EU prioritises skills, investment in technology and innovation in its industrial strategy focused on a strong and fair green and digital transition.
Following the publication of the EU Green Deal (see SwissCore article) and Digital Strategy (see SwissCore article) over the past months, the European Commission (EC) has now unveiled their broader industrial strategy. In it, the EC addresses the twin challenges of the green and digital transitions while ensuring EU global competitiveness. Competitiveness will be promoted through European leadership in the green and digital spheres, as well as through competition policy and strengthening the single market. However, it is now also to serve the specific priority of technology sovereignty: ensuring that the EU maintains the capacity to produce, regulate and use new generations of technologies independently, and in accordance with European values. Education, research, innovation, and investment in new technologies are highlighted as core instruments in achieving these goals.
The package of policy documents include an overarching industrial strategy, along with a specific SME strategy, and two policy documents on improving the regulation of the single market. On 11 March, the EC adopted a related communication, updating its Circular Economy Action Plan. The new strategy centres on industrial ecosystems, alliances that bring together public and private actors along whole value chains, to implement the green and digital transformations. These ecosystems are to facilitate coordinated research, innovation and regulatory initiatives and stimulate private investment through public support and incentives. EC states that “Initiatives known as industrial alliances have produced good results in batteries, plastics, and microelectronics. Now it is time to extend this idea to other key technologies and business areas”. A new European Clean Hydrogen Alliance has been announced and others on low-carbon industries, industrial clouds and platforms, and raw materials are planned.
Such alliances are related to another framework that enables increased cooperation among private and public actors: Important Projects of Common European Interest (IPCEI) (see SwissCore article). They are a catalyst for investment and allow Member States to fund large-scale innovation projects across borders which could otherwise not be funded due to EU limits on state aid to industry. As part of the strategy, state aid rules will be revised to ease the implementation of IPCEIs and ease participation for SMEs. The strategy will be implemented through an open and inclusive industrial Forum, to be set up by September 2020, consisting of representatives from industry, including SMEs, big companies, social partners, researchers, as well as Member States and EU institutions.
In order to alleviate the impact of the green transition on carbon-intensive regions, the EC already announced earlier this year a Just Transition Mechanism that plans to mobilise EUR 100 billion over the period 2021-2027, to provide financing for companies and public works, infrastructure, and technical assistance. It will be implemented by the European Investment Bank through the InvestEU programme, and a dedicated Just Transition Fund. Another supporting mechanism to finance the innovations necessary to the green transition is the EU Emissions Trading System Innovation Fund. It will provide financing to de-risk the research and development of innovative low-carbon technologies.
The SME strategy will support SMEs in managing these transitions by helping with capacity building, eased financing, and regulatory reforms. A high-level SME Envoy will give SMEs a voice in future EU legislative initiatives and coordinate with the existing network of national SME envoys. Dedicated sustainability advisors will be added to the Enterprise Europe Network. Digital Innovation Hubs (DIH) – to be funded under the planned Digital Europe Programme (DEP) – will increase adoption of new technologies by SMEs. The funding landscape for SMEs will also be improved, as the existing EIB and EIF programmes for risk financing are streamlined and ramped up. Additionally, the European Innovation Council will be fully launched under Horizon Europe (see SwissCore article). It will be complemented by growth-stage funding facilitated through the European Scale-Up Action for Risk Capital (ESCALAR) initiative building on the VentureEU programme, and a planned IPO fund for fast-growing technology companies (in InvestEU), as well as a revamped Capital Markets Union Action Plan.
Meeting the challenge of these twin digital and green transitions will also require action on skills, both in the broader industrial strategy and in the SME strategy. Through the DEP, EC will develop digital crash courses for SME employees allowing them to work proficiently with AI, cybersecurity or blockchain technologies. A programme of “Digital Volunteers” will allow skilled young people and seniors to help traditional businesses adapt to the digital transition. More broadly, the forthcoming update to the Skills Agenda for Europe will seek to modernise vocational education and training, so that large industry and SMEs have access to the skilled workforce they need. Member States, industry, social partners and other stakeholders will be invited to contribute, through a new ‘Pact for Skills’, to up- and reskill the workforce and to unlock relevant public and private investment. The Pact will put focus on sectors with high growth potential for Europe or those undergoing the most significant change. The European Education Area will also support these efforts.