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European Industrial Policy

27 November 2009
by Ina Dimireva -- last modified 12 December 2009

The European Commission is presenting a new industrial policy to create a more suitable framework for European manufacturing. Establishing a solid and dynamic industrial base contributes to the growth of the European Union and sustains its economic and technological leadership in a context of growing globalisation.



Communication from the Commission, 5 October 2005, entitled "Implementing the Community Lisbon Programme: A policy framework to strengthen EU manufacturing - towards a more integrated approach for industrial policy" [COM(2005) 474 final - not published in the Official Journal].


A flourishing manufacturing industry is key to fully exploiting the European Union's potential for growth and sustaining its economic and technological leadership.

It is therefore essential to improve the framework conditions for the development of European manufacturing, especially in a context of globalisation and intense international competition.

European manufacturing and globalisation

In the context of globalisation, enterprises need to develop their products and manufacturing processes while improving their skills in order to remain competitive in the new markets, but they must also find new opportunities resulting from technological developments and globalisation.

Encouraging adaptability and structural change to sustain the competitiveness of European manufacturing is essential, especially in the light of increasingly strong competition from emerging economies, such as China or India.

European industrial policy

The European industrial policy presented by the Commission sets out to create a more favourable framework for the development of European manufacturing. It supplements the efforts already made by the Member States to sustain a solid and dynamic manufacturing base in the sectors where the latter cannot act effectively on their own.

The Community industrial policy combines a horizontal approach, aimed at ensuring cohesion and synergy among the various strategic sectors, with a sectoral approach, allowing the specific characteristics of the various sectors to be taken into account.

This industrial strategy is based on the Commission's assessment of the opportunities and challenges in 27 manufacturing and construction industry sectors in the EU.

Instruments for industrial policy

Seven cross-sectoral policy initiatives are announced in order to address the common challenges across groupings of different industries and thereby to increase their competitiveness:

  • an intellectual property rights and counterfeiting initiative (beginning of 2006), especially in order to ensure respect for already harmonised rights;
  • high-level group on competitiveness, energy and the environment (end of 2005);
  • external aspects of competitiveness and market access (spring 2006);
  • new legislative simplification programme (October 2005);
  • improving sectoral skills (2006);
  • managing structural change in manufacturing (end of 2005);
  • integrated European approach to industrial research and innovation (2005).

At the same time, there will be seven sectoral initiatives:

  • introduction of a new Pharmaceuticals Forum (first meeting in 2006);
  • mid-term review of life sciences and biotechnology strategy (2006-2007);
  • new high-level group on the chemicals industry (2007), following the adoption of REACH;
  • high-level group on the defence industry;
  • European Space Programme;
  • task force on competitiveness of information and communication technologies (ICT) (2005-2006);
  • mechanical engineering policy dialogue (2005-2006).

European manufacturing

The manufacturing industry has a particularly important position in the European Union. It employs more than 34 million people and accounts for about a fifth of EU output and three-quarters of EU exports. It consists of a large majority of small and medium-sized enterprises (SMEs), which account for 99% of companies and 58% of manufacturing employment. Closely linked with the services industry, the manufacturing industry creates jobs and contributes to Europe's economic growth. More than 80% of private sector R&D expenditure is spent in manufacturing, making it a key element in the new knowledge economy.


Since its Communication on industrial policy in an enlarged Europe in 2002, the European Commission has been laying the basis for a European industrial policy. It provided an analysis of deindustrialisation in its Communication of 2003 on the key issues in Europe's competitiveness and it subsequently developed the idea in its Communication of 2004 entitled " Fostering structural change: an industrial policy for an enlarged Europe ".

In proposing a new industrial policy, the European Commission is fulfilling its commitment to contribute to establishing a solid industrial base, a commitment which was undertaken as part of the new Lisbon "partnership for growth and employment".


Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions "Mid-term review of industrial policy - a contribution to the EU's Growth and Jobs Strategy [COM(2007) 374 final - Not published in the Official Journal].

EU industrial policy has borne fruit, with industry making a substantial contribution to growth and jobs in Europe. The Commission therefore wishes to consolidate this progress by pursuing and intensifying most of the measures launched in 2005.

New initiatives will also be launched to tackle the main challenges of the future: globalisation, technological progress and the environment. To adapt to climate change, the Commission intends to introduce a sustainable industrial policy based on three main principles:

  • to stimulate the production of low-carbon and energy-efficient goods and services;
  • to create an internal market of environmental products;
  • to promote environmental standards for more sustainable goods and services outside the EU, giving European businesses wishing to export environmentally-friendly goods and services a relative advantage.

The Commission will also support energy-intensive industries to make them both competitive and sustainable. EU industrial policy will also stress access to raw materials, the clustering of businesses, the removal of obstacles hindering the development of new markets, the analysis of the impact of services on industrial competitiveness and the use of standards to speed up innovation. Finally, two new sectoral initiatives will be launched in the fields of food processing and electrical engineering.

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