An industrial policy geared towards future-proof sectors

For years, one of the main challenges of the Union was to stimulate economic growth while ensuring global competitiveness. In 2020, in addition, the Union needs to deliver towards climate-neutrality by 2050, and recover after the COVID pandemic. The ‘industrial renaissance’ of Europe proposed in 2014 needs to be re-shaped in an industrial revolution. Why I am choosing this wording? Deep transformation of our industrial sectors is what we need, and one that fosters digitalization, innovation and new technologies, while protecting intellectual property and reducing the carbon footprint.

In order to maintain the global competitiveness of European industry, many current shortcomings, such as insufficient investment levels, widening productivity and innovation gaps, and skills shortages, must be addressed.

The proposed EU Industrial Strategy released by the Commission in March this year focuses on the objective of maintaining the Union’s industry’s global competitiveness whilst at the same time helping deliver on its ambitious climate goals. This proposal was released before we knew the magnitude of the pandemic and before the new 2030 climate target. We need to match the proposals with the 2030 target. As regards the target, I strongly believe that the recent vote in the Plenary was “overambitous” and that a 60% target will not be feasible in terms of jobs and different national starting points. In addition the study released by the Commission states that the 55% reduction in greenhouse gas emissions was “achievable” and “beneficial” for the EU economy. I sincerely hope that we will reach an agreement with the Council on a target that will be feasible for all MS.

The Green Recovery is a win-win strategy.

Through a Green Recovery, MS will have the opportunity to unleash innovation, undertake wider reaching and fundamental restructuring of critical industrial sectors, in particular the heavy industry sectors, such as steel, cement, etc; and accelerate at the same time the existing climate ambitions.

It will help Member States restore their economies and proofing sectors in the transition toward climate ambitions, and at the same time, creating jobs and ensure certainty to investors.

Nevertheless, when speaking about the transformation of our industry to a future-proof one, it can only happen if we align the objective of transition towards clean industries with the need to remain and become competitive inside the Union and worldwide. The transition to clean industries implies deepening the transition of our energy sector, that needs to be balanced and feasible for all our regions and for all our industrial sectors, no regions should left behind, in particular those reliant on coal, and no sector of industry should be further affected, especially given the COVID 19 economic impact.

Moreover, the COVID pandemic has highlighted Europe’s over-dependency on international supply chains, which have been largely disrupted, and consequently the need for European strategic autonomy in the industrial extent. The COVID pandemic has also complicated the delivery of finalised goods, which often require onsite visits and approvals. Many of the industrial sectors have been disrupted also due to the wide variety of containment measures taken by the MS.

According to the Eurostat, the industrial production decreased during the first months of the pandemic and various industry groups where affected in a more drastic and severe way than others.

Despite the partial recovery over the summer, the losses have not been recovered still.

To give you a more concrete example, in the healthcare associated industrial sector, the COVID-19 has deepen medicines and vaccines shortage and has revealed shortages in the supply of equipment. We also encounter the situation when the supply can be disrupted if one of the links prior to finalised products is broken on intermediate products and raw materials, namely the API situation. In the near future we need to start discussing on bringing back API to Europe and the manufacturing capacities, whether we are speaking about new medicines, generics or biosimilars.

Whether we are speaking in particular about sectors of industry, or in general, about our industrial base in the Union, we need an industrial policy that should include actions to keep the manufacturing footprint inside the Union and further increase the existing one to meet the demand.

At the same time, for our industrial base to become resilient for our next generations, the industrial policy will have to enhance industrial competitiveness and to promote innovation and sustainability, while reaching the climate ambitions.