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Manufacturing Europe's Future. Bruegel Blueprint 21, 2 October 2013

Barbiero, Francesca and Blanga-Gubbay, Michael and Cipollone, Valeria and De Backer, Koen and Miroudot, Sébastien and Ragoussis, Alexandros and Sapir, André and Veugelers, Reinhilde and Vihriälä , Erkki and Wolff, Guntram B. and Zachmann, Georg (2013) Manufacturing Europe's Future. Bruegel Blueprint 21, 2 October 2013. [Policy Paper]

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    Abstract

    ‘Industrial policy is back!’ This is the message given in the European Commission’s October 2012 communication on industrial policy (COM (2012) 582 final), which seeks to reverse the declining role of the manufacturing industry, and increase its share of European Union GDP from about 16 percent currently to above 20 percent. Historical evidence suggests that the goal is unlikely to be achieved. Manufacturing’s share of GDP has decreased around the world over the last 30 years. Paradoxically, this relative decline has been a reflection of manufacturing’s strength. Higher productivity growth in manufacturing than in the economy overall resulted in relative decline. A strategy to reverse this trend and move to an industrial share of above 20 percent might therefore risk undermining the original strength of industry – higher productivity growth. This Blueprint therefore takes a different approach. It starts by looking in depth into the manufacturing sector and how it is developing. It emphasises the extent to which European industry has become integrated with other parts of the economy, in particular with the increasingly specialised services sector, and how both sectors depend on each other. It convincingly argues that industrial activity is increasingly spread through global value chains. As a result, employment in the sector has increasingly become highly skilled, while those parts of production for which high skill levels are not needed have been shifted to regions with lower labour costs.

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    Item Type: Policy Paper
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > industrial policy
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Bruegel (Brussels) > Blueprint Series
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 15 Jul 2014 14:29
    Number of Pages: 187
    Last Modified: 15 Jul 2014 17:18
    URI: http://aei.pitt.edu/id/eprint/52429

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