This week the European Commission updated the EU Industrial Strategy to ensure that its industrial ambition takes full account of the new circumstances following the COVID-19 crisis and helps to drive the transformation to a more sustainable, digital, resilient and globally competitive economy. It shows support for industrial sectors that are strategic to the European economy and that are pushing to rally and decarbonise in the post-COVID-19 era, but that are dependent on an enabling framework preventing carbon leakage.
The updated strategy reaffirms the priorities set out in the March 2020 Communication, published the day before the World Health Organisation declared COVID-19 a pandemic, while responding to the lessons learned from the crisis to boost the recovery and enhance the EU’s open strategic autonomy. It proposes new measures to strengthen the resilience of the Single Market, especially in times of crisis. It addresses the need to better understand our dependencies in key strategic areas and presents a toolbox to address them. It offers new measures to accelerate the green and digital transitions. The updated strategy also responds to calls to identify and monitor the main indicators of the competitiveness of the EU economy as a whole: single market integration, productivity growth, international competitiveness, public and private investment and R&D investment.
Importantly, the SME dimension is at the core of the updated strategy with tailored financial support and measures to enable SMEs and start-ups to embrace the twin transitions. The Commission intends to appoint Mr Vazil Hudák as the SME Envoy. His appointment is currently being finalised.
The updated Industrial strategy focuses on the following key areas:
Strengthening Single Market resilience
The Single Market has been severely tested by supply restrictions, border closures and fragmentation following the COVID-19 outbreak. The crisis highlighted the essential need to uphold the free movement of persons, goods, services and capital in the Single Market and the need to work together to strengthen its resilience to disruptions.
Dealing with the EU’s strategic dependencies
Openness to trade and investment is a strength and source of growth and resilience for the EU, which is a major importer and exporter. Yet the pandemic also triggered wider awareness of the need to analyse and address strategic dependencies, both technological and industrial.
Accelerating the twin transitions
The 2020 Industrial strategy announced actions to support the green and digital transitions of EU industry, but the pandemic has drastically affected the speed and scale of this transformation. Therefore, the Commission outlines new measures to support the business case for the green and digital transitions, by:
- Co-creating transition pathways in partnership with industry, public authorities, social partners and other stakeholders, where needed, starting with tourism and energy intensive industries. Such pathways could offer a better bottom-up understanding of the scale, cost and conditions of the required action to accompany the twin transitions for the most relevant ecosystems leading to an actionable plan in favour of sustainable competitiveness;
- Providing a coherent regulatory framework to achieve the objectives of Europe’s Digital Decade and the ‘Fit for 55′ ambitions, including by accelerating the rollout of renewable energy sources and by ensuring access to abundant, affordable and decarbonised electricity ;
- Providing SMEs with Sustainability Advisors and supporting data-driven business models to make the most out of the green and digital transitions;
- Investing to upskill and reskill to support the twin transitions.
The ongoing extensive review of the EU competition rules also makes sure that they are fit to support the green and digital transitions to the benefit of Europeans, at a time when the global competitive landscape is also fundamentally changing.