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Law for Business

Knowhow - guidance - precedents

15 OCT 2012

EU plans for future growth


Two recent announcements from the EU indicate that whilst minds remain focussed on a solution to the Eurozone debt crisis and the demands placed on Greece and Spain, EU strategists are already looking towards a more positive future. The most recent announcement from Antonio Tajani, Vice President of  the European Commission and Commissioner for Industry and Entrepreneurship, stemming no doubt from the impressive economic growth figures of China in recent years, is a plan by the EU to regain some of its industrial competitiveness. Regarded as a fundamental element of a sustainable long term strategy, manufacturing has inevitably suffered heavily in Europe from movements to cheaper global manufacturing locations and less expensive labour markets. Now, as inflation and wage costs rise in these economies and global manufacturing re-aligns itself, the EU is seeking to boost its industrial capacity for the future.

According to Mr Tajani, Europe is a world-leader in many strategic sectors such as automotive, aeronautics, engineering, space, chemicals and pharmaceuticals. Industry still accounts for 4/5 of Europe's exports and 80% of both Europe's exports and of private sector R&D investment comes from manufacturing.

The EU therefore intends to re-build industrial policy around 4 key areas or pillars:

Investments in innovation - focussing on  advanced manufacturing technologies for clean production, key enabling technologies, bio-based product markets, sustainable industrial policy, construction and raw materials, clean vehicles and vessels and smart grids.

Better market conditions - improving the internal market for goods, promoting the digital single market, protecting IP rights and promoting EU SMEs around the world.

Access to finance and capitals - better mobilising and targeting public resources, including those of the European Investment Bank and removing obstacles to cross border operations for private venture capital funds.

Human capital and skills - equipping the EU labour force for industrial transformation through the creation of the European Sector Skills Councils and Knowledge and Sectors Skills Alliances.

An entirely different initiative is the move towards cloud computing where not just data but application and operating software is stored at remote server locations and accessed over the internet. Many users and organisations have already identified the potentially large savings that can be made by dispensing with much of their own hardware and server costs and creating greater flexibility to work.

The EU has seized on this technology as a means of injecting growth into the EU economy which it says has the potential to increase EU GDP by up to 20% over the period 2015 to 2020, creating millions of jobs in the process. Some are sceptical over this claim: whether cloud computing would create incremental growth or replace existing IT capacity in the market is hotly debated and there are of course significant data security issues to resolve for this technology to take off.

Nevertheless within the EU some blue sky thinking is clearly going on. Not before time, some would say.

Mishail Dusad
Senior Solicitor

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