A REINDUSTRIALIZATION OF THE EU?

EU INDUSTRIAL REVOLUTION TARGETS CHINA

Ann Cahill

Irish Examiner, October 11, 2012

Europe’s third industrial revolution has been launched, aimed at winning back manufacturing from China and creating more jobs in crisis-hit economies, though Ireland already exceeds the EU’s target.

There will be pressure on productivity and wages if jobs are to be taken back from low-cost developing countries, though the cost of labour in China, the EU’s biggest competitor, is rising, said Industry Commissioner Antonio Tajani.

The Central Bank recently said wages need to drop by 10% to compete.

A bigger share of products made in Europe use components imported from China than any of the other leading industrial blocs, according to the latest figures.

For most countries, services have taken over as the biggest driver of growth and employment, as just a few years ago the policymakers declared the mark of a sophisticated economy.

As a result, just over 15% of Europe’s GDP comes from manufacturing and the target for 2020 is 20%. Ireland ranks second highest, behind Slovakia with 26% of its GDP coming from this sector, but higher than Germany’s 20%, while France and Britain are at 10%.

However, this does not register value of imports, such as raw chemicals used in Ireland’s massive export pharmaceutical sector, or components for technology products such as chips.

Mr Tajani announced a number of actions to, for example, stimulate investment in new technologies, improve the business environment, allow access to markets and finance, particularly for SMEs, and 0ensure skills meet industry needs.

"We cannot continue to let our industry leave Europe," he said.

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