Industry continues to play a pivotal role in the EU economy as a major employer, supporting high value jobs. Industrial companies also indirectly support jobs and value added in other sectors. But European companies risk falling behind global competition. The European share of the largest companies by market capitalisation has decreased and is now well below the US. The European share of ‘unicorn’ start-ups is even weaker and far behind the US and China.
Ensuring the competitiveness of established and new EU industry should remain a top priority for politicians and policymakers. The global corporate landscape is changing rapidly and European firms risk losing out to their American and emerging competitors. Europe must become a successful incubator for start-ups. This requires an innovation-friendly and stable regulatory framework.
Confidence is returning to the euro area, which is now experiencing a long-overdue cyclical recovery. But European manufacturing is losing global market share and export share, while labour unit costs in the euro area are increasing. Private investment has begun to recover, but public investment continues to fall.