Reasserting the differentiators of European competitiveness – CLEPA Newsletter Editorial April 2019

What are the key differentiators if Europe wants to stay competitive in the global arena? How to lead in an age where complexity reigns, and where efforts – research and investments, both public and private – must be dispersed over many priorities? How to strengthen and defend a sustainable model for economic growth, incorporating high standards and high values; a system that works for many, not just the few?

Politicians, industries and others in society are grappling with these questions in the face of substantial challenges and change, and particularly so in Europe, increasingly squeezed by pressures from within as well as from outside, and with elections in short view.

Part of the answer, it seems, lies in reassertion: the deliberate recalling of the values of the European Union, of democracy and human rights, of rules-based and frictionless trade. And for industry, too, the need to reassert what lies at the base of its competitive manufacturing model: excellence, innovation, high standards, highly-skilled and educated people.

Reassertion will help to restore confidence, and may contribute to a renewed sense of purpose, of unity. But the main challenges of today – globalisation, climate change mitigation, and digitalisation – demand other answers as well. Here’s how one executive from a leading automotive supplier summarised it recently: our world has moved from being complicated to being complex.

As management theory has it, this is relevant because while ‘complicated’ may sound, well, complicated, it actually typecasts quite solvable challenges of independent issues, single actors, predictable outcomes and repeatable solutions. In contrast in a complex environment, issues and actors are typically interdependent, outcomes unpredictable or at least multiple, and the resulting eco-system must be managed with flexibility, allowing for learning-by-doing and adapting to new insights.

Our world has moved from being complicated to being complex

The automotive industry feels this new age both at the environmental as well as the digital front. In neither field, technology is the main denominator any longer for society to reap their full benefits. Of course, automotive suppliers have multiple technology solutions on offer, this is their core business. But the transformation of mobility takes a concerted effort of many actors to become successful. It takes investments in recharging stations, natural gas, hydrogen and e-fuels. It requires investments in digital networks for connectivity and mobility services. It demands a consumer mind-set change towards green, shared, on-demand or otherwise more usage-tailored mobility. It needs more harmonised traffic and city access, taxation and incentive policies to put all the available technology to the best possible use, efficiently and effectively.

In today’s complex world, working together is the name of the game, in eco-systems and coalitions that can be very different depending on the issue at hand. This is true for policy makers and industry actors alike. Working together means pooling resources in a variety of ways: financially, with the funding of fundamental research and pre-competitive innovation (take artificial intelligence, or the next generation of battery technology), or structurally, with partnerships between start-ups and established players, tech and traditional industries, public and private actors, and local, regional, national and European or even international levels.

Europe, in spite of appearances or rhetoric, is good at collaboration and – at both political and industrial level – trained in managing complexity. And there is learning-by-doing potential too, taking example from the speed that other regions apply to adjust. Europe could become better at continuously adapting the educational and academic backbone, making the regulatory framework more flexible, or in bringing innovations to market, incubating quickly, transforming ideas into market volumes.

In the same spirit, Europe could pull more weight, globally, building on the inward integrating force it was established to be. When it comes to policy, this means pooling resources as Europe-of-one, not 28, agreeing common investment priorities, financing key infrastructure projects, overcoming fragmentation. And it means more staunchly demanding reciprocity for market access in terms of standards and environmental norms, intellectual property rights and competition rules, to both promote and defend what’s worth reasserting.

Sigrid de Vries, CLEPA Secretary General


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