The policy priorities of Elżbieta Bieńkowska, European Commissioner for Internal Market, Industry, Entrepreneurship and SMEs are explored here, with a special focus on moving towards a sustainable Common Industrial Policy across Europe
In a keynote speech at EU Industry Days 2019 in February, Elżbieta Bieńkowska reveals her thoughts on why moving towards a sustainable Common Industrial Policy is a joint responsibility. In her opening remarks, she highlights that in Europe the economies are changing at a very rapid pace but that the digital revolution offers massive opportunities for firms to be more efficient.
As well as the offer of new products and services, Commissioner Bieńkowska stresses that it presents new opportunities for citizens, such as more and better jobs and most importantly, improvements in the lives of people such as e-health and treatments for illnesses at a much lower cost.
The Single Market: Opportunities and challenges
It is Commissioner Bieńkowska’s belief that today, Europe is in a strong position because of the Single Market. While it is the most important asset to help companies to be resilient, we find out that many in Europe do not see the future as a bright one. She explains this point further in her speech.
“There are many who fear that they will become victims of this change, their job replaced by a robot or their company relocated. When we talk about opportunities, they ask whether these are limited to those that meet in Davos. When we talk about digital innovation, they worry about data privacy and data leaks.
“And think about young students protesting to speed up action against climate change. Some of our global counterparts answer these fears with new tariffs, new subsidies, breaking international rules.
“Renationalisation and protectionism, building walls around their countries and their ailing industries. We are not immune from that sentiment in parts of Europe.”
She adds that today, there are now more barriers in the Single Market than ten years ago. In this vein, she paints a picture of fears and frustrations that cannot be ignored and as such, she says it is important to listen more to citizens and address their concerns. It’s vital that citizens trust both government and industry, Commissioner Bieńkowska’s stresses. In her speech, she outlines more of these frustrations in her own words.
“When our citizens complain about certain large corporations evading taxes, they are right. When our citizens get angry about car manufacturers installing cheat devices, I agree. When they say that globalisation is littering our oceans and is polluting our air, they deserve action.
“We need a balance between encouraging digital transformation, innovation and globalisation on the one side. And ensuring that the benefits are felt by all our citizens, that rules are fair and that business is sustainable on the other.”
The response of the European Commission
In terms of how the European Commission is responding to the aforementioned concerns, Commissioner Bieńkowska believes that progress has been made. She goes on to say that for the very first time, the European Commission has adopted an integrated approach to industrial policy, that links together the areas of investment, innovation, skills, decarbonisation and of course, the Single Market.
She adds that in addition to promoting digital transformation, the European Commission is, for example, doing more on standardisation to make European values into global standards. She highlights what has been achieved with Eco-design and REACH, as well as tapping the potential of artificial intelligence (AI) and other areas in her own words.
“On globalisation, we have presented a proposal for a European framework to screen foreign direct investment. We are working to reform the multilateral trading system “And we are increasing access to third-country markets. As you know the Japan-EU free trade agreement just entered into force. But perhaps the biggest shift has been towards decarbonisation, circularity and sustainability.
“Look at the Battery Alliance. Europe needs to invest in a competitive and sustainable battery industry. We need large investments in several EU countries. So this Alliance is about joining forces with Member States and industry.”
The need for more action
Commissioner Bieńkowska’s then underscores the need for further action, commenting that while voluntary approaches sometimes work, more effective enforcement is often a better tool. As such, she says that the European Commission should not shy away from regulating where it is both necessary and proportionate. In this vein, she reveals some really important priorities.
“We must tackle the digital threats and move to a true Security Union. We must be in full control of our telecom and internet networks. We must be prepared against hybrid warfare. We must enforce the GDPR. We must resolve data ownership in areas such as car data and medical data. Tech companies must play their full role.”
She then turns her thoughts to focus on globalisation, explaining the importance of preserving the benefits of openness, while mitigating its side effects. While all international partners must abide by the same rules, Commissioner Bieńkowska makes it clear that China is the elephant in the room. We find out that while China is a member of The World Trade Organization (WTO), it is not a part of the Global Procurement Agreement. She then remarks in her own words how this can be addressed in Europe.
“To address this in Europe, I call upon the Council to move forward with the International Procurement Instrument. We have to give Member States the tools to defend themselves.
“Europe welcomes Foreign Direct Investment, but we cannot be naïve. We cannot allow investments to threaten our political system and our security.
“Our EU FDI screening is probably just the first step. All Member States should have the possibility to block FDI on national security interests. We are not yet there.”
Commissioner Bieńkowska then adds that globalisation also means working with other countries, such as Australia, Canada and Japan – plus doing more when it comes to the all-important areas of decarbonisation, sustainability and circularity which pose a challenge, as well as an opportunity.
The crux of Commissioner Bieńkowska’s message is that while industrial policy can be an engine of convergence, the EU cannot deliver this on its own. Certainly, a Common Industrial Policy means that no region or worker will be left behind. She then explains more about how the European Commission will be helping the regions.
“Regions know best how to help themselves if we enable them. Each region must have enough leeway and resources to do what they know best.
“We must support them in their transition, to make sure no region perceives the Single Market as making them worse off. To provide their workers with the right skills for the future. Our Smart Specialisation Strategy is just about this.”
Commissioner Bieńkowska believes it is important to be strategic, which defined precisely means shifting from state aid control to state aid policy that focusses on strategic value chains.
“We have to protect these value chains with trade defence instruments and FDI screening. We already identified the strategic value chains: High-Performance Computing, batteries and microelectronics. During the Industry Days, we will unveil our additional proposals.”
In closing, Commissioner Bieńkowska shares her thoughts on her desire for Europe to produce zero-emission cars. In this spirit, she calls for incentives to develop clean production technologies rather than bans.
“I want innovation and technology to be the solution and to pave the way to sustainability. We need artificial intelligence to reduce greenhouse gases by managing traffic flows.
“We need renewable bio-based materials that make our industries globally competitive. Our circular economy strategy is just about this.
Our long-term energy and climate strategy was written in this spirit.”
Her last point is all about making industry responsible, in that they should provide economic leadership and innovation. Let’s close this glimpse into industrial policy by reflecting on the words of Commissioner Bieńkowska, who stresses that industry must place sustainability at the heart of its strategy and operations, as opposed to just being an add-on label. She comments it is about business taking legitimate commercial decisions in a manner that respects the environment, human rights, society, and most importantly, European values. It’s vital that the industry pays its fair share of taxes and by doing so, this ensures sustainable growth and profits, as well as new market opportunities.
“The Common Industrial Policy will deliver on convergence. And European industry will take the global leadership and shape this industrial revolution to the benefit of our societies.”
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