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EU local and regional authorities contribute to the
mid-term review of Europe 2020
Assessment of the flagship initiative
An industrial policy for the globalisation era
Almost three years after the launch of Europe 2020, the Committee of the Regions has launched a broad assessment of the Strategy in preparation for its mid-term review, expected in 2014.
As part of this assessment, the replies to this questionnaire on the state of play of the flagship initiative Anindustrial policy for the globalisation erawill be discussed at a conference to be held on 10 April2013 in Brussels.
This conference will be the third in a series of CoR events and monitoring initiatives on the Europe 2020 flagship initiatives, preparing the mid-term review in 2014. More news on this conference can be found on the CoR website[1].By participating in this survey, you will:
- ensure that your views are taken into account in the debate held during the conference;
- contribute to the CoR's consultative activity over the coming months, to include an opinion drafted by Claude Gewerc, President of Picardy Regional Council (PES/FR), scheduled for adoption at the CoR plenary session on 10-11 April 2013;
- contribute to the fourth CoR Monitoring Report on Europe 2020, to be published in October 2013;
- contribute to the mid-term review of Europe 2020 in 2014.
If you wish to participate in this survey, please complete this questionnaire in any eu language, using the spaces provided, and return it in text format to:
by 1 March 2013
The questionnaire will be available in all languages in mid January
For more information on this survey and for details on how to join the Europe 2020 Monitoring Platform, go to:
Contributor information[2]
Name of sender: / Margit ConradContact details:
(address, telephone, email) / In den Ministergärten 6, 10117 Berlin
On behalf of:
(name of local or regional authority) / State of Rhineland-Palatinate
Type of organisation / City/Town/Municipality Region
County/Province Association of local and/or regional authorities
Other (please specify)
Country: / Germany
Member of the EUROPE 2020 Monitoring Platform: / Yes No
Current policy challenges and responses at regional and local level
1) What are the main challenges faced by industry in your region/city?Please answer with respect to competitiveness (market trends; positioning in the market; competitors) and employment (finding the necessary workforce with the right skills; ability to create new jobs).
One key challenge is to create the conditions for viable and sustainable economic development, so that SMEs in particular can meet the challenges of globalisation, demographic change, technological progress, resource scarcity and climate change. The state's industrial policy is focused on sustainable development through energy and resource efficiency, long-term human capital planning to meet the needs of industry, impetus for industry from the cultural and creative sector, and a high-performance transport and logistics sector as the foundation forindustrial delivery flows. Manufacturing industry is responsible for 26.2% of total added value in the state, which places Rhineland-Palatinate among the leading states nationwide on this measure. More than 240500 employees distributed between more than 1000 business with 50+ employees generated 74.6 billion euros of revenue in 2010, or approximately 5.1% of all revenue generated by German industry (share of employment: approx. 4.8%). Rhineland-Palatinate industry was a particularly prominent exporter, sending 52.1% of its products abroad, a much higher share than the national average (46.1%).
2) Do these challenges differ from thosefaced in 2010 (when the Europe 2020 strategy was launched)? If so, in what respect?
Please make a distinction between structural problems and problems resulting from the impact of the economic and financial crisis.
The challenges facing manufacturers in Rhineland-Palatinate have changed over the last five years. Whereas 2007 and 2008 saw booming international markets and strong demand for manufacturing goods "made in Germany", and the order books of German and Rhineland-Palatinate manufacturers were full, the economic and financial crisis has changed this picture and forced businesses to adapt considerably.Revenues generated by Rhineland-Palatinate industry were down 19.7% year on year in 2009, mainly because of outstanding orders and cancellations. Whereas sectors closest to consumers such as the foodstuff sector were less affected by the crisis, export-oriented sectors such as the chemical industry and mechanical engineering suffered most clearly as a result of the economic and financial crisis – especially in 2009.
Despite a clear fall in incoming orders, particularly from abroad, and the resulting fall in production, it was largely possible to maintain employment levels thanks to flexible collective agreements and appropriate short-time working regulations. In 2009, more than 242000 people were employed in the altogether 1041 businesses with 50+ employees – down only 3.3% on the previous year. A general economic recovery at the end of 2009 saw industry, too, recover. Demand on international markets for German and Rhineland-Palatinate products rose sharply again. International business proved to be the engine of recovery. Exports climbed to 52.1% in 2010. This benefited export-oriented sectors in Rhineland-Palatinate such as the chemical industry, mechanical engineering and electronics, which posted significant increases in turnover (up 19.3% for the state as a whole). However, at 74.6 billion euros Rhineland-Palatinate industry remained 4.1% below the record level recorded in 2008, despite the considerable growth in 2010. In 2011 industry generated 83 billion euros in revenue, exceeding the pre-crisis record set in 2008 (78 billion euros).
3) How are your regional/local policies addressing these challenges?
Please make clear whether you are (i) working on the basis of a local/regional industrial strategy; (ii) providing direct support to firms and networks/clusters; (iii) encouraging stronger relationships between firms, universities, public and private research institutions; (ivimproving the business environment, including through administrative simplification; (v)undertaking a proactive industrial policy, focusing on certain activities or sectors; or a mix of these actions.
Please provide examples (or at least web references[3]).
With its competitive, innovative industry focused on technologically advanced investment goods, the German and Rhineland-Palatinate economies fare well in international comparison and can profit from global megatrends, especially in sectors linked to environmental and climate change, innovative mobility and energy solutions, and modern health care technology, as shown by the large number of (international) market and technology leaders. A well-established export orientation, an extended industrial value creation chain, a heterogeneous sector structure, a broad size range of manufacturing business and comparatively high investment spending by German and Rhineland-Palatinate manufacturers all underlie the success of German and Rhineland-Palatinate industry. The fact that Germany has emerged in a much stronger position from the crisis than other industrialised countries is not least thanks to the stimulus provided by German industry. Rhineland-Palatinate industry also fares well in comparison with other German states in terms of productivity: with a gross added value of 70800 euros per worker, Rhineland-Palatinate came in at third place in a ranking of German states (not including city-states) – behind North Rhine-Westphalia and Hesse. In 2010, each Rhineland-Palatinate manufacturing employee produced almost 1500 euros more in value than the national average.
Industry is a very heterogeneous sector of the economy, producing a very broad spectrum of goods in Rhineland-Palatinate. However, the industry structure in Rhineland-Palatinate differs starkly from that at national level: whereas car manufacturing, mechanical and plant engineering, the metal industry, foodstuffs and electrical engineering make up the five largest sectors in Germany in terms of revenue, in Rhineland-Palatinate the top five are the chemical industry, car manufacturing, the metal industry, consumer goods (including tobacco and alcohol), and mechanical engineering.
Alongside its own industrial strategy, Rhineland-Palatinate has a policy of economic clusters. A cluster consists of a series of interconnected sectors and other organisations that boost competitiveness, such as specialised service providers, suppliers, research and educational institutes and other institutions such as chambers of commerce and associations. These players are grouped along a particular value chain and oriented towards a common market. For a cluster to function well the following criteria must be met:
- The existence of specific links and areas of specialisation
- Availability of a critical mass of active and complementary players
- Players must identify with the cluster
- Players must be prepared to cooperate with other businesses in the cluster
BOX 1 – An Industrial Policy for the Globalisation Era
The Europe 2020 flagship initiative An integrated industrial policy for the globalisation era, adopted by the European Commission on 28 October 2010, sets out a strategy that aims to boost growth and jobs by maintaining and supporting a strong, diversified and competitive industrial base in Europe, offering well-paid jobs while becoming more resource-efficient[4]. The flagship initiative highlights ten key actions for European industrial competitiveness:
- "competitiveness proofing" i.e. analysis of the impact on competitiveness of all policy proposals;
- "fitness checks" of existing legislation aimed at reducing the cumulative effects of legislation in order to cut costs for businesses in Europe;
- making it easier for SMEs to access credit and facilitating their internationalisation;
- a strategy to strengthen European standardisation;
- more efficient European transport, energy and communication infrastructure and services to serve European industry;
- a new strategy on raw materials creating the right framework conditions for sustainable supply and management of domestic primary raw materials;
- addressing sector-specific innovation performance with specific actions, in such areas as advanced manufacturing technologies, construction, bio-fuels and road and rail transport, particularly with a view to improving resource efficiency;
- actions to improve framework conditions and support innovation in energy-intensive industries;
- a space industrial policy creating a solid industrial base and covering the whole supply chain;
- reporting on Europe’s and Member States' competitiveness, industrial policies and performance on an annual basis.
You can find more information on An industrial policy for the globalisation era,seen from the point of view of local and regional authorities, in the Committee of the Regions' publication Delivering on the Europe 2020 Strategy. Handbook for Local and Regional Authorities[6]. General information on Europe 2020 can be found on the strategy's official website[7].
How is the Europe 2020 flagship initiative An industrial Policy for the Globalisation Era relevant to your city or region?
4) With respect to industrial policy, how would you evaluate the support your city/region has received from EU policies so far? Was it sufficient in view of the challenges you are facing in this area? As concerns EU-financed investments, in which area has more added value been created (e.g. infrastructure, skills, innovation, etc.)?Please answer with reference to the various existing strands of EU policy (Europe 2020 flagship initiative "An industrial policy in the globalisation era", Structural Funds, 7thFramework Programme, Competitiveness and Innovation Programme, etc.).
Please comment both on the policy tools used and on funding.
The first thing that needs to be mentioned here is the support Rhineland-Palatinate receives from the European Regional Development Fund (ERDF). Programmessupported with ERDF funds have been an important part of the state's economic policy for a number of years now. In the current funding period 2007-2013, the EU has provided Rhineland-Palatinate with a total of 217.6 million euros in support. The positive impact of this money is clear to see.
For example, more than 500 projects by SMEs have been supported in the state, creating more than 1100 new jobs.
In addition, more than 50 innovation projects in individual businesses have helped to strengthen the competitiveness of Rhineland-Palatinate businesses and to create and retain skilled jobs. New products and production methods were supported. Thirty-six million euros of state money was matched with about 13 million euros ofERDF funding.
These examples demonstrate the importance of EU funds in the structural development of Rhineland-Palatinate.Established as an integral part of Rhineland-Palatinate's economic policy, these funds help to sustain and boost the state's competitiveness and capacity for innovation.
5) The Europe 2020 flagship initiative An integrated industrial policy for the globalisation era[8] (see Box 1 above),as reviewed by the Commission Communication A stronger European industry for growth and economic recovery[9]of 10 October 2012,sets out a "renewed industrial policy" based on the four pillars presented in Box 2 below.
Which of these pillars are more relevant to your specific local/regional situation?
Especially pillars 1, 3 and 4.
BOX 2 - An industrial policy for the globalisation era: 2012 update
The flagship initiative on industrial policy, as reviewed by the Communication of 10 October 2012, places more emphasis on short-term, growth-enhancing measures resulting from the economic crisis and its impact on EU industry. The flagship initiative is based on an extensive consultation of stakeholders carried out in the first half of 2012, which highlighted the impact of the crisis in terms of job losses, the decline of industrial production and very low business confidence. Those short-term problems go hand in hand with EU industry's structural competitiveness problems. The European Commission's response is based on these four “pillars of the reinforced industrial policy”, to be addressed through partnership involving the EU, its Member States and industry:
Investments ininnovation, with a focus on six priority areas with great potential (advanced manufacturing technologies for clean production; key enabling technologies; bio-based products; sustainable industrial and construction policy and raw materials; clean vehicles and vessels; smart grids).
Better market conditions, both in the internal market, with special reference to goods, entrepreneurship and the protection of intellectual property rights, and in international markets.
Access to finance and capitals, through better mobilising and targeting of public resources, including from the EIB, and by unlocking private funds.
Human capital and skills, to promote job creation and better anticipation of, and investments in, the skills needed to promote industry's competitiveness[10].
Are your country's policies relevant to your city or region?
6) To help meet these objectives, your country has set its own targets, which you can find at Are your country's targets appropriate to your local (regional) situation?Please explain, bearing in mind that "An industrial policy for the globalisation era" can potentially contribute to at least the following Europe 2020 targets:
- in a quite direct manner: 75% of the 20-64 year-olds to be employed; 3% of the EU's GDP to be invested in research and innovation (public and private investment);
- in an indirect manner: 20% less greenhouse gas emissions than in 1990; 20% of energy from renewables; 20% increase in energy efficiency.
Rhineland-Palatinate's target is to generate 100% of its electricity from renewable sources by 2030.
7) Do you think that the industrial competitiveness policies set in your country's current (2012) National Reform Programme[11]meet the needs of your city or region?
If not, how would you change your National Reform Programme next year?
......
8) Which measures in the field of industrial competitiveness policycould be more helpful in the short term?
......
Managing and funding issues
9) Is industrial competitiveness policy in your region/city adequately funded? Apart from EU funding (which you described in your reply to question 4) to what extent did you have recourse to other sources (e.g., PPPs, financial engineering)? Do you think you will have enough funds to run your policy programmes in this field in the future?......
10) What kind of cooperation/coordination takes place between your region/city and the national and EU levels in the fields of industrial competitiveness policy?
Do you see any room for even stronger cooperationbetween different tiers of government in this field? If so, please explain.
......
11) Are theforthcoming Partnership Agreements/Contracts(under the new 2014-2020 cohesion policy)an opportunity for better coordinationbetween different tiers of government in the field of industrial policy? If so, why? And what could be the role of the different stakeholders (other levels of government and other stakeholders)?
......
12)Please addany further comments you might wish to make on the matters dealt with in this questionnaire.
In response to questions 9-11: Following decisions by the Bundesrat and the conference of state ministries of economics (WMK), it should be emphasised that when it comes to the creation of a framework that allows industry to remain competitive, the knowledge and experience of the regions and national governments are most important, and that there is no need to create an EU framework for comprehensive coordination and governance of industrial policy at European level.
SHARE YOUR GOOD PRACTICE
With a view to the CoR conference to be held on 10 April2013 and the exhibition of good practices in the fields covered by An industrial policy for the globalisation era, you might wish to submit an example of good practice. To do so, please complete the form available on our website:
/ JOIN THE EUROPE 2020 MONITORING PLATFORM
To help convey the voice of EU cities and regions in the implementation of Europe 2020 at EU level and in your country, join us. For details on how, see:
THANK YOU FOR YOUR COOPERATION!