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THE INTERNAL POLICIES OF

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Title: THE INTERNAL POLICIES OF


1
  • THE INTERNAL POLICIES OF
  • THE EUROPEAN UNION
  • Industrial Policy in the EU
  • Prof. D-r Jovan Pejkovski

2
  • The European Commission's Enterprise policy aims
    at creating a favourable environment for
    enterprises and business in Europe, thus creating
    productivity growth and the job and wealth
    necessary to achieve the objectives set by the
    European Council in Lisbon in March 2000

3
  • A Report from the High Level Group chaired by Wim
    Kok, "Facing the Challenge" (November 2004),
    assessed the current situation and identified
    measures which could form a consistent strategy
    for the European economies to achieve the Lisbon
    objectives and targets
  • reducing the total administrative burden
  • improving the quality of legislation
  • facilitating the rapid start-up of new
    enterprises and
  • creating an environment more supportive to
    businesses.

4
  • The legal basis for the Commission activities in
    this field is article 157 of the Treaty, which
    calls on the Community and  Member States to
    "ensure that the conditions necessary for the
    competitiveness of the Community industry exist"
    and to encourage entrepreneurial initiative and
    enterprise (particularly SMEs) growth.

5
  • Enterprise policy comprises a number of policy
    actions related to
  • Industrial policy,  
  • Framework conditions favourable to SMEs,  
  • Multiannual Programme for Enterprise and
    Entrepreneurship,  
  • Better business environment.

6
  • Industrial policy Manufacturing industry still
    plays a key role in Europe's prosperity and the
    Commission has felt a need to put industry back
    at the heart of policy concerns. It is, however,
    facing many challenges and there is a real
    concern about the risk that the Union is facing a
    process of deindustrialisation. In December 2002,
    a communication on Industrial policy in an
    Enlarged Europe laid the foundations that should
    underpin the Union's industrial policy. In
    October 2005, the Commission has launched a new
    industrial policy to create better framework
    conditions for manufacturing industries in the
    coming years.

7
  • Framework conditions favourable to SMEs The
    European Charter for Small Enterprises calls upon
    Member States and the Commission to take action
    to support and encourage small enterprises in ten
    key areas.
  • Its follow-up has generated a valuable stock of
    good practices which help to improve the small
    business environment throughout Europe.

8
  • In November 2005, the Commission adopted a new
    approach intended to provide a single coherent
    policy framework for EU actions in favour of
    SMEs a new Communication puts particular focus
    on a more systematic consultation and cooperation
    with SME stakeholders to involve them in the
    policy-making process at an early stage, and thus
    benefit from their experience and increase their
    commitment in and ownership of the process. In
    2003 the Commission adopted a package of
    documents outlining policy towards SMEs across
    Europe, the so-called SME package.

9
Multiannual Programme for Enterprise and
Entrepreneurship
  • The Multiannual Programme 2001-2005 (known as the
    "MAP") is an instrument for activities aimed at
    enhancing the growth and competitiveness of
    business, promoting entrepreneurship, simplifying
    and improving the administrative and regulatory
    framework for business, improving the financial
    environment for business, especially SMEs, and
    giving them easier access to Community support
    services, programmes and networks.
  • The MAP supports the Euro Info Centres network,
    the financial instruments and policy development
    and does not provide direct support to
    enterprises.

10
  • From 2007 many MAP activities will be continued
    under the Competitiveness and Innovation
    framework Programme (CIP). In order to ensure the
    continuity of these instruments until the new
    programme, the current MAP legal base has been
    extended until 31st December 2006.
  • Better business environment In 2002, the
    Commission adopted a Communication on a Better
    Environment for Enterprises which launches a new
    instrument in enterprise policy quantitative
    targets.

11
  • Economic theory on industrial policy is not to
    be found in a single and coherent body of work.
    This can be partly explained by the difficulty of
    economists to agree on a definition of the
    concept of industrial policy.
  • However, the last decade has seen a strong
    resurgence of literature in a series of areas
    closely linked to industry such as
  • innovation,
  • economic growth,
  • technological progress,
  • entrepreneurship or
  • public policy.

12
  • European competitiveness is a key policy area in
    the Lisbon strategy.
  • Competitiveness as a macroeconomic concept is
    understood to mean rising standards of living and
    employment opportunities for all who wish to
    work.
  • Securing rising standards of living requires some
    combination of increasing employment and of
    sustained productivity growth.

13
  • Competitiveness the ability of the economy to
    provide its population with high and rising
    standards of living and high rates of employment
    on a sustainable basis is at the very heart of
    the ambitious goals set for the European Union at
    the Lisbon meeting of the European Council in
    spring 2000.

14
  • Achieving this depends on the ability of the
    European Union to maintain and develop the
    competitiveness of its manufacturing industry.
  • Industrys interdependence with services cannot
    be ignored and the progressive outsourcing of
    business services has reduced the apparent scale
    of manufacturing industry.

15
  • Industrial policy concerns the effective and
    coherent implementation of all those policies
    which impinge of the structural adjustment of
    industry with a view to promoting
    competitiveness.
  • The provision of horizontal framework in which
    industry can develop and prosper by remedying
    structural deficiencies and addresing areas where
    the market mechanism alone fails to provide the
    conditions necessary for success is the principal
    means by which the Community applies its
    industrial policy (EU Commission, 1991)

16
  • Three main approaches to industrial policy can
    be identified
  • 1. market-based or negative industrial policy
  • 2. interventionist or positive industrial policy
  • 3. selective intervention or strategic industrial
    policy

17
  • The approach of EU is aimed at creating framework
    conditions for enterprise to improve its
    competitiveness and which would compensate where
    necessary for market failure.
  • Thus the approach has been refined over time, in
    particular to underline the key role of knowledge
    and innovation in a global economy, although the
    basic parameters have remained the same.

18
  • The attention is drown to the slowdown in
    productivity growth in the EU and warned that
    this may jeoparadise the goal set at the Lisbon
    European Council in 2000 of making the EU, by
    2010, the most competitive and dynamic
    knowledge-based economy in the world, capable of
    sustainable growth with more and better jobs and
    greater social cohesion.

19
  • The importance of competitiveness and the
    increased need for synergy among industrial
    policy, RD policy and the single market have
    been further underlined by the decision, taken by
    Heads of State and Governments at the Seville
    European Council, to set up a new Council
    formation that will address all
    competitiveness-related issues.

20
  • As wealth increases, issues such as
    sustainability and safety become ever more
    important to European citizens. This was
    reflected in the adoption, at the Gothenburg
    European
  • Council in 2001, of the EUs sustainable
    development strategy, aiming at the simultaneous
    pursuit of objectives under the three pillars
    economic, social and environmental which
    underpin this strategy. The effective application
    of the strategy requires full coherence between
    the policies of the respective pillars.

21
  • Industrial policy has a key role to play in
    helping the EU meet the Lisbon and
  • Gothenburg objectives. On the eve of an
    enlargement that will bring important changes in
    the industrial landscape of Europe and specific
    problems affecting industry in the new
  • Member States, a review of this policy is timely,
    so as to ensure that the EU has the tools with
    which to respond to the needs of an enlarged
    Europe. This review should contribute to the
    development of synergies between industrial
    policy and the other policies geared towards
    achieving the objectives of the Lisbon strategy.

22
  • Developing the growth potential of the European
    Union must remain central to the objectives of
    industrial policy. It aims at reinforcing the
    Unions ability to achieve higher growth rates
    and to generate high living standards and
    numerous and lasting jobs.
  • In order to reach this objective, the Unions
    industrial basis must be consolidated through
    specific policies. As a matter of fact, a buoyant
    industry generates positive externalities on the
    economy as a whole, increasing the growth
    potential and the vibrancy of the economic
    fabric, fostering innovation and training as a
    result of increased demand for skills.

23
  • In this perspective, industrial policy plays a
    key role by concentrating on strategies, the
    creation of a favourable environment and clear
    support to key investments that can generate
    growth.
  • On the basis of the horizontal approach aimed at
    creating adequate framework conditions, a number
    of priorities should be identified with a view to
    facilitating the development of domains with a
    strong potential.

24
  • This approach must be closely coordinated with
    other EU policies that can also foster or
    accompany the development of the Unions
    industrial base.
  • Enterprises, for their part, will retain the
    prime responsibility for achieving
    competitiveness.
  • They also contribute to EU environmental and
    social priorities, by putting corporate
    responsibility into action on a wider scale.

25
Industry as the source of Europes wealth
  • A vibrant, competitive industry is essential for
    Europe to sustain and increase its prosperity
    while meeting its wider social, environmental and
    international ambitions.
  • In recent years, the structure of production in
    Europe has been experiencing marked changes. The
    share of the services sector in EU output has
    increased from 52 in 1970 to 71 in 2001, while
    that of manufacturing has decreased from 30 to
    18 in the same period.

26
  • As a result of this tertiarisation, policy
    makers attention has not maintained a
    sufficiently strong focus on manufacturing,
    comforted by the widespread, but ironeous,
    assumption that in the knowledge economy and the
    information and service societies.
  • Manufacturing industry no longer plays a key
    role.

27
  • This statistical trend reflects the impact of
    two forces
  • first, high productivity growth in the
    manufacturing sector relative to services, and
  • second, the associated increase in wealth, which
    has resulted in more than proportionate increases
    in the demand for household-oriented or personal
    services. In parallel, thanks to productivity
    gains the relative price of manufactured products
    has been declining over time.

28
  • The interdependence between the service and the
    manufacturing sectors has also increased over
    time, as input-output data show.
  • The aggregate national accounts statistics hide
    the fact that manufacturing companies have been
    outsourcing activities regarded as not central to
    their line of business, which were earlier
    accounted for as part of manufacturing.

29
  • Manufacturing innovations have also opened the
    way for totally new service concepts, as with
    telecommunications and information technologies.
    In turn, industrial competitiveness relies on the
    quality and cost-effectiveness of transport,
    financial and business services.
  • Nevertheless, it is finally in manufacturing that
    most new technological applications are
    introduced and result in economic value. Also,
    knowledge-based, scientific breakthroughs only
    lead to new products if a solid and efficient
    manufacturing base exists to produce them.

30
  • In the face of increased global competition, most
    European industrial sectors have made substantial
    efforts to upgrade their production
    infrastructures and integrate new forms of
    organisation. Through investments in capital
    equipment, in-house research, or contacts with
    the science base, state-of-the art knowledge has
    permeated much of the textile, foodprocessing,
    furniture, farming and fishing, retail,
    engineering and chemical industries.
  • All these sectors, labelled as medium or
    low-tech, now use innovative and technology-based
    processes in their production.

31
  • This process has led to an upgrading of the skill
    content of jobs which, more than the growing
    share of high-technology sectors in total
    production, accounts for the rising demand of
    highly-skilled labour.
  • The industrys shift in demand towards higher
    levels of educational attainment, which means
    that industrys competitiveness will increasingly
    depend on the qualitative level of human capital,
    has been matched by a continuous rise in the
    average duration of education of the working
    population in the EU.

32
  • However, at 87 and 90 of the US and Japan
    levels respectively, the EU still underperforms
    its main competitors.
  • Public spending in education and training as a
    percentage of GDP, albeit at a relatively high
    level, has also been declining steadily from 5.7
    in 1990 to 5 in 2001. This is at odds with the
    Lisbon goals of a substantial increase in per
    capita investment in human resources.

33
  • The level of private investment in education,
    lifelong learning and scientific investigation is
    also much lower than that achieved by our main
    trading partners. In addition, the efficiency of
    investments in education and training also raises
    concerns.
  • Substantial investments in environmental
    protection8, clean technologies and
    environmentfriendly production processes have
    also enabled the European industry to take on
    board the sustainable development dimension,
    breaking the link between production and
    emissions of airborne pollutants.

34
  • European industry remains a dominant force in
    international trade. The greater presence of new
    trading partners in world markets has eroded the
    share of the EU in world exports.
  • However, this trend is less marked for the EU
    than for the US and Japan. The EUs share fell
    from an average of 19.3 over the 1991/95 period
    to 18.4 in 2002. Over the same period, the US
    share went down from 15.1 to 12.1, and Japans
    share from 12.2 to 8.2. Furthermore, in some
    key sectors such as automobiles, aeronautics or
    some categories of telecommunications equipment,
    EU companies have achieved global leadership.

35
  • In the 1990s, even if some small EU countries
    have recorded outstanding productivity
    improvements, productivity growth in the European
    manufacturing industry has been below the US
    levels.
  • A wide gap has emerged in the second half of the
    decade, with the EU displaying a rate of 3.2
    compared to 5.5 for the US for the period
    1996/2000.

36
  • Despite possible difficulties about the accuracy
    of productivity measurements, the data reflect an
    acceleration of the US rate of labour
    productivity growth, particularly when compared
    to the situation in the second half of the 1980s.
  • For the whole EU economy the rate of productivity
    growth is lower than for manufacturing alone,
    reflecting the relative weaker performance of the
    service sector, and displays a marked slowdown
    from an average of 1.9 in the first half of the
    1990s to 1.2 in 1995-2001.

37
  • Overall, these figures entail a dangerous
    deterioration of the growth potential of the EU
    and an obvious risk for the competitiveness of
    its industry.
  • The Commissions Competitiveness Reports of 2001
    and 2002 identified insufficient innovative
    activity and weak diffusion of ICT as key
    determinants of Europes under-performance in
    productivity growth.

38
  • The link between ICT adoption and productivity
    growth is now widely accepted. The EU rate of ICT
    expenditure has been gradually rising over the
    last years, from 5,4 of GDP in 1996 to 7.1 of
    GDP in 2001, almost narrowing the gap with the US
    figures which suffered a marked decline in 2001.
    However, the increase in ICT spending of the last
    few years has yet to translate into productivity
    gains.
  • On the other hand, although some EU companies are
    world-class innovators, a low share of European
    patent and RD activity vis-à-vis the EUs main
    competitors indicates that, overall, the European
    innovative performance remains too weak.

39
  • In the context of the Lisbon Partnership for
    Growth and Jobs the European Commission and
    Member States made a commitment to focus on
    economic growth and employment. To do this the
    EUs priorities were declared to be
  • Making Europe a more attractive place to invest
    and work
  • Putting knowledge and innovation at the heart of
    European growth
  • Shaping policies to allow businesses to create
    more and better jobs

40
  • As an important step in the delivery, today the
    Commission has set out a new integrated approach
    for industrial policy aimed at improving the
    coherence between different policy dimensions and
    increasing their relevance to individual sectors.
  • Whilst the manufacturing industry is currently
    undergoing important changes and facing major
    challenges, it needs a favourable business
    environment to continue to develop and prosper.

41
  • Todays new industry policy sets out an outline
    of work for manufacturing industries for the
    coming years. It includes new horizontal
    initiatives and tailor-made initiatives for
    specific sectors.
  • They shall complement work at Member State level
    to help address the key challenges faced by the
    various sectors of manufacturing industry.

42
  • Seven major policy initiatives are announced to
    address the common challenges across groupings of
    different industries in the light of
    competitiveness considerations.
  • An intellectual property rights (IPR) and
    counterfeiting initiative (2006)
  • Given the importance of IPR in for the
    competitiveness of many industrial sectors, the
    Commission plans to launch a dialogue with
    industry and other interested parties to
    determine what more might usefully be done to
    provide European industry with a sound IPR
    framework.

43
  • Taking account existing and planned
    anti-counterfeiting and anti-piracy instruments
    and measures, including those in the enforcement
    and customs fields, the Commission will review
    the state of progress in the whole area of IPR
    with a focus on competitiveness issues and come
    up with suggestions on how to improve the
    situation in 2006.

44
  • A high level group on competitiveness, energy,
    and the environment (end2005)
  • Competitiveness, energy and environmental
    policies are closely interrelated in their
    objectives and impacts, in particular on many
    basic and intermediate product industries. Given
    the need for consistency of policy and
    legislative initiatives in these areas and, in
    order to exploit fully the synergies between
    them, closer coordination and the development of
    an integrated approach is of the essence. For
    this purpose a High Level Group on
    Competitiveness, Energy and the Environment will
    be set up.

45
  • It will function as a an advisory platform
    bringing together the Members of the Commission
    for Enterprise and Industry, Competition, Energy
    and the Environment as well as all relevant
    stakeholders. It is designed to examine the links
    between industrial, energy and environmental
    legislation and to ensure the coherence of
    individual initiatives, whilst improving both
    sustainability and competitiveness.

46
  • External aspects of competitiveness and market
    access (Spring 2006)
  • Access to international markets is a priority
    issue for most of the sectors. The Commission is
    currently working on a possible Communication on
    the revision of Market Access Strategy, reviewing
    the existing strategy and instruments to focus on
    those sectors and markets with greatest potential
    gains for competitiveness. Market access
    objectives will be regularly prioritised in
    combination with a more effective use of the
    Trade Barriers Regulation. In cooperation with
    stakeholders, a detailed strategy will be
    developed and implemented to tackle barriers in
    the selected sectors and countries.

47
  • New legislative simplification programme
  • Better regulation at various levels has been
    identified as a key challenge for several
    sectors, including construction, motor vehicles,
    ICT industries, and the food and life sciences
    industries. The Commission has already announced
    that it intends to re-launch its work on the
    simplification of existing legislation. Following
    consultation with stakeholders, a Communication
    will be setting out a Simplification work
    programme including the three priorities that
    have already been identified for this approach
    the automotive sector, the construction sector,
    and waste legislation.

48
  • Improving sectoral skills (2006)
  • Skill shortages were identified as a key
    challenge in a wide range of different
    industries, including the ICT and engineering
    industries, the textile and leather industries,
    and a number of basic and intermediate goods
    industries. Moreover there is some evidence that
    relocation of industrial activity is in some
    cases motivated more by skill shortages than by
    cost factors. The Commission has already begun to
    address skill shortage issues through a number of
    policies, such as the Education and Training 2010
    work programme, including the European
    Qualification Framework (EQF). To supplement
    these existing initiatives, it is proposed to
    make assessments of the nature of the skill
    problems in particular industries.

49
  • These assessments would include the
    identification of current sectoral skill
    requirements and skill gaps, and would examine
    likely developments in sector-specific
    competences, including where possible effects on
    SMEs.
  • Managing structural change in manufacturing
  • The following industries need to manage
    structural adjustment the textiles, leather,
    furniture, footwear, and ceramics industries,
    printing, motor vehicles, shipbuilding, steel,
    and parts of the food industries. The Commission
    intends to ensure that better anticipation of
    economic restructuring are included in the new
    Structural Funds programmes.

50
  • In line with the Community Strategic Guidelines
    for Cohesion, 2007-2013, support for programmes
    aimed at modernisation of labour markets and
    anticipation of gradual changes throughout the
    Union in sectors for which structural change has
    been identified as an issue needs to be included
    in the new Structural Funds programmes. The
    Commission will also further explore the issue of
    enhancing the cooperation across regions faced
    with similar problems and challenges.

51
  • An integrated European approach to industrial
    research and innovation
  • The forthcoming Communication on Research and
    Innovation will set out a new, integrated
    approach to policies and actions in support of
    research and innovation, including a number of
    initiatives highly relevant for industrial
    sectors.

52
  • As part of the follow up to the above
    Communication, a European Industrial Research and
    Innovation Monitoring System will be established
    in 2006 to provide a consolidated analysis of
    developments relevant to industrial research and
    innovation, and a conduit for stakeholder views.
    This will help to anticipate both barriers and
    opportunities to improving research and
    innovation investment, and the commercialisation
    of new technologies in Europe. A High-level
    Stakeholders Group, including policy-maker
    representatives, will be set up to provide
    guidance and feedback on the focus and relevance
    of this activity for competitiveness.

53
  • Seven new sector-specific initiatives
  • In addition, a number of new sector-specific
    initiatives will be implemented
  • Setting up of a new pharmaceuticals forum (first
    meeting in 2006) Pharmaceuticals a new forum
    with government ministers, senior industry
    representatives and other stakeholders will
    concentrate on RD, national regulations and the
    development of a single market.

54
  • Mid-term review of life sciences and
    biotechnology strategy (2006-2007) it will
    involve closer cooperation with industry through
    the Competitiveness in Biotechnology Advisory
    Group and a regular annual triangular dialogue
    with industry and Member states in order to help
    identify problems, propose priorities, and make
    recommendations for actions.
  • New High-Level Groups on the chemicals and the
    defence industry (2007) new high level groups
    will be established to focus on the impact of the
    REACH directive on the competitiveness of the
    chemical sector and to consider procurement and
    standardisation in the defence area.

55
  • European Space Programme common, inclusive and
    flexible programmatic basis for the activities of
    European Space Agency, EU and their respective
    Member states.
  • Taskforce on information and communication
    technologies (ICT) competitiveness (2005/2006) a
    taskforce with stakeholders representatives will
    be set up that will focus on identifying and
    removing the obstacles that inhibit ICT take-up.
    It will also draw attention of Member states to
    the barriers to the competitiveness of ICT
    manufacturing in Europe and the obstacles to wide
    and effective take-up.

56
  • Mechanical engineering policy dialogue
    (2005/2006) separate forums will examine the
    sectors strengths and weaknesses and propose
    remedies.
  • A series of competitiveness studies, including
    for the ICT, food, and fashion and design
    industries analyzing the trends affecting the
    competitiveness of industrial sectors with a view
    to deriving further proposals for concrete
    policies and actions where necessary.

57
  • 27 separate sectors grouped in four categories
  • The range and diversity of the sectoral policy
    challenges has thus been examined in some detail,
    based upon a systematic screening of
    opportunities and challenges for 27 separate
    sectors of EU manufacturing industry and
    construction. On this basis, an on-going outline
    of work for industrial policy over the coming
    years has been constructed.

58
  • Individual sectors have been grouped into four
    broad categories
  • 1. Food and Life sciences industries
  • The food and life sciences industries (e.g. food
    and drink, pharmaceuticals, biotech) make up one
    fifth of EU manufacturing and are characterized
    by medium to high growth rates. As highly
    innovative industries, key knowledge challenges
    are
  • Research development, protection of
    intellectual property rights, and the financing
    innovation for highly innovative SMEs.

59
  • International regulatory convergence is hence
    also an issue for many sectors. Key
    sector-specific challenges include the need to
    make more progress towards creating a fully
    competitive single market for pharmaceuticals
    products, and environmental and market access
    issues relating to the food and drink industries,
    pharmaceuticals, and cosmetics.

60
  • 2. Machine and systems industries
  • The machine and systems industries (e.g. ICT,
    mechanical engineering etc.) account for about
    one third of EU manufacturing value added and
    are characterized by medium to high growth rates
    with high rates of RD spending. The challenges
    for these sectors therefore mainly relate to
    innovation, intellectual property protection, and
    ensuring the availability of high skilled
    personnel.

61
  • The Single Market for many of these industries
    depends upon technical standards that need
    continual updating. Better access to
    international markets is also essential for some
    industries, notably ICT, electrical and
    mechanical engineering, and motor vehicles. The
    transport industries also face a number of
    environmental challenges, particularly the need
    to continually improve the environmental
    performance of their vehicles, planes, and ships.

62
  • 3. Fashion and design industries
  • The fashion and design industries (e.g. textiles
    and footwear) make up just 8 of manufacturing
    value added, but have experienced low or negative
    output growth and relatively low RD spending
    over recent years. Successful structural
    adjustment is the key challenge for these
    industries. Improving innovation, IPR protection,
    and skills are essential to be able to continue
    to improve the quality and product-diversity of
    their output. Obtaining better access to
    currently heavily protected world markets is also
    a key policy requirement for these industries.

63
  • 4. Basic and intermediate industries
  • The basic and intermediate industries (e.g.
    chemicals, steel, and pulp and paper) account
    for some 40 of EU manufacturing value added. As
    suppliers of key inputs for the rest of EU
    industry, these industries can be an important
    source of innovation for other sectors. Growth
    rates in this sector have been medium to low,
    with the exception of the strongly performing
    chemicals and rubber industries.

64
  • These industries are largely energy-intensive and
    hence the main cluster of challenges relates to
    energy and the environment. Important
    sector-specific challenges include the REACH
    legislation for the chemicals industry and
    legislative simplification issues for the
    construction sector. Structural adjustment is an
    important issue for the ceramics, printing, and
    steel industries.

65
(No Transcript)
66
  • A new integrated industrial policy is oriented to
    create the conditions for manufacturing to thrive
  • In the face of globalisation and intense
    international competition, the European
    Commission has launched a new industrial policy
    to create better framework conditions for
    manufacturing industries in the coming years.

67
  • The manufacturing industry matters to the EU, it
    employs over 34 million people, it accounts for
    three quarters of EU exports and over 80 of EU
    private sector RD expenditure.
  • Whether or not a business succeeds or not
    ultimately depends on the vitality and strength
    of the business itself, but the overall
    environment can help or harm business prospects.

68
  • The new EU industrial policy will complement work
    at Member State level to support a strong and
    dynamic industrial base. It includes seven new
    initiatives
  • on competitiveness,
  • energy and the environment,
  • on intellectual property rights,
  • on better regulation,
  • on industrial research and innovation,
  • on market access,
  • on skills.

69
  • Also included managing structural change - which
    will benefit a wide range of industry sectors.
  • Seven additional initiatives are targeted at
    specific sectors such as pharmaceuticals, defence
    and Information and communication technologies.

70
  • The approach underlying the new industrial policy
    is based on a detailed screening of 27 individual
    sectors of manufacturing industry and
    construction. It builds on the success of several
    joint initiatives undertaken by the Commission
    with, for example the shipbuilding and car
    industries.
  • This industrial policy is an important step in
    the delivery of the Commissions new Lisbon
    Partnership for Growth and Jobs.

71
  • The industrial policy of the European Union has a
    key contribution to make to the three following
    tasks.
  • The first is to set out the boundaries within
    which industry and entrepreneurs can pursue their
    ambitions. It aims to establish a predictable
    legal framework which can be adapted in response
    to policy needs. Its counterpart is that they
    should be confident that, when they respect these
    obligations, European society as a whole accepts
    the pursuit of their activities.

72
  • For the Commission, as for Member States, this
    must be an active role, for failure to set this
    framework correctly can lead to risks for the
    public, or to the waste of industrial resources
    and the frustration of entrepreneurial
    initiative.
  • The second is to ensure that the conditions are
    present for industry to develop and to realise
    its competitive potential. European society
    cannot be passive in its attitude to the source
    of its wealth.

73
  • The availability of technology, skills, an
    educated workforce, a positive attitude to
    risk-takers, finance and the other conditions
    which form a truly competitive and innovative
    business environment have to be the active
    concern of its policymakers.

74
  • The third is to ensure that the frameworks,
    institutions and instruments that are necessary
    to the business environment and for industry to
    be able to act in accordance with its public
    obligations are in place and function
    efficiently, in the broadest sense.
  • Although this is horizontal in its nature, it has
    to be applied in a way that is adapted to the
    specific characteristics of different sectors.

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  • The goal set by the Lisbon European Council and
    the challenges of sustainability are ambitious
    and can only be met if EU industrial policy is
    fully mobilised.
  • A robust set of policy instruments is available
    and there is a general willingness of interested
    parties to contribute. However, success, and
    ultimately the availability of more and better
    jobs and greater social cohesion, will only be
    possible if efforts are fully focused.

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  • The Commission intends therefore, over the coming
    months, to screen the way in which its main
    policies interface with the competitiveness of EU
    industry.
  • This exercise will also help industrial policy to
    contribute to meeting the objectives of other
    policies. This debate must not remain confined to
    the Commission. All the EU institutions, but also
    the Member States and candidate countries, should
    pick up the challenge in their turn.

77
  • Improving EU industrial policy, to ensure that it
    stimulates and sustains EU industrial
    competitiveness, is a concern for us all. In this
    respect, the Commission invites all interested
    parties to provide comments on the issues raised
    by this Communication.
  • The newly established Competitiveness Council
    will have a key role to play in pushing forward
    the process started with this Communication.

78
  • It offers a forum to establish the roadmap for
    industrial policys contribution to the Lisbon
    goal and to monitor progress. It can ensure
    coherence between the policies at EU and at
    Member State level and improve their interaction.
    It is well placed to review both the general
    competitiveness situation and that of individual
    industry sectors.

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  • This is a process that is starting. The
    Commission will come back to the issue to draw
    further conclusions, in the light of its progress
    and may propose further initiatives.
  • The fact that the application of policy needs to
    take account of the specific characteristics of
    sectors does not mean that industrial policy must
    be fragmented.

80
  • On the contrary, a broad view is needed. This
    will guarantee that the application of industrial
    policy in a given sector is consistent with the
    interests of other sectors.
  • In addition, approaches that are tested in a
    given sector can be added to the industrial
    policy toolbox and used as models in other
    sectors confronted with similar needs.
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