10. We consider that the following raises questions of political importance.
We make no recommendation for its further consideration, but suggest that it would be relevant to
any debate covering the competitiveness of European Industries:--
Department of Trade and Industry
(17630)
11377/96
COM(96)463 |
Commission Communication: Benchmarking the competitiveness of European
Industry. |
| Legal base: |
-- |
Background
10.1 This paper builds on various earlier Commission Communications which have
pointed out that the rate of structural unemployment in Europe is increasing regularly, that there
is a need to ensure a sufficient rate of net job creation to reverse this tendency, and that
improved competitiveness in the European economy is an important means to achieve that goal.
The Communication
10.2 In the Communication, the Commission suggests that the competitive performance
of European industry and services compares unfavourably with that of Europe's major global
competitors. It identifies the determinants of competitive performance as the efficient functioning
of markets and innovation. It sees the need for further liberalisation in the transport,
telecommunications, energy, and financial services and capital markets, as well for greater
flexibility in the labour market. It stresses skills, technology and quality as key elements of
innovation.
10.3 The Commission defines benchmarking as a tool to monitor progress against
continuously improving best practice world-wide. In an Explanatory Memorandum, dated 6 December,
the Minister for Industry (Mr Knight) tells us that the Communication:
"goes on to propose a programme of benchmarking of European competitiveness. This is
approached at three levels:
-- at the enterprise level -- to encourage enterprises, particularly small and
medium sized enterprises, to undertake benchmarking;
-- at the sector level -- a natural extension of enterprise benchmarking which
would enable the Commission to monitor on a continuing basis the ability of European industries to
respond to international competition; and
-- at the level of framework conditions -- benchmarks can be developed to
appraise the performance of key elements of the framework conditions for industry. These enable
an evaluation to be made of the attractiveness of Europe as a place to do business."
10.4 The Communication concludes by inviting the Council and the European Parliament
to endorse the Commission's analysis of competitiveness of which, it says, the main points are:
-- "while the situation of the European economy presents a number of areas
of strength, the European Union is not exploiting its full potential or meeting the performance of
its major competitors in terms of living standards, productivity and employment creation, leading
to idle resources and high rates of unemployment;
-- inadequate performance is also reflected by weak growth in industrial value
added, low profitability and falling share of exports from developed countries;
-- high costs and low investment, especially intangible investment, combine to
depress industrial performance;
-- public deficits remain too high and expenditure too concentrated on transfers
and consumption with insufficient levels of public investment in both infrastructure and intangible
investment. The level of public deficits exerts pressure on interest rates and siphons off
available savings;
-- continue to control state aids with the objective of reducing overall levels
of state aid and reliance by firms on public support;
-- in spite of some very well functioning education and training systems in
Europe, lifelong learning and permanent upgrading of human resources still has some way to go in
order to reach the highest levels in most Member States;
-- Europe's research base is insufficiently market oriented and close integration
with industry is needed at the same time as spending on research is insufficient and the take up
of new technologies is slow;
-- the adoption of new technologies remains too slow, particularly in areas
relating to the Information Society;
-- financing of innovation remains a specific problem in Europe;
-- quality in all its aspects represents an essential element for improving
competitiveness and adaptive organisations are required in order to introduce quality management
and speed up the process of innovation."
10.5 The Commission also proposes that the Council and the Parliament support the
value of benchmarking as a tool for identifying the underlying reasons for poor competitive
performance; and a European quality promotion policy to reinforce the competitiveness of European
enterprises.
The Government's view
10.6 The Minister says in his Memorandum that the principle of EU action on
benchmarking is supported by the UK. He also says that on 14 November the Council of Ministers
adopted conclusions asking the Commission to take forward work in this field in consultation with
Member States.
Conclusion
10.7 The competitiveness of industry is itself a matter of political importance
and the Commission's Communication is undoubtedly a further contribution to the debate on how it
might be improved. It is not a proposal for legislation and, although it may lead to further work
on benchmarking, it serves a useful purpose in identifying some of the areas in which the root
causes of lack of competitiveness are to be found.
10.8 We see no reason to recommend a debate on the Communication, but we suggest
that it would be relevant to any debate covering the competitiveness of industry and services in
the European Union.
|
