Go back

Variability within industry hinders Europe’s growth, report says

Competitiveness and innovation levels vary significantly across Europe, which reduces the continent’s ability to compete on a global level, according to an industrial policy report released by the European Commission.

The Commission published the report, called “Industrial Policy: Reinforcing competitiveness”, on 14 October. The report found that the share of innovating companies ranges widely across Europe, with Germany, where 80 per cent of companies considered by the authors to be engaged in innovation, at the top end. Latvia placed bottom with only 25 per cent of local companies rated as doing some kind of innovation activity.

The report also found that the labour efficiency of small manufacturing companies, which make up the basis of Europe’s industry, differed greatly from country to country. For example, labour productivity in the manufacturing sector is almost 125 per cent of the added value in Ireland, but less that 20 per cent in Bulgaria.

Concerning pan-European business development the report found that the EU has fewer innovative start-ups than the United States and Japan, and that EU research is less often commercialised. Innovative companies are well-represented in Luxembourg, Germany, Belgium and Portugal, and particularly rare in Hungary, Poland, Latvia and Lithuania.

The report suggests that member states and the Commission should do more to coordinate national industrial policies and improve the framework for businesses to trade and innovate.

“The slowdown of the recovery should push us to put competitiveness and growth at the top of the political agenda,” said Antonio Tajani, the industry commissioner during the report’s launch event in Brussels. “We need structural reforms aimed at freeing the potential of our entrepreneurs, the main actors for recovery.”

Amongst the report’s recommendations are suggestions to move EU markets towards so-called key enabling technologies, which include nanotechnologies, materials and industrial biotechnology. The report says that these industrial fields are expected to grow by up to 50 per cent by 2015.