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Symposium 2015

Solution for Developing Modern Sustainable Industrial Policies through Innovation-focused "Co-opetition"

The Challenge

How to design an industrial policy for Europe, which spurs innovation and enables European industries to lead in the low carbon “space race”? This is a key challenge related to two agendas on wh ...

How to design an industrial policy for Europe, which spurs innovation and enables European industries to lead in the low carbon “space race”? This is a key challenge related to two agendas on which international attention is currently focused: the COP21 of the United Nations Framework Convention on Climate Change in Paris, and Europe's recent agenda for growth, jobs, and competitiveness. Much like climate policy, the need for a new industrial policy is widely acknowledged among politicians, businesses, and the wider society. However, there is little confidence that an innovative and effective industrial policy can be designed to fit all sectors, regions, and stakeholders alike. Yet, with a low carbon market estimated at more than 4.5 trillion euros, progress in this area is vital. One promising approach is to develop a modern understanding of the role of public policy and free markets. With this in mind, the idea of "co-opetition" seeks to stimulate industrial innovation through a combination of both cooperation and competition among countries and enterprises.

Stimulating Low-Carbon Innovation

 

1. Innovation is essential to drive low-carbon growth

Stimulating innovation in technologies, business models and social practices can drive both growth and emissions reductions. On the one hand, advances in digitization, new materials, life sciences and production processes have the potential to transform markets and dramatically cut resource consumption. On the other hand, the development of new business models as well as cross-company and cross-sectoral collaboration is essential to steer through the transition and establish a low-carbon economy.

2. An adequate policy framework is fundamental to large-scale, low-carbon innovation

According to the first New Climate Economy report, public investment in the energy sector should triple to well over US$100 billion a year by the mid-2020s in order to help create the next wave of resource efficient, low-carbon investment. Support for R&D, including publicly funded basic research and links between public research and the private sector, to ensure research remains relevant to market demand is a critical component of overall policies for growth. In addition, instruments such as pricing mechanisms, regulatory standards and public procurement are vital to build demand for new technologies. Ensuring strong and fair competition through anti-trust and intellectual property regimes protecting the value and shaping the diffusion of innovation will equally be a key pillar of success.

3. A policy framework for innovation needs to be developed at the European level

Only a considerably large market for low-carbon products and services will drive low-carbon innovation. Europe has been a driver of innovation and can be seen as a laboratory for policies globally. Moreover, the EU is particularly suited to foster multi-stakeholder partnerships across governance levels to catalyze emissions reduction and growth potential.

Several measures and policies have been or are envisaged to be adopted that build into a consistent framework for industrial innovation, including EFSI, circular economy, ETS/NER 400, the innovation pillar of the Energy Union and the review of the EU’s growth strategy.

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