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Regional innovation ecosystems are the key to higher competitiveness and strategic autonomy of European industry  

The EU needs a strategy that can help industry to reduce greenhouse gas emissions and reach climate-neutrality at the same time as helping to recover from the pressures of the COVID-19 pandemic.  A set of concrete measures on how this can be achieved – including strengthening the role of SMEs and the territorial dimension of the EU's industrial strategy, pushing for place-based innovation policies, smart specialisation strategies and closer links between industrial and regional ecosystems – were adopted today by the European Committee of the Regions in its opinion 'Updating the 2020 New Industrial Strategy: Building a stronger Single Market for Europe's recovery'.

In the opinion, the EU's assembly of cities and regions puts forward concrete proposals to revitalise European industry and reinforce the role of local and regional authorities in strengthening industrial ecosystems in order to boost competitiveness and the EU's strategic autonomy. The adopted opinion contributes to the European Commission's Communication 'Updating the 2020 New Industrial Strategy: Building a stronger Single Market for Europe’s recovery' published on 5 May 2021.

Rapporteur Jeannette Baljeu (NL/Renew Europe), Member of the Council of the Province of Zuid-Holland, said: "We must reinforce the territorial dimension of Europe's industrial strategy. Cities and regions hold important competencies linked to industrial development. Europe must give them the tools to take ownership of the twin digital and green transitions. Turning innovations into marketable products faster and upskilling our workforce is a must to raise competitiveness and create new jobs that contribute to the EU4s recovery from COVID-19. We also need to revise the EU's state aid rules in order to support the transition of energy-intensive and foreign-trade industries. We will not achieve the objectives of the European Green Deal without a decarbonised and sustainable European industry".

MEP Tom Berendsen (EPP) intervened during the debate, stressing that: "To decarbonise the European industry, we need a massive roll-out of renewable and low carbon energy. We also need massive investments in infrastructure. I am a strong believer of the strength of regions, cities and local communities and the role they can play in shaping the right policy that works for citizens and business all over Europe. That role is also crucial in industrial policy. Regional innovation strategies, smart specialisation and a placed based approach to industry is essential to successfully deliver the twin green and digital transitions of European industry". 

The Committee calls on the European Commission to include the local and regional level in the future design of the new EU industrial strategy. In order to ensure better coordination for the sustainable transition of European industries, the CoR proposes setting up a strategic dialogue to improve the links between industrial and regional ecosystems and recalls the need to maximise the potential of smart specialisation strategies as the best tool for industrial modernisation anchored in the added value of every territory.

The key role played by SMEs in the EU was highlighted in the opinion, which calls for specific support for SMEs to bridge the digital divide. Further investment in testing and validation infrastructures such as Industry 4.0, test centres, pilot factories and Digital Innovation Hubs (DIHs) is also needed, according to the CoR, if we want to be able to bring innovative products and services to markets faster.

The European Commission's new tool to identify strategic dependencies and address them through public procurement was welcomed by CoR members, although they stressed that a mechanism was needed urgently to asses and prevent that the takeover of European companies, in particular unlisted SMEs in strategic sectors.

The Committee also stressed the need to recalibrate the EU's state aid framework in order to support the transition of energy-intensive and foreign-trade dependent commodity industries, and for greater compatibility between EU and national funding programmes.

The EU's assembly of local and regional authorities also called on all private companies to ensure gender parity at all levels of management, and for the EU to support the retraining of the workforce in new skills on a regional scale and across sectors. The Committee recalled that the EU is far from reaching the target of 3% GDP investment in R&D&I, stressing some EU member states are still below 1%.


Regions are crucial in shaping the new EU Industrial Strategy. Read here the interview with rapporteur Jeannette Baljeu (NL/Renew Europe).

The COVID-19 crisis has strongly affected the EU economy. Its impact varies across ecosystems and companies’ size. The crisis exposed the interdependence of global value chains and demonstrated the critical role of a globally integrated and well-functioning Single Market. The European Commission publishes the following figures showing the impact of COVID-19:

  • 6.3% decline of EU economy
  • 60% of SMEs reported a fall in turnover in 2020
  • 24% fall in intra-EU trade in Q2 & Q3 in 2020
  • 1.7% SME employment decrease in 2020 - 1.4 million jobs
  • 45%of firms expected to reduce investment in 2021​

The European Commission indicates 14 industrial ecosystems: aerospace and defence, agri-food, construction, cultural and creative industries, digital, electronics, energy intensive industries, energy-renewables, health, mobility – transport – automotive, proximity, social economy and civil security, retail, textile and tourism. Source: European Commission.

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