Brussels, 5 October 2005
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 EU’s 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
Today’s 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.
The full text of the new industry policy is available at:
This MEMO provides the following information:
- Seven major cross-sectoral policy initiatives
- Sector-specific initiatives
- The EU industry – some key figures
- separate sectors grouped in four categories
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)
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.
- A high level group on competitiveness, energy, and the environment (end2005)
- External aspects of competitiveness and market access (Spring 2006)
- New legislative simplification programme (October 2005)
- Improving sectoral skills (2006)
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 (end 2005)
- An integrated European approach to industrial research and innovation (2005)
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 R&D, national regulations and the development of a single market.
- 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.
- 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.
- 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.
A strong and healthy industry is essential to fully exploit the EU’s potential for growth and to enhance and sustain the EU’s economic and technological leadership. EU manufacturing industry is important in its own right - it provides around a fifth of EU output and employs some 34 million people in the EU. Beyond this:
- Manufacturing is the key to exploiting the new knowledge economy - over 80% of EU private sector R&D expenditures are spent in manufacturing  .
- Manufacturing generates the new and innovative products that provide some three-quarters of EU exports
- Manufacturing creates growth and jobs in the wider EU economy: it is closely inter-linked with the service industries, providing demand for business services and supplying key inputs to the services industries
- EU manufacturing industry consists of a large majority of SMEs: over 99% of companies and 58% of manufacturing employment are SMEs
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 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.
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.
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 R&D spending. The challenges for these sectors therefore mainly relate to innovation, intellectual property protection, and ensuring the availability of high skilled personnel. 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.
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 R&D 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.
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. 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.
Share of Value-added in manufacturing in 2004 (% points) Average annual growth rate 1993-2004 (%) Food and life science 18.1 2.4 Machine and systems 33.1 3.5 Fashion and design 7.5 -2.0 Basic and intermediate 41.3 2.1 Total Manufacturing 100.0 2.3
 Including the Commission proposals for a directive on “EU criminal law provisions to combat infringements of intellectual property rights”, July 2005.
 In the Communication on Better Regulation for Growth and Jobs
 Sources: Eurostat Business Statistics.