Manufacturing could play a key role in European growth
ETMM: Is there anything in the legislative pipeline that can help?
Kapp: The European Commission published a study in March this year on the competitiveness of the EU mechanical engineering industry, which includes a set of recommendations for policy-makers. The Commission is preparing to issue a Communication to determine priority policy actions for the implementation of the recommendations in this study. We expect the Commission to tackle problems such as access to finance for SMEs, weak domestic demand and investments, barriers to accessing high-growth markets outside Europe, and distortion of competition. As regards the last point, a Market Surveillance Package is in the legislative pipeline. The Commission’s proposal, which is due in the autumn 2012, aims at addressing the problem of ineffective market surveillance in the EU to prevent unfair competition caused by non-compliant products in the internal market.
The review of the Europe 2020 flagship initiative on industrial policy is also foreseen for autumn. We hope that the manufacturing industry and especially production technologies, which are crucial for the innovation capacity of Europe, will receive the attention they deserve. First and foremost, Europe has to develop a comprehensive long-term strategy for manufacturing to address the unfavourable economic climate in Europe which hurts manufacturers. The side-effects of this situation are getting increasingly costly for European manufacturers both in and outside Europe as it hampers their international competitiveness. Recently, Cecimo has repeatedly called on the EU to formulate a European vision on manufacturing. Political support and vision for manufacturing is important for engaging economic players and society as a whole to mobilize resources across Europe for developing advanced manufacturing industries.
ETMM: What are the most difficult problems facing manufacturers in Europe?
Kapp: The major market opportunities for European manufacturers are outside Europe, and mainly in emerging countries. Adapting to globalisation is a major challenge. European companies need to transform their organisational and business models so as to grasp the opportunities offered by high-growth regions. As the share of industrialising Asia in the consumption of machine tools increases at the expense of Europe, European machine tool companies need to adjust their organisation, products and manufacturing accordingly. This is a tough call, particularly for SMEs, which have traditionally been focused on the European market, and requires lots of effort and investment.
The distortion of the level playing field is another major problem. Whereas European manufacturers are struggling to get bank loans or to access export credits, competitors are receiving generous support from their governments. This makes the business proposals of some competitors more attractive to customers, as they benefit from better payment options. Moreover, it is a challenge for European companies to compete with large local companies owned or backed by their governments.