When he presented the Europe 2020 strategy last week (3 March), European Commission President José Manuel Barroso  said it set out “what we need to do today and tomorrow to get Europe back on track”. Unless member states implemented the strategy’s recommendations with a “real sense of urgency”, the EU would not recover from the setbacks caused by the economic crisis, which, he said, had undone ten years of progress in growth, improving public finances and reducing the number of unemployed. 

The Europe 2020 strategy is based on what Barroso calls “three mutually reinforcing priorities”. These are: ‘smart growth’, or building an economy based on knowledge and innovation; ‘sustainable growth’, moving to a more resource-efficient, greener and more competitive economy; and ‘inclusive growth’, fostering a high-employment economy delivering welfare gains across society and different regions.

Innovation

Boosting the EU’s innovation performance will create new jobs in hi-tech industries, while developing energy-efficient and low-carbon technologies will, he said, make the EU a leader in the industries of tomorrow. Raising educational and training standards will improve people’s employment prospects and offer a way out of poverty, while providing the workforce that employers and businesses need to compete in the globalised economy. Improved energy efficiency will reduce production costs and cut the EU’s dependence on imported energy.

The Commission has proposed five headline targets for employment, innovation, climate and energy, education and poverty reduction. They are that: 75% of the population aged between 20 and 64 should be in work; 3% of the EU’s gross domestic product should be invested in research and development; greenhouse-gas emissions should be reduced by 20% by 2020; 20% of energy should come from renewable sources by 2020; and there should be 20 million fewer people in poverty.

The seven flagship initiatives

Industrial policy for globalisation

Challenge: to respond to the effects of the economic crisis on industry and small- and medium-sized enterprises.

The aim is to establish the framework for a modern industrial policy; to support entrepreneurship; to help industry adjust to new challenges; to promote the competitiveness of Europe’s primary, manufacturing and service industries and help those industries take advantage of the opportunities presented by globalisation and the green economy.

In particular, this involves the maintenance and development of a strong, competitive, diversified, more energy- and resource-efficient industrial base. To do this, a range of policy instruments are proposed, including ‘smart’ regulation, standard setting, and modernised rules on public procurement and competition, as well as efforts to reduce transaction costs, promote clusters and improve access to finance. Some sectors will need help restructuring, with skilled workers being re-deployed to emerging high-growth sectors and markets. Technologies and production methods that reduce the use of natural resource should be promoted. Steps are needed to improve transport and logistics networks, help small businesses compete internationally, and develop an effective space policy. Regulation should be reviewed to encourage resource efficiency, and European standards should be promoted as the basis for international standards.

Innovation Union

Challenge: the EU spends less of its gross domestic product (2%) than the US (2.6%) and Japan (3.4%).

Fact File

The aim is to refocus R&D and innovation policy on challenges such as climate change, energy security and resource efficiency, health and demographic change. The European Research Areas should be completed, focusing on the strategic research agenda, and there should be efforts to enhance EU-wide and regional programming. Conditions for businesses to innovate should be improved by agreeing the single EU patent, setting up a patent court, modernising copyrights and trademark rules, improving small businesses’ access to intellectual property protection and speeding up the setting of interoperable standards. The EU should launch “European Innovation Partnerships” between the EU and national levels to speed up development of technologies to address priority challenges. The EU will “strengthen” structural funding and R&D funding instruments so as to boost innovation, streamline administration and strengthen links between education, business research and innovation.

Youth on the move

Challenges: a quarter of pupils have poor reading skills and one in seven young people leaves education too early. Fewer than one person in three aged 25 to 34 has a university degree compared to 40% in the US and over 50% in Japan. Only two European universities are in the world top 20.

The aim is to improve the performance of higher-education institutions and to raise the quality of education and training at all levels by promoting student mobility and by improving employment prospects.

In particular, the EU intends to enhance its mobility, university and researchers’ programmes (Erasmus, Erasmus Mundi, Tempus and Marie Curie) and speed up the modernisation of higher education by benchmarking universities’ performance. Other initiatives include launching a youth employment framework, with policies that include work-experience schemes.

At a national level, investment should be more efficient, educational results need improving, the number of pupils who leave school early should be reduced, and education should be geared better to the needs of the labour market.

Resource efficiency

Challenges: To increase productivity, maintain Europe’s lead in the market for green technologies, boost resource efficiency throughout the economy, accelerate the reduction in greenhouse-gas emissions.

The aim is to boost the move to a resource efficient and low-carbon economy and decouple economic growth from resource and energy use.

The EU calculates that achieving its energy and climate goals could reduce gas and oil imports by €60 billion by 2020, while removing bottlenecks on the energy market could add 0.6%-0.8% to GDP. Boosting renewable energy’s share of the energy portfolio to 20% by 2020 could create more than 600,000 jobs, while energy-efficiency efforts could create one million jobs.

The EU intends to ensure that its financial instruments are deployed in a consistent funding strategy, and it wants to create a framework for the use of market-based instruments (such as emissions trading, revision of energy taxation, use of green procurement). Proposals will be needed to de-carbonise the transport sector; measures would include intelligent traffic management, lowering vehicle emissions, and promoting the technology and infrastructure for green cars. It wants to reduce transport bottlenecks, complete the creation of EU-wide energy markets, and upgrade Europe’s energy networks.

New skills and jobs

Challenge: Europe’s workforce is shrinking and only two-thirds of the working-age population is in work (the rate in the US and Japan is over 70%). The unemployment rate for young people is over 21%. Eighty million people have low or basic skills. By 2020, 16 million more jobs will require high qualifications and there will be 12 million fewer jobs for the low-skilled.

The aim is to modernise the labour markets in order to raise employment rates. People should acquire new skills to allow them to adapt to new conditions and career shifts.

The Commission will work to implement the second stage of its flexicurity agenda and will adapt the legislative framework to evolving work patterns. It should make more effort to supply and demand on the labour market by promoting a migration policy responsive to the needs of the labour market. There should be a commitment to the principle of life-long learning (including more flexible ‘learning pathways’) and to vocational education and training.

Digital agenda

Challenge: European companies have just one-quarter of the global market for information and communication technologies, which is valued at €2,000 billion a year. Europe is also falling behind on the deployment of high-speed internet.

Europe 2020 wants everyone to have broadband access by 2013. By 2020, everyone should have access to the internet at higher speeds (30 megabytes per second or above), with 50% or more of European households to have internet connections faster than 100 Mbps.

The Commission will work to create a legal framework to stimulate investment in an open high-speed infrastructure and to develop a policy that uses spectrum efficiently. It will also work to create a single market for online content and services. It wants a regulatory framework with clear rights regimes, multi-territorial licences, greater protection for rights-holders and support for the digitisation of Europe’s cultural heritage. Research and innovation efforts should reinforce strategic strengths and boost the potential of small- and medium-sized businesses. Digital literacy and accessibility should be promoted.

At a national level, governments should have high-speed internet strategies, co-ordinate public works to reduce the costs of network rollout, and take measures to promote online services (such as e-government, e-health, ‘smart’ homes, digital skills and security).

Platform against poverty

Challenge: eighty million people were at risk of poverty before the crisis and 8% of people currently in work do not earn enough to make it above the poverty threshold.

The aim is to ensure economic, social and territorial inclusion. The Commission will work to encourage co-operation, peer review and the exchange of best practice about programmes to reduce social exclusion and increase social protection. Programmes need to be developed that enhance deprived communities’ access to education, training and employment opportunities, with greater efforts to fight discrimination. A new agenda for the integration of migrants should be developed.

At the national level, governments should do more to define the needs of at-risk groups and implement appropriate measures, and should ensure that their social-security systems are providing the poor with proper access to income support and healthcare.

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