2. Enterprise and Industry Directorate-General Industry in Europe: the challenge of globalisation 1 March 2007 Didier Herbert Head of Unit Development of Industrial Policy DG Enterprise and Industry European Commission

3. I. INDUSTRY IN EUROPE: PERFORMANCE IN A GLOBALISED WORLD

4. Industry in Europe: importance in the economy Manufacturing accounts for over 80% of EU private sector R&D expenditure Manufacturing accounts for 75% of EU exports; trade surplus with 1/3 countries. Employment: 34 mio Big part of service sector depends from manufacturing.

5. Industry in Europe: internationalisation and relocations Foreign Direct Investments : developed countries are the main recipients of European FDI. Follow the light. Trade: 76% with high/medium-high income countries. ERM 2002-2004: 7.2% of job reductions due to relocations (internal restructuring 76.8%) –Still: local and sectoral concentration can be very painful for the industrial fabric and related employment down the value chain

6. Industry in Europe: mixed performances (1) Various sectoral performances: –engineering, chemicals have substantial revealed comparative advantage and trade surplus vàv rest of world But the industrial structure of the EU economy as a whole makes it less than ideally positioned to face current challenges: –Eu trade is overall concentrated in sectors with med- high technologies and low to intermediate labour skills. –In EU: Lower share of ICT-producing sectors (fast growing) and lower ICT usage

7. II. WHAT DO WE DO? INDUSTRIAL POLICY IN EUROPE

8. systematic quantitative and qualitative screening of 27 industrial sectors in EU25 Identification of key policy issues for each sector -knowledge- environment & energy -better regulation- partic. in global markets - open & competitive markets - structural change THREATS OPPORTUNITIES POLICY CHALLENGES A screening of 27 industrial sectors …

9. Matrix approach leading to policy actions sectors KnowledgeRegulation SECTORAL ACTIONS R&DIPRInternal Market Pharmaceuticalsx Pharma Forum Defencex HLG Defence ……… CROSS SECTORAL INITIATIVES IPR Initiative challenges X X X X

10. 14 initiatives launched in 2005 CROSS-SECTORAL INITIATIVES IPR & Counterfeiting Initiative (2006) High Level Group on Competitiveness, Energy and Environment (2005) External Aspects of Competitiveness and Market Access (2006) New Legislative Simplification Programme (2005) Improving Sectoral Skills (2006) Managing Structural Change in Manufacturing (2005) An Integrated Approach to European Industrial Research and Innovation (2005) Pharmaceuticals Forum (2006) Mid-Term Review of Life Sciences & Biotech Strategy (2006) High Level Groups on Chemicals (2007) High Level Groups on Defence Industries (2006) European Space Programme Taskforce on ICT Competitiveness (2005/2006) Mechanical Engineering Policy Dialogue (2005/2006) SECTOR-SPECIFIC INITIATIVES

11. Managing Structural Change Work with DG REGIO – take into account structural change in the new programming period 2007-2013 Work with DG EMPL – EGF, Forum on Restructuring, Task force on Restructuring Link with other related initiatives such as skills.

12. III. CONCLUDING REMARKS

13. EGF: the role of DG ENTR Need to take into account the challenge of globalisation Objective: systematic and in depth expertise of industry and sectors Will be useful for industrial policy in general, and implementation of EGF in particular