by KG/EUROPA EU manufacturing possesses a number of competitive strengths that should be leveraged to promote economic growth, despite the current difficult economic environment. This is the conclusion of the two reports on industrial competitiveness released by the Commission today. However to ensure that growth does not stall, the EU and Member States urgently need to address a number of areas of concern: investment, access to finance, public administration, access to foreign markets, innovation and energy prices. European Commissioner for Industry and Entrepreneurship Ferdinando Nelli Feroci, commented: "I appreciate the efforts made by Member States to improve their industrial competitiveness. However, a lot still needs to be done. Tackling lack of investment, limited access to finance, high energy prices and inefficient public administration will put our companies and SMEs in a stronger position to compete in the global market place." Industrial competitiveness varies widely per Member State Looking at how well the Member States are doing, and whether they are improving or not, four groups emerge: Member States with high and improving competitiveness: the Netherlands, Germany, Denmark and Ireland. Member States with high but stagnating or declining competitiveness: Belgium, the United Kingdom, Austria, France, Italy, Luxembourg, Sweden and Finland. Member States with modest but improving competitiveness: Estonia, Lithuania, Spain, Latvia, Czech Republic, Hungary, Poland, Portugal, Romania, Slovakia and Greece. Member States with modest and stagnating or declining competitiveness: Slovenia, Bulgaria, Croatia, Malta and Cyprus. The EU has competitive strengths… Overall, the EU’s competitive strengths in manufacturing remain intact: highly skilled workers, high domestic content of export goods, and comparative advantages linked to complex and high-quality products. EU Member States have also implemented a range of policies to increase competitiveness over the period since the start of the crisis in 2008. ...but some policy areas need ongoing attention Analysis of the data produced by both reports indicates that the following areas need to be considered for potential policy action Additional investment is needed across all sectors to ensure that European industry can maintain its competitiveness. Small and young firms find it more difficult to obtain bank credit compared to other firms, even if their financial performance is the same. Competitiveness is supported by more efficient innovation and commercialisation of research, and access to highly-skilled labour. Competitiveness requires reducing costs and uncertainties for businesses when dealing with public administration. Increasing the efficiency of public administration induces higher numbers of fast-growing firms, in particular by increasing firm’s financial turnover. Time-consuming and costly tax rules, corruption and ineffective justice systems are the most detrimental to firms' growth. Most Member States also need to better take into account the effects of rules and legislation in other fields on competitiveness. Support is needed to help internationalisation of SMEs. Currently, smaller and younger firms are less likely to enter foreign markets and reap the associated benefits. Policies targeting the business environment with respect to access to capital, skills support for innovation and actions to enhance productivity are important to help small firms expand exports Competitiveness is negatively affected by electricity and gas prices which are higher in the EU than in a number of other economies. Energy efficiency improvements have not fully offset the negative impact of increasing prices. Efficient markets for electricity and diversified energy sources are therefore needed to ensure that energy is available at a competitive price.
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