Speech Olli Rehn: "Perspectieven op de uitvoering van de agenda van Lissabon" (en)
Mr Olli Rehn
Member of the European Commission, responsible for Enterprise and the Information Society
"Views on the mid-term review of Lisbon"
The informal dinner of the Competitiveness Council
Brussels, 23nd September 2004
Thank you for giving me the opportunity to express some views on the mid-term review of Lisbon. I can rely on the discussion of last week-end in Leuven, where the designated Barroso Commission met.
In his conclusions, the Commission President-Designate Barroso made it clear that competitiveness and growth will be the foremost priority of his Commission. Not for its own sake, but because economic growth facilitates a high quality of life. It is a matter of the survival of the European model by reforming it. The stakes are raised by the double challenge of globalisation and ageing of the population.
In my view, European industrial policy should focus on maintaining our industrial competitiveness through a whole range of policies - such as rigorous competition policy, increased investment in innovation and knowledge, balanced cohesion policies, and such trade policy that ensures market access for our companies.
Our new industrial policy is far from the old one, where the state picked winners - or sustained losers. New industrial policy merges a horizontal approach and sectoral analysis. We need to work with individual sectors - such as pharmaceuticals, shipbuilding, aeronautics, automotive, forestry, telecoms, biotech and textiles - to understand how our policies affect their competitiveness.
On textiles, on 13 October, my colleague Pascal Lamy and I will issue a Communication on the specific situation of this sector and the suggested responses to increased competition from China.
Our forthcoming Competitiveness report will throw light to many of our industrial challenges. I want to point out three most burning ones.
Firstly, the rise of China is changing its nature. China has steadily moved from an exporter of labour-intensive products, benefiting of its low cost labour, to more technology-driven products. In 2002, these represented 32% of China's exports to the EU, up from 19% in 1995. This is bound to increase as the number of engineering and science graduates in China continues to grow rapidly and outperform that of Europe.
Secondly, public policies are crucial in raising business R&D investment. Evidence from aggregate EU-15 data shows that an increase of € 1 in government-funded business R&D produces an additional € 0.93 in domestic business R&D spending. In other words, one public euro brings total two R&D euros investment.
Thirdly, we now have more evidence than ever before on the positive contribution of the production and diffusion of ICTs on productivity growth. Benefits are achieved when ICTs are used to facilitate `back-office' reorganisation and accompanied by investment in the retraining of staff. ICTs are therefore an important tool to enhance efficiency both in the private and the public sector. For these reasons it seems clear to me that Europe will have to reinforce the emphasis on the Information Society Technologies in the review of the Lisbon strategy.
Future Commission and Review of the Lisbon Strategy
One of the new Commission's first key responsibilities and main priorities will be the mid-term review of the Lisbon strategy.
Although the debate on this issue is only starting, I would like to make some preliminary remarks:
Firstly we may have set ourselves too many targets. In my view it could be useful to streamline the strategy and better prioritise between our different objectives.
Secondly there could be a case of carrying out an assessment of the achievements of the open method of coordination so that we can better identify its strengths and weaknesses. This could give hints as to what can be done to improve its usefulness and whether there are areas where it is more useful than others.
Thirdly we will need to also ask ourselves whether the Commission has made full use of the instruments at its disposal under the Treaty in pursuing the objectives set in Lisbon. Is there a case for doing more?
But as I said, this debate is only starting, and it will need to be conducted in close connection with all interested actors. The work of the Kok Group about which we heard this evening will play an important role in this discussion. The Commission looks forward to receiving its report and subsequently developing its policy initiatives.
Role of the Competitiveness Council
An enhanced role of the Competitiveness Council is crucial to bring about progress and to drive forward the Lisbon agenda.
The Competitiveness Council has an important horizontal role to play. It should look into the competitiveness impacts of proposals that are outside its own direct remit. For example, in the context of next year's Spring European Council discussions on medium and longer term emission reduction strategies, the Council could make an important input to the discussions on the competitiveness aspects.
We have indeed a major common challenge in better regulation, which I fully endorse. When we regulate, we must learn to enact clear and predictable rules, which safeguard public policy values and which put a minimum burden on business and their capacity to innovate.
In this regard, President-Designate Barroso has given an important signal by creating the Group of Commissioners on Competitiveness. It will be chaired by Vice President-Designate Verheugen. The group will ensure that the respective EU policies are properly coordinated with the competitiveness objective - and better regulation - in mind.
In this spirit, I trust the Council and Commission can together find ways to reinforce the competitiveness dimension and become more and more effective in practicing what we preach in better regulation.