The European Parliament,

- having regard to the Commission Communication (COM(90) 556 final) approved by the Council of Industry Ministers on 26 November 1990 and the communication of 26 March 1991 on the European electronics and informatics industry,

- having regard to the report of the Committee on Economic and Monetary Affairs and Industrial Policy (A3-0177/91),

The need for a Community industrial policy

1. Notes, given the increasing trend towards an open, global economy, that competitiveness has become the key requirement for undertakings and national economies;

2. Notes, therefore, that if the vital objective of channelling this competitiveness is to be met, 'the concept of a modern industrial policy for the Community' must be clarified, as the Commission stated in its recent Communication;

3. Considers, therefore, that the requirement of competitiveness, albeit stimulated primarily by the free market, nevertheless calls for the implementation of an active industrial policy;

4. Notes that the constraints imposed by competitiveness are serving to reaffirm the relevance of a Community industrial policy, particularly in the light of:

- the severe crisis of competitiveness affecting certain strategic sectors of Community industry;

- the intensity of international competition especially from the United States, Japan and the Pacific rim countries;

- divergences between the industrial policies pursued by the Member States and the need to identify more clearly and meet the Community interest in response to the strategies employed by the Community's main competitors;

- the wide disparities in development in the Community;

- the interests of consumers;

Regards, therefore, a successful conclusion to the Uruguay Round of GATT as absolutely essential;

5. Reaffirms, at the same time, that the Community has powers, where compatible with its competition and anti-trust laws, to:

- create an open environment conducive to industrial development, i.e. the single internal market;

- introduce a range of catalysts to speed up the structural adjustment brought about by competitive industrial policies and help achieve the objectives of Community policy;

The objectives of a Community industrial policy

6. Considers therefore, that there is a vital need for a structured, coherent Community industrial policy based on a clear-sighted analysis of its objectives;

7. Takes the view, however, that the constraints imposed by that economic model, which are restricting and damaging in certain respects and which frequently culminate in an endless, futile economic struggle, do not rule out using an industrial model, which, while holding to the requirement of competitiveness, takes greater account of interdependencies and objectives;

8. Considers it to be the task of the State to create the framework for socially and environmentally sustainable industrial development;

9. Regards the immediate objectives of a Community industrial policy as being primarily economic in nature, i.e.

- securing the highest possible rates of growth and employment, both of which are vital to the success of the Community economic and social integration process and the achievement of economic and social cohesion;

- stable price levels and balance of external trade;

- maintaining the Community's competitiveness in the area of high technology so that it does not become a subcontractor for competing powers;

- ensuring that the Community plays an active, pioneering role in the third industrial revolution; otherwise, the combination of its technological decline and falling population will inevitably lead to a disastrous loss of influence on the world scene;

10. Stresses that a modern industrial policy must seek to devise a model which combines productivity and flexibility with respect for the social values reaffirmed by the Community Charter of Fundamental Social Rights, that state guidelines can contribute to an improvement in the investment climate, and considers a targeted location policy to be important. This should be supported in the framework of economic and social cohesion and by Community measures such as Community technology policy;

11. Stresses the need to take account of the aim of economic and social cohesion when industrial policy is being developed and, in accordance with social and regional policy, to help to reduce the current differences in the development of the Europe of the Twelve;

12. Expresses concern that the Community's insufficiently active industrial policies are currently at variance with the moves to complete the internal market when the common industrial policy should be one of the main areas of European integration alongside Economic and Monetary Union; the success of European industrial policy depends, in particular, on the survival of the European model of 'sustainable growth', the independence and security of the Community and the spread of its political and cultural values;

The main components of a modern industrial policy for the Community

A. The establishment of a favourable industrial environment

13. Acknowledges that the Community's first duty is to create an environment favourable to industry by establishing an open, ordered market involving:

- the complete removal of obstacles to the free movement of persons, goods, services and capital;

- the most stable possible economic environment, secured by means of sustained, non-inflationary growth;

- the fixing of high, safe standards;

- the laying down of minimum rules with regard to working conditions, remuneration and the enjoyment of social rights in the Community;

14. Calls, therefore, on the Commission resolutely to continue the process of European standardization, in conjunction with European industrialists, even if this entails revising the operating methods of the CEN (European Committee for Standardization), ETSI and CENELEC;

15. Acknowledges, also, the need for a market stimulated by dynamic, fair competition; calls on the Commission, in this connection, to exercise the utmost vigilance when enforcing competition rules, particularly those concerning concentrations and the opening up of public procurement; competition and competitiveness are inextricably linked; believes that the Community needs to develop its policy towards inward investment, taking account of the need to avoid competitive bidding for such funds by national, regional and local governments, and clarifying its view of the significance of the concepts of economic sovereignty and technological independence;

16. Believes that mergers, acquisitions and inter-firm collaborations often have implications for a wide range of Community policies, including environmental protection, regional development, the safeguarding of jobs, terms and conditions of employment, levels of R&D, investment and innovation, and the relationship between Community industries and their foreign strategic competitors; reaffirms its support for the goal of maintaining vigorous competition among the Community's producers, but insists that competition policy must take full account of the range of economic, regional and social consequences of mergers, acquisitions and inter-firm collaboration; therefore calls on the Commission to produce a new statement of competition policy integrated with the Community's wider social and economic goals;

17. Calls on the Commission to develop further its policy on collaborative arrangements between firms, with a view to clarifying the distinction between arrangements which inhibit competition and those which do not;

B. Strengthening the competitiveness of Community industry

18. Notes that, among the various factors underlying the competitiveness of an economy (prices, quality, degree of specialization, comparative advantages), the ability of undertakings to take action and their degree of organization are coming increasingly to the fore;

19. Notes, with specific reference to these factors, that the Community is experiencing a serious crisis of competitiveness, particularly in enabling technology sectors of strategic importance to the future of the Community, such as electronics and data-processing;

20. Acknowledges that, in these sectors, the diagnosis drawn up by the Commission (narrow scope of national markets and its implications; inadequate vertical integration and cooperation networks) bears out the validity of the measures it is advocating;

C. Knowledge management

21. Notes that the third industrial revolution, which is centred on the management of knowledge, networks and information, calls for fresh economic strategies geared to the acquisition, application and dissemination of knowledge, hence the vital need for training and research;

22. Echoes the Commission's view that 'a high level of educational attainment represents the foundation for the necessary level of human capital which advanced economies require'; calls on the Commission, therefore, to seek to enhance and broaden the inadequate piecemeal impact of current programmes (Erasmus, Comet, Lingua) and, in consultation with governments of Member States, to set target proposals for expansion and improvement of Community training provisions to ensure that by the year 2000 the Community has the best-trained and educated population in the world; believes that such proposals must include provision for appropriate financial support for governments of the poorer Member States, and should be tailored to local needs, take into account the medium- and long-term needs of employers and the needs of unemployed and underemployed Community citizens and be delivered by locally and regionally directed institutions;

223.Expresses concern at the shortcomings in Community research, which is characterized by:

- low-intensity (1.9% of Community GDP, as against 2.6% in the USA and 2.9% in Japan);

- inadequate concentration of research efforts in strategic sectors such as data-processing, electronics, new materials, biotechnology, and environmental industries;

- grave inadequacies in the dissemination of technologies and their applications;

- the lack of a genuine network of pathfinder clients to test new technologies;

- an excessively narrow definition of pre-competitive research, compared to the practice of governments of competitor countries, such as Japan;

24. Stresses, further, the inadequacy of the appropriations allocated to the framework programme for research and the excessively slow, unwieldy nature of the procedures for adopting the framework programmes and specific programmes;

25. Takes the view that the Commission could, in the future, perhaps by means of a notification procedure, play a leading role in the coordination of national research programmes, which is at present highly inadequate;

26. Stresses the need to coordinate more effectively and step up technological forecasting on the basis of factual indicators and results (spin-offs from technological projects, degree of public awareness, etc.);

27. Calls on the Commission to investigate with Member States the feasibility of tax incentives for high technology research and development in the Community similar to the American Research and Experimentation Tax Credit Scheme;

D. The promotion of SMUs

228.Points out that 90% of undertakings in the Community are SMUs and that their full potential should be exploited by fostering;

- their fuller integration into the industrial and economic fabric of the Community (simplified administrative procedures; better information; training of management and staff; greater access to funding; greater involvement in Community research programmes);

- closer cooperation between SMUs (by strengthening the Business Cooperation Centre, the Business Cooperation Network (BCNet) and the subcontracting market, which is still too localized, and by encouraging their umbrella organizations to draw up overall strategies);

- compulsory opinions from the Commission's DG XXIII (Enterprise Policy, Distributive Trades, Tourism and Cooperatives) on directives affecting SMUs;

29. Calls for the Commission to undertake a study and report on the local economy, comparable in weight to past studies on EMU or the Single Market. The aim should be to assess the significance, and replicability, of the successes of Europe's most dynamic industrial districts; and to identify the policy responses needed to nurture such experiments; also to bring forward proposals to encourage an active economic role for regional and local government, particularly in fostering small and medium-sized enterprises, drawing on the successful experience of dynamic industrial regions such as Baden-Wuerttemberg in Germany and Emilia-Romagna in Italy; and to enhance the role of regional and local government in channelling a proportion of Community research and development support and Structural Fund assistance to small and medium-sized firms;

30. Supports increases in the funding for the action programme to assist SMUs;

31. Believes that an industrial strategy must be based on a detailed assessment of the strengths and weaknesses of individual European industrial sectors, together with an evaluation of the challenges and opportunities which they face, and that this assessment must draw on the knowledge of the social partners; and therefore calls on the Commission to examine how such industrial fora might be designed at Community level, in order to enhance Europe's industrial strength;

32. Believes, furthermore, that such fora must establish strong links with the national and regional level, recognizing the growing importance of regional and local economies and the need to provide a framework for social dialogue which is accessible to small and medium-sized enterprises and their workforce representatives, together with representatives of local communities;

E. Coherent strategies

33. Underlines the pressing need for the Community to draw up a coherent overall industrial strategy in response to the sophisticated, aggressive strategies employed by its major competitors;

34. Takes the view that this common industrial strategy, while respecting the subsidiarity principle, must focus on the vital strengthening of research policy, the planning of industrial counter-offensives in those sectors of European industry currently undergoing a crisis of competitiveness and developing blueprints for large-scale, collective European or global projects (particularly in the areas of infrastructure, telecommunications, transfer of new technology to the developing countries, health, etc.);

35. Stresses the importance of the USA and Japan taking greater account of the ISO and the IEC;

36. Takes the view that the primary responsibility for achieving industrial competitiveness lies with undertakings themselves, but that it is incumbent on national or Community authorities to deal with problems which cannot be solved simply by allowing market forces free rein, e.g. the emergence of new technologies, and to enforce rules vital to the smooth functioning of the economy in accordance with the general interest and shared values;

37. Notes that, given the specific economic characteristics of the armaments industry, its cost and the often unpredictable nature of any spin-offs, the Member States should cooperate much more closely in this sphere, and give priority, as far as possible, to technologies which will diversify from military to civil applications;

38. Stresses the need, given that organization is now a key factor in competitiveness, to improve substantially cooperation between European undertakings and to enhance the efficiency of the Community's industrial infrastructure; this would involve both undertakings themselves (stock rotation, rate of utilization of equipment) and the public authorities concerned (internal organization of ministries of industry and relations with other ministries; increased cooperation particularly between Commission DGs III - IV and XIII);

39. Notes the recent analysis by the Federal Reserve Bank of New York, suggesting that the lower cost of capital in Japan could be attributed to:

- highly regulated domestic financial markets,

- macroeconomic stability,

- greater integration of industry and banking,

- wider social risk-sharing, through policies designed to minimize the risk of bankruptcy;

40. Calls on the Commission to examine and report on the problem of the high cost of capital in Europe, and the related problem in some Member States of short-termism on the part of financial institutions, taking full account of the Federal Reserve Bank's analysis;

41. Further notes the evidence in the Commission's 1990 "Panorama of EC industry" that the financial performance of Japanese companies is inferior to that of their European and US rivals, and that the high level of Japanese investment owes a lot to the fact that Japanese investors do not demand as high a rate of return as their European and US competitors;

42. In the light of this evidence, rejects the view in COM(90) 0556 that European industrial revival depends on achieving yet higher levels of profitability, entailing a shift from wages to profits and a further rise in economic inequality. Insists rather that the challenge is to reduce the cost of capital for investment;

43. Points to the need for the Community to take the steps required to bring about greater consistency among the various Community policies having a direct or indirect bearing on the system of production;

F. Improving the financial and monetary environment for undertakings

44. Stresses, given the growth in the financial services sector and its attendant risks, the need for European industry to enjoy the soundest and most stable financial and monetary environment possible, for example in terms of exchange rates and interest rates; calls on the Commission to propose legal and financial measures which would encourage long-term investment;

45. Expresses concern, in particular, at the inadequate level of savings in the Community and hopes that conditions will become more conducive to productive investment; this implies the need to foster capital build-up by undertakings, not least through tax incentives, and improve the rate of return on that capital;

46. Recalls the extent to which European industry has been affected by the fluctuations in the dollar exchange rate and their consequences; takes the view that because European competitiveness is contingent on this outside factor it is vital that the process of establishing Monetary Union be speeded up;

47. Notes that an increasing body of research shows that the key to competitive success in an era of rapid technological change, shifting patterns of demand and economic uncertainty is the possession of a highly skilled, committed and flexible workforce, enjoying a high degree of workplace autonomy and of effective participation in the policy-making structures of the firm; notes further that this contrasts with the "deregulationist" view which seeks to minimize the role of workers' representatives and weaken legislation on job security and working conditions, and which emphasizes the value of low wages as a source of competitive advantage; and draws the attention of the Commission, the Council and national governments to the contribution that a strong social dimension makes to industrial success;

G. An assertive commercial policy

48. Stresses the need for an assertive commercial policy which guarantees Community industry fair and equitable terms of trade; calls on the Commission, when conducting international trade negotiations, such as the Uruguay Round, and enforcing international trading rules in general, to exercise much greater vigilance with a view to combating genuine examples of dumping and counterfeit goods and ensuring genuine compliance with the principle of reciprocity by industrialized competitors such as the US and Japan; if the common commercial policy is not strengthened in this way, if necessary by enforcing the Community preference, any progress made towards achieving industrial competitiveness would be in vain;

49. Stresses, further, the need for the Community to implement a more aggressive commercial policy, particularly in respect of SMUs and export credits;

Consolidating and democratizing the decision-making process in respect of Community industrial policy

50. Notes that the complex, rapid nature of technological and industrial change, and the inability of individual countries and national authorities to come to terms with the internationalization of the economy, make immediate consideration of the institutional dimension of a modern industrial policy for the Community essential;

51. Regards it as essential, therefore, that the intergovernmental conferences currently under way should incorporate the institutional dimension of industrial policy, a vital adjunct to Economic and Monetary Union, into their work on the revision of the Treaty with a view to consolidating and democratizing the decision-making process;

52. Stresses once again, in this connection, the need for greater democracy in industrial relations at undertaking level, the supply of information and involvement of the workforce and the local community in the selection of strategies; these offer a guarantee of improved competitiveness accepted by the workforce and greater legitimacy for the undertaking concerned;

53. Takes the view, also, that the Commission should be called upon to play an increasing role in this sphere as an initiator of measures and a stimulator of new ideas, particularly as regards the identification of the Community interest and the coordination of national industrial and technological programmes (notification); believes further that, when implementing its policies, the Commission must take account of the trend in the world markets in goods and services;

54. Draws attention finally, while approving the first steps taken by the Commission, to the need for an integrated, ambitious European industrial policy guided primarily by market forces but able to remedy their shortcomings and capable of ensuring that the Community has the industrial competitiveness it needs;

Calls on the Commission accordingly to expand its initiative and in the near future take the measures and make the proposals which are necessary, in particular, to:

- revitalize those sectors affected by a crisis of competitiveness;

- enhance, coordinate better and speed up research activities;

- promote closer cooperation between the European undertakings concerned;

- provide the Community with the instruments for a tough and timely trade policy;

and to present the Council and the European Parliament with a general report on the Community's industrial policy no later than 1992, reflecting the views of the European Parliament expressed in this resolution;

55. Notes that genuine democratic dialogue on industrial policy issues is essential given their economic, social, regional, political and cultural implications and the current lack of transparency in this sphere;

56. Takes the view that the social partners must be equally involved, inter alia through the Economic and Social Committee and the social dialogue, at this preparatory stage, during the development of the industrial policy and in advising on policy proposals;

57. Stresses, finally, the role which the European Parliament would play, in conjunction with the national parliaments, both in keeping European public opinion informed, with the aid of the existing scientific and technical assessment office (STOA) expanded if necessary and in monitoring the work of the Council and the Commission, whose respective powers would be strengthened; Parliament's assent would be required to the multiannual industrial policy guidelines, as would a vote approving the Commission's annual report on industrial and research policy; Parliament would thus become the essential forum for the democratic debate on European industry.

58. Instructs its President to forward this resolution to the Commission, the Council and the Intergovernmental Conferences.