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European Commission calls for a focus on industry

31 January, 2014

•  Implementing a more business-friendly framework that will help European SMEs to overcome the barriers that limit their growth, such as the fact that EU SMEs tend to be smaller than those in the US and thus find it more difficult to invest in innovation and exporting.

•  Easing access to critical production inputs, such as capital, energy and raw materials. The EC points out that EU industrial electricity prices are twice as high as in the US and Russia, and 20% higher than in China, while EU gas is 3–4 times more expensive than in the US, Russia and India.

•  Maximising the potential of the single internal market which, the EC says, provides EU companies with a large home market, makes productivity improvements easier by cutting costs, fosters the uptake of more efficient business processes, and increases returns on innovation. But it adds that there is potential to further deepen the single market to bring about faster technological change.

• The internationalisation and the integration of EU firms in global value chains to increase their competitiveness and ensure access to global markets under more favourable competitive conditions.

Skills mismatches are likely to remain a key challenge for EU industry in the coming years, the EC reports, especially as progress in manufacturing technologies will increase demand for specific skill sets. The Commission is developing several programmes for entrepreneurs, apprentices and cross-country traineeships.

The EC says that the recent recession – the longest ever in Europe ­ – has underlined the importance of a strong industrial sector for economic resilience. Industry’s role in Europe extends far beyond manufacturing, it adds, ranging from raw materials and energy to business and consumer services.

The Commission believes that the importance of the challenges ahead calls for attention and policy guidance from the European Council.

It also says that the European Investment Bank should play a more strategic role by targeting more lending to innovation and industrial projects. The EU should address the bottlenecks created by the fragmentation of the financial markets and create the conditions for developing alternative sources of financing.

Tajani: urgent re-industrialisation is essential

•  Cecimo, the trade association that represents Europe’s machine tool industry, has welcomed the European Commission’s statement, saying that having concrete targets for manufacturing set at the EC level gives the EU’s industrial policy strategy credibility in the eyes of businesses. But it adds that the industrial upturn is not here yet.

“The next logical step should be to set up an agreement between member states to guide, monitor and benchmark national measures in a more systematic manner against European targets,” suggests Cecimo director-general, Filip Geerts. “Therefore, we fully support the Commission’s call to the European Council to pay more attention to industrial policy and drive it forward.

“Over the last two years,” he adds, “our industry has shown phenomenal export performance outside Europe contributing to industrialization across the globe, but more should be done to ensure the transfer of new production technologies to industrial users in the EU.”

Machine tool sales in Europe were hit badly by the 2008-09 economic meltdown and are still 30% below pre-crisis levels. Some factories have disappeared while others have suspended equipment investments. “More than ever, it is urgent to invest in manufacturing if Europe wants to get serious about achieving re-industrialisation,” Geerts concludes. 

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