smooth functioning of the single market, the 
Commission recognises the need to continuously 
improve regulation. The smarter internal market 
rules aim to:
 — evaluate more systematically the benefits and 
costs of existing legislation (‘fitness check’);

 — improve stakeholder consultations;
 — improve the quality of impact assessments;
 — simplify EU legislation and reduce 

administrative burdens; and

 — improve the integration of EU legislation into 
national laws, as well as its implementation 
and enforcement.

CHECK OF NEW RULES PER INDUSTRY SECTOR

2 085

1 876

1 482 1 524

1 599

2 500

2 250

2 000

1 750

1 500

1 250

1 000

750

500

250

0

712

626

515

401

438

255

258

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Source: European Commission

The EU’s notification procedure has helped to reduce barriers 
to trade. EU countries have to notify the European Commission 
when they make new rules for products. Some 12 000 draft 
regulations have been checked since 1984 to ensure they 
adhere to single market rules.

ENTERPRISE 
 
 
 
 
 
 
 
 
8

What the EU does to support small 
businesses

With SMEs representing 98 % of businesses and 67 % 
of jobs, they are a key driver for economic growth, 
innovation, employment and social integration in the EU. 
The European Commission therefore promotes 
successful entrepreneurship and improves the business 
environment for SMEs.

Small Business Act

The Small Business Act is the EU’s policy for SMEs. At 
the heart of the Small Business Act is the ‘Think small 
first’ principle . It places SMEs at the forefront of 
policymaking and helps ensure that legislation does not 
add to the burdens they face. Therefore, a compulsory 
‘SME test’ is applied to check whether new EU policies 
and laws will have an impact on SMEs. A network of 
Member State SME envoys was inaugurated in May 
2011 to ensure that policies at the national, regional 
and local levels are SME-friendly. 

By mid-2012, more than 175 000 SMEs had benefited 
from the financial instruments of the competitiveness 
and innovation framework programme (CIP). In 2008–11, 
the European Investment Bank provided around €40 
billion worth of loans, which benefited more than 
210 000 SMEs. As of 2014, the ‘Competitiveness of 
enterprises and small and medium-sized enterprises’ 
(COSME) programme will provide further support to 
SMEs.

Doing business outside the EU: ‘Missions 
for growth’

In a globalised world, SMEs increasingly need to be able 
to compete with companies from developed and 
emerging economies. Moreover, there is a link between 
internationalisation and SME growth. The Commission 
‘Small business, big world’ strategy aims to inject new 
dynamism into the European economy by helping SMEs 
to expand their business outside the EU.

Facilitating SME’s access to finance

Facilitating SME’s access to finance is also a major 
priority. Europe provides a balanced mix of financing to 
SMEs — through the Structural Funds, the research and 
innovation programmes and Progress Microfinance, as 
well as lending from the European Investment Bank .  

The Commission supports SME internationalisation by 
organising a series of ‘Missions for growth’. Such 
initiatives aim at facilitating agreements between 
businesses and the organisation of matchmaking 
events between the European Cluster Collaboration 
Platform and partner organisations in countries such as 
Japan, Brazil, India and Tunisia.

WHAT ARE THE BARRIERS TO BECOMING AN ENTREPRENEUR IN THE EU?

Replies in an opinion poll in the 27 EU countries to the question: Do you strongly agree, agree, disagree or strongly disagree with the following opinion?

It is diﬃcult to start one’s
own business due
to a lack of available ﬁnancial support.

It is diﬃcult to start one’s
own business due to the complex
administrative procedures.

It is diﬃcult to obtain suﬃcient information
on how to start a business.

People who have started their own business and
have failed should be given a second chance.

One should not start
a business if there is a risk it might fail.

35

29

17

28

19

46

10

2

7

42

53

34

31

16

4

9

9

12

10

3

7

13

5

29

33

Strongly agree 

Agree 

Disagree 

Strongly disagree 

Don't know/Not applicable

Source: Flash Eurobarometer 283

The biggest obstacles to starting a business in Europe are a 
lack of financing and complex administrative procedures.

Are EU SMEs recovering? 

THE EUROPEAN UNION EXPLAINED 
9

The Commission also created the Enterprise Europe 
Network — the business and innovation support 
network for SMEs — in Europe and extended it to Asia, 
north Africa and the Americas. The network helps SMEs 
understand EU legislation and provides support 
programmes and internationalisation services in 54 
countries through 600 regional partners. It helps SMEs 
to secure financing and provides business and 
technology reviews as well as IPR advisory services.

Encouraging entrepreneurship — Europe 
needs more entrepreneurs

EU policy focuses on encouraging entrepreneurs. 
Although, at present, only 10 % of European citizens 
are entrepreneurs, 45 % would like to be their own 
boss. To unlock this enormous potential for jobs and 
growth the Commission has created a series of 
initiatives.

•  Clusters and business networks: Clusters are groups 
of specialised enterprises and other supporting actors 
in a particular location that cooperate closely 
together, such as organisations, regional initiatives 
and other business networks. An example is the 
‘aerospace valley’ cluster based in Toulouse, France, 
which is mainly known for the design, development 

and production of the Airbus. They play a catalytic 
role in the emergence of new industries. The EU is 
engaged in several activities to raise the standards 
and openness of clusters, notably through the 
European Cluster Collaboration Platform, the 
European Cluster Excellence Initiative and the 
European Service Innovation Centre.

•  Entrepreneurship education: Entrepreneurship 

education is increasingly being promoted in most 
European countries. As further stimulation, the 
Commission has launched the European SME Week, a 
campaign to promote entrepreneurship across Europe 
and to inform entrepreneurs about available support. 
Another concrete initiative is ‘Erasmus for young 
entrepreneurs’, an exchange programme that gives 
entrepreneurs the chance to learn from experienced 
owners of small businesses in other EU countries.

•  More female entrepreneurs: While Europe does not 

have enough entrepreneurs in general, there are even 
fewer female entrepreneurs; in 2012, only 30 % of 
entrepreneurs in Europe were women. To encourage 
more entrepreneurship among women, the 
Commission has set up the European Network of 
Female Entrepreneurship Ambassadors. The 270 
entrepreneurs of this group serve as role models to 
inspire other women to become entrepreneurs.

Women are a source of untapped  
entrepreneurial potential in Europe.

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ENTERPRISE 
 
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What the EU does to support  
key industrial sectors

Innovation: driver of growth and 
employment

Raw materials: the lifeblood of 
European industry

The EU provides direct financial support to innovators 
such as enterprises and research institutes through 
funding programmes: the competitiveness and 
innovation framework programme (CIP), which will soon 
be replaced by the COSME programme, and the 
European Structural Funds operational programmes.

Innovation requires interaction and cooperation between 
multiple players: innovators, enterprises, research 
centres, innovation and development agencies, 
technology transfer offices, education and training 
institutes, investors, etc. The EU fosters these 
interactions within regions and cluster initiatives.

To encourage mutual learning and cooperation among 
EU Member States and regions, the Commission 
sponsors initiatives such as the Europe Innova project to 
develop and test new tools and instruments to support 
innovation and PRO INNO Europe, an initiative which 
aims to learn from best practices and contribute to the 
development of new and better innovation policies.

Key enabling technologies
The driving force behind economic and technological 
development is key enabling technologies (KETs) 
such as nanotechnology, micro- and nanoelectronics 
including semiconductors, advanced materials, 
biotechnology and photonics. The European 
Commission has a strategy to boost the industrial 
production of KETs-based products in Europe. The 
aim is to ensure that Europe keeps pace with its 
main international competitors, to restore growth in 
Europe and to create jobs in industry, while at the 
same time addressing today’s societal challenges. 

Turnover of €1 324 billion and 30 million jobs depend 
on continued access to raw materials. They are the 
lifeblood of European industry. In addition, they are vital 
for the development of modern, environment-friendly 
technologies such as electric cars and photovoltaic cells.

The European Commission pursues an approach based 
on three pillars: ensuring a fair and sustainable supply 
of raw materials from international markets; fostering 
sustainable supply within the EU; and boosting resource 
efficiency and promoting recycling.

ARE EUROPEANS INNOVATIVE?

United States

Japan

South Korea

European Union

Canada

Australia

Russia

China

India

Brazil

South Africa

0.0

0.2

0.4

0.6

0.8

Source: European Commission

Index for a 5-year period of different indicators showing  
how innovative the countries are. Indicators include, for 
example, the level of research, education, new patents, 
number of innovative SMEs and more. A higher index  
indicates more innovation.

THE EUROPEAN UNION EXPLAINED11

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Innovation: the source of growth and employment.

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In addition, new technologies will help to extract deeper 
deposits, in more remote areas and under harsh 
conditions. The Commission supports targeted 
innovation and research efforts, breakthrough 
technologies and multidisciplinary approaches, as well 
as demand-side interventions (e.g. through standards, 
public procurement and regulatory measures).

For example, the European Innovation Partnership on 
raw materials brings together capital and human 
resources in an effort to improve the exploration, 
extraction and processing of raw materials in Europe. 
An example of such a partnership is the letter of intent 
between the EU and Greenland on the exploration and 
exploitation of raw materials.

The EU’s strategic needs and Greenland’s 
raw materials potential 
Greenland has: 
 — significant potential for six of the 14 elements 

on the EU critical raw materials list (niobium, 
platinum group metals, rare earths and 
tantalum) and moderate potential for three 
elements;

 — a high degree of potential in rare earth element 

deposits (REE); 

 — a share of 3.4–9.2 % (c. 4.89–12 million 

tonnes) in global REE resources.

ENTERPRISE 
 
 
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Access to raw materials and other rare earths is essential for 
the continued success of European industry.

The world’s most ambitious chemicals 
regulations

The chemicals, plastics and rubber industries are among 
the largest and the most dynamic industrial sectors in 
the EU. Together they generate about 3.2 million jobs in 
more than 60 000 companies and account for about 
30 % of global chemical sales. 

Since 2007, REACH legislation has dealt with the 
‘registration, evaluation, authorisation and restriction’ of 
chemicals. Under REACH, manufacturers and importers 
of chemicals must assess and manage the risks posed 
by specific chemicals and provide appropriate safety 
information to users.

Its classification system identifies chemicals that are 
dangerous for health and the environment and 
determines the information on the labels of chemicals 
that workers and consumers use. Since 2011, new 
legislation on the classification, labelling and packaging 
of chemicals (CLP) has aligned the EU classification 
system with the UN globally harmonised system, 
thereby ensuring that the same hazards are described 
and labelled in the same way all around the world.

The European Chemicals Agency (ECHA), established in 
June 2007, is responsible for managing the REACH and 
CLP legislation and for providing scientific advice on 
issues related to the safety and socioeconomic aspects 
of the use of chemicals.

The chemicals industry plays a pivotal role in providing 
innovative materials and technological solutions that 
have an impact on Europe’s overall industrial 
competitiveness. The EU, therefore, tries to foster the 
international competitiveness of the chemicals industry 
and to make it more sustainable. 

Space: making our modern world 
possible

From telecommunications to television, and from 
weather forecasting to global financial systems,  
most of the key services that we take for granted in  
the modern world depend on space technologies. 
Moreover, space can provide the tools to address  
many global challenges. Europe, therefore, needs an 
effective space policy, as well as space research and  

THE EUROPEAN UNION EXPLAINED 
 
 
a space programme that will allow the EU to match 
global leaders in strategic areas in this highly 
competitive market.

Europe exports first-class space systems for 
commercial and scientific purposes. The EU recognises 
that to maintain Europe’s position, the space industry 
requires a sustained level of research in new 
technologies and their exploitation.

GALILEO: A EUROPEAN-CONTROLLED GLOBAL 
SATELLITE NAVIGATION SYSTEM
Galileo is the EU’s global satellite navigation system 
under European civilian control. It will allow users to 
know their exact position in time and space, just like 
GPS, but with greater precision and reliability.

An estimated 6–7 % of Europe’s GDP, or €800 billion, is 
already used for satellite navigation applications. 
Moreover, the global market for global navigation 
satellite products and services is currently valued at 
€124 billion per year and is expected to grow to €244 
billion by 2020. Galileo’s overall economic impact will 
be around €90 billion over the next 20 years. Several 
Galileo satellites have already been launched, and the 
system is expected to become fully operational in 2014.

European satellite navigation has already made 
aeroplane landing safer and helped reduce flight delays, 
diversions and cancellations. Satellite navigation 
positioning has constantly improved since 2009 and 
information derived from this technology can now be 
received on your PC, even when you cannot receive a 
satellite signal. In 2012, an improved navigation overlay 
service was introduced to increase satellite navigation 
accuracy and support dependent applications requiring 
a high degree of precision, correcting errors caused by 
atmospheric disturbance factors.

GMES: OBSERVING OUR PLANET FOR A  
SAFER WORLD
Managing natural resources and biodiversity, observing 
the state of the oceans, monitoring the chemical 
composition of our atmosphere: to be able to make a 
difference in these ways, accurate information, 
delivered on a timely basis, is required. The European 
initiative for the Global Monitoring for Environment and 
Security (GMES) provides data to help deal with issues 
ranging from climate change to border surveillance. 
Thanks to its rapid monitoring and mapping capacity, 
GMES can also support worldwide aid relief when 
natural disasters, industrial accidents or humanitarian 
crises occur. According to the OECD, the global market 

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Europe’s Galileo global satellite navigation system  
will support a multitude of valuable applications.

for earth observation data could rise to USD 3 billion 
per year by 2017. GMES is expected to create benefits 
worth up to 10 times its initial investment cost.

Security research to safeguard our 
society

The goal of security research is to make Europe more 
secure and resilient for its citizens. The EU is investing 
resources to better protect our infrastructures and to 
strengthen our security industry.

Cars: fostering Europe’s leadership

As the world leader in car manufacturing, the European 
automotive industry is central to the EU’s prosperity. 
The industry is a huge employer of skilled labour, a key 
driver of knowledge and innovation, a net exporter, a 
major contributor to the EU’s GDP and Europe’s largest 
private investor in research and development.

ENTERPRISE 
 
14

Technical harmonisation is a key factor in strengthening 
the competitiveness of the European automotive 
industry as it simplifies market access and reduces the 
cost of doing business. Within the EU, manufacturers 
can obtain approval for a vehicle type in one Member 
State and then market it EU-wide without further tests. 
The Commission is working to achieve similar technical 
harmonisation on a global level via the United Nations 
Economic Commission for Europe (UNECE).

The Commission focuses on the following priorities:

(1)  promoting investment in advanced technologies 

The European Commission’s work on motor vehicle 
safety covers the safety of all road users. Recent 
legislation introduced standard safety features such as 
electronic stability control systems on all motor 
vehicles, advanced emergency braking systems and 
lane departure warning systems on heavy-duty vehicles. 
Cars must now be fitted with brake assist systems to 
help prevent collisions with pedestrians or cyclists and 
ensure that unavoidable collisions occur at far lower 
speeds. New legislation for mopeds and motorcycles 
also proposes the standard fitting of advanced brake 
systems to protect drivers.

and innovation for clean vehicles by undertaking a 
comprehensive package of measures that tackle 
CO2, pollutant and noise emission reduction;

The Commission has proposed simpler car registration 
rules that would reduce the procedures for re-
registering a car in another EU country to a minimum.

(2)  improving market conditions by strengthening the 
single market through an improved type-approval 
system and the streamlining of financial incentives 
for clean vehicles, as well as through the consistent 
application of smart regulation principles;

(3)  supporting industry in addressing global markets 
through the conclusion of balanced trade deals, the 
promotion and continuation of bilateral dialogues 
with major third markets, and intensified work on 
the international harmonisation of vehicle 
regulations.

To support the single market, the EU harmonises  
the technical aspects of cars.

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Tourism: a key sector

The EU tourism industry directly generates more than 
5 % of the EU’s GDP, with about 1.8 million businesses 
employing around 5.2 % of the total labour force 
(approximately 9.7 million jobs). When related sectors 
are taken into account, tourism indirectly generates 
about 12 % of employment.

The EU’s goal is to maintain Europe as the world’s top 
tourist destination by promoting diversification and 
quality. Innovation and sustainability are key, especially 
for SMEs.

The EU’s Calypso programme facilitates low season 
intra-EU holiday exchanges for certain target groups 
(e.g. for seniors, a group representing a large potential 
market).

15

‘Crossroads of Europe’ is an annual event focusing on 
cultural tourism and highlighting places and routes in 
Europe associated with the meeting of different 
cultures. The aim is to stimulate a new kind of tourism.

‘European destinations of excellence’ (EDEN) promotes 
non-traditional and sustainable tourist destinations. It 
involves national competitions to select ‘destinations of 
excellence’ according to a different theme each year.

The Commission has established an innovative 
collaboration between South America and Europe called 
the ‘50 000 tourists’ initiative, promoting travel during 
low seasons, utilising spare airline capacity and 
hotel accommodation.

To emphasise the quality of European tourism and to 
help tourists to compare destinations, the European 
Commission proposes a single European tourism quality 
label to approve existing labels based on common 
criteria.

Tourism indirectly generates more than 10 % of the EU’s GDP. 
Europe needs to maintain its position as the world’s top tourist 
destination in the fast-changing global economy.

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The way forward: leading the new industrial 
revolution

Industry plays an important role in fostering sustainable 
growth, creating high-value jobs and solving the 
societal challenges that we face. In the 21st century, 
the role of industry has declined in Europe. To reverse 
this declining role is a challenge. The EU aims to boost 
the contribution of industry to growth from its current 
level of 15.6 % of EU GDP to as much as 20 % by 
2020. Therefore the Commission proposes a number of 
priority actions to stimulate investment in new 
technologies, to improve the business environment, to 
ease access to markets and to finance, particularly for 
SMEs, and to ensure that workers have the skills that 
industry needs.

Europe’s industry is well placed to assume this role: 
Europe is a world leader in many strategic sectors such 
as the automotive, aeronautics, engineering, space, 
chemicals and pharmaceuticals industries. Industry still 
accounts for four fifths of Europe’s exports and 80 % of 
both Europe’s exports and of private sector R & D 
investment comes from manufacturing. If confidence is 
regained, and with it new investments are made, 
Europe’s industry can perform better and start growing 
again.

Making the revolution happen

To make the new industrial revolution happen, the EU is 
focusing on boosting the EU’s industrial sector, as well 
as on improving access to finance, supporting SMEs and 
empowering consumers.

IMPROVING ACCESS TO FINANCE AND SUPPORTING 
SMEs
Businesses in the EU are facing a credit crunch that is 
likely to worsen as banks restructure and eliminate bad 
assets from their balance sheets. The Commission is 
therefore exploring new ways to improve financing 
conditions, especially for SMEs. New financing will be 
available from the European Investment Bank (EIB) . In 
addition, for the period 2014–20, the Commission has 
proposed to provide €1.4 billion in debt and equity 
instruments to support SMEs, under the COSME 
programme.

EMPOWERING CONSUMERS TO SPUR ON INDUSTRIAL 
INNOVATION
Consumers could also spur on industrial innovation. If 
coach operators, for example, ask vehicle 
manufacturers to fit the roofs of buses with solar 
panels, industry could produce such coaches on a larger 
scale and at a lower price.

Find out more

 X For an overview of EU industrial policy:  http://ec.europa.eu/enterprise/index_en.htm
 X Europe 2020 — The EU’s growth strategy: http://ec.europa.eu/europe2020/index_en.htm
 X EU finance for SMEs: http://www.access2finance.eu/
 X The Enterprise Europe Network: http://portal.enterprise-europe-network.ec.europa.eu/
 X The European Space Agency: http://www.esa.int/esaCP/index.html 
 X The European Chemicals Agency:  http://echa.europa.eu/
 X Questions about the European Union? Europe Direct can help: 00 800 6 7 8 9 10 11 

http://europedirect.europa.eu

ISBN 978-92-79-42048-1
doi:10.2775/50575

THE EUROPEAN UNION EXPLAINED