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Erhvervsudvalget 2009-10
KOM (2009) 0647 Bilag 8
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Denmark’s response to the Commission’s consultation for the future EU2020 Strategy

Denmark welcomes the Commission’s consultation paper for the EU2020 Strategy, which

provides a good starting point for the discussions on EU2020.

The first contribution on the post-2010 Lisbon Strategy was submitted by Denmark in a non-

paper in March 2009. It outlined five strategic directions for future EU action i) deepening of

the internal market; ii) enhancing knowledge and innovation; iii) making growth green; iv) a

strengthened external dimension; and v) reinforced governance structure and implementation.

This second contribution seeks to give further input and direction to the future EU2020

Strategy.

***

The current economic crisis has not only weakened the EU economy, but the world economy,

with significant decline in global output, trade and jobs. It has come at a time when Europe is

already feeling the impact from globalisation and strong competition from emerging

economies. The combined challenges of the severe economic crisis, globalisation, an ageing

population, climate change, and the pressure on biodiversity and natural resources, call for a

new growth and employment strategy in the EU.

The economic crisis has weakened public finances and debt levels are sharply increasing across

all Member States endangering the long-term macroeconomic stability of Europe. This will

provide the backdrop of the EU2020 Strategy. As a response to the crisis, governments across

Europe have supported the economy through economic policies. These policies and the effects

of automatic stabilisers have helped stimulate economic growth, and reduce the number of

Europeans falling into unemployment. However, if action is not taken to reform the

economies, there is a real risk that the EU will be characterised by persistently high and

increasing debt levels, excessive government borrowing, high unemployment and high interest

rates that will hurt private investment, production, future growth and employment.

The EU2020 Strategy provides us with an opportunity to embrace a new vision and take

leadership in grasping and capitalizing on the challenges we face. The goal of the EU2020

Strategy should be clearly focused on creating long-term growth and employment and ensuring

a smooth exit from the crisis. The design of a new EU2020 Strategy must transform EU into a

knowledge based, innovative, creative, entrepreneurial and greener economy that will ensure

our future sustainable welfare and prosperity.

The necessary structural reforms to ensure macroeconomic stability and a stronger

prioritisation of public expenditure must be implemented. At the EU level, the strategy should

be reflected in a future-oriented approach to the next Multiannual Financial Framework. The

EU2020 Strategy must provide the Member States with a framework to strengthen the very

foundations of European productivity; education, research, innovation (“the knowledge

triangle”), creativity, and entrepreneurship. It must also provide the conditions for better

equipping people and business with necessary skills to grasp the new opportunities. And it must

drive the modernisation of the Single Market in order for Europe to cope with the new

challenges and reap the benefits from an eco-efficient economy, increased digitalisation and

globalisation while having in mind the social dimension.

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The EU2020 Strategy should contain both an EU-dimension and a national dimension. Bold

action is needed on both levels. It must also be supported by an effective and enhanced

governance structure reflecting the new and more diversified EU that ensures a forward-

looking, reform-oriented approach in support of the growth and employment objectives in the

EU2020 Strategy.

Creating value by basing growth on knowledge

To enhance our productivity, we must invest in, rebuild and better integrate the very

foundations of European productivity; that is education, research, innovation (the knowledge

triangle), creativity and entrepreneurship. EU needs a skilled and entrepreneurial work force,

and more innovative, creative and knowledge based businesses. We must therefore take action

in the following areas:

a strengthening of the knowledge triangle

We need to implement the knowledge triangle, and to develop further synergies between

education, research and development, and business with a view to getting innovative goods,

services and technologies on to the market place. The knowledge triangle should be the guiding

concept when designing the successors to the current generation of the EU’s Framework

Programmes for research and development, lifelong learning, and competitiveness and

innovation, which all expire in 2013. We should ensure well-functioning co-ordination between

these programmes in order to be able to efficiently address the most pressing societal

challenges of our time (e.g. energy efficiency or health). We should also consider how the

programmes can be made more accessible – in particular to small and medium-sized enterprises

– by simplifying and streamlining application and reporting procedures.

more effective investments in research and innovation

Research and innovative activities are some of the main drivers of productivity and economic

progress. We must exploit these more effectively in order to spur productivity, and enable us to

address the global challenges.

Europe possesses pockets of world-class research capability, and a longstanding tradition of

producing breakthrough inventions. Despite this, Europe still lags behind other leading

economies in investments into R&D. Smarter investments in research and innovation are

required through the reallocation of EU funds on priority areas, including the development of

green technologies. Additional resources should also be directed to basic research under the

European Research Council. Experience has shown that basic research is a precondition for

addressing future challenges, and often also the foundation for strategic research and

innovation.

larger research infrastructures to play a more prominent role

In the future, larger world-class research infrastructures, such as large-scale facilities, major

pieces of research equipment or databases or networks should play a more prominent role

within EU’s framework programme for research and funding. These are essential in attracting

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world-class researchers and research students, and companies related to a particular research

area.

a real internal market for knowledge

EU needs to complete a real internal market (“the fifth freedom”) in research, innovation and

education. Although progress has been made, we should continue to implement the necessary

policies – for instance more flexible education, internationalisation and modernisation of higher

education, and the strengthening of vocational education and training.

In that context, more should be done to achieve mutual recognition of qualifications – both for

academic education (the Bologna process), and for vocational education and training (the

Copenhagen process) by strengthening the recognition of prior learning (formal, informal and

non-formal) in flexible education systems, and by strengthening the attractiveness of vocational

education and training. We must accelerate efforts to implement our vision of a “common

European Research Area” (ERA). We need not only an approach cutting across policy areas,

but it is also essential to mobilise industry and knowledge building institutions.

The mobility of researchers should be boosted by piloted schemes to stimulate the fifth

freedom. Attracting and retaining talented researchers and students, a research infrastructure of

the highest international caliber, and exchange of knowledge are key preconditions for

establishing strong research environments.

commercialisation of knowledge

In order to bring new products and services to the EU and the global market place, we need to

better ensure the commercialisation of innovations and technologies. Internationally strong and

attractive education and research institutions, and co-operation and partnerships with

enterprises, are key factors for the willingness of European and foreign companies to invest in

research in Europe. Likewise, increased technological services for small enterprises, and

knowledge transfer between large businesses and SMEs should be encouraged. We should also

work on better access to private finance for entrepreneurs.

enhanced co-ordination and co-operation

If co-ordination and co-operation of Member States’ research and development programmes

are improved, Europe has a far better opportunity to take a leading role addressing the global

challenges. The seventh EU framework programme for research amounts only to five percent

of the total R&D budget in Member States. Therefore, we need enhanced co-operation and co-

ordination between Member States’ own research and development activities, and better

exchange of knowledge between European research institutions. Also, joint programming at

European level based on national research activities could be considered as a way to ensure a

better strategic prioritisation of research resources, and a better division of labour. More

flexibility in application procedures and requirements in national programmes would also

increase competition and performance.

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Empowering people in inclusive societies

An open, dynamic and knowledge based economy will contribute to creating new jobs. Huge

opportunities exist for people and for business if they are equipped to grasp them. We need

more and better jobs in Europe, and a skilled labour force to fill the jobs. Action in the

following areas must be taken:

an exit-strategy from short-term labour market policies

The schemes introduced in some countries during the crises in order to keep people in their old

job should gradually be abandoned, while schemes and reforms introduced to facilitate

transitions to new jobs must be strengthened to underpin a flexible labour market. The

Common Principles for Flexicurity provide a very useful framework for addressing the many

future challenges, both in the short and longer term, and to find a proper balance between

flexibility and security on the labour market in individual countries. However, we should bear in

mind that different conditions in the different Member States will require individual responses

and solutions.

a strategy towards the demographic challenges

In the longer run, the challenge for Europe will be to ensure adequate supply of labour. This

“demographic challenge” is a long-term reality which must not be forgotten in light of the

current crisis. It must be kept in mind when designing new EU policies with a view to growth

and employment. We need to increase the employment rate especially for women and older

people, and make a great effort to integrate marginalised groups such as non-western

immigrants and descendants as well as disabled persons. This must be done by using targeted

and active labour market policies. The retirement age must be increased, for instance by

incentives such as flexible working arrangements and bonuses. Furthermore, initiatives should

be taken to promote employment for women, and hence generate economic growth.

Mainstreaming of gender equality as well as a better work-life balance is crucial in this respect.

combating youth unemployment

A strengthened effort towards those at risk of becoming long-term unemployed is required.

They must be offered education to upgrade their skills and employability. We must include

everyone, and ensure that we do not lose a large part of a generation of young Europeans.

Despite their current difficulties entering the labour market, the young generation is crucial for

securing long-term labour supply. Young people who have completed a study or training

programme fare better on the labour market than young people with no such qualifications.

They keep their jobs longer, are more productive throughout their working lives, and if they

lose their jobs, they are quicker to find a new job.

reducing illness absenteeism

In our efforts to increase labour supply, we also need to reduce the level of illness absenteeism.

An effort to improve the working environment and health, and safety at work must

simultaneously contribute to preventing illness absenteeism, accidents, attrition and early

withdrawal from the labour market. The working environment authorities in the member states

in combination with e.g. prevention funds should support projects for the prevention of

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physical and psychological attrition and companies in the attrition-threatened sectors or

industries.

a more skilled, innovative, mobile and entrepreneurial work force

We need a more skilled, innovative, mobile and entrepreneurial work force in order to ensure

sustained productivity growth and prosperity. This will also promote active citizenship,

personal development of citizens, and contribute to more social inclusion and coherence in the

member states.

In 2020, business and industry in Europe will have less need for low qualified persons in the

workforce. Therefore, it is of great importance that the EU focuses on educational issues.

While higher education is important, primary school and vocational education and training

must not be forgotten. A high quality primary school that delivers well-educated young people

to the next steps in the educational system is essential.

Developing new skills will require high quality education in a lifelong perspective. We need

education and training systems that promote and support creativity, innovation and

entrepreneurship among pupils, students, teachers and researchers. The aim should be more

flexibility to upgrade skills and adapt to changing market conditions, without marginalising

anyone. Recognition of informal, non-formal and formal prior learning is an essential part of

these systems. Likewise, creating new learning patterns, by focusing on student-centred

learning, learning outcome, and quality of teaching is important. This must be done in a way

that stimulates talent, and at the same time offers the necessary support to low achievers.

Creating a competitive, connected and greener economy

Over the past two decades, the EU Single Market and its increasingly open engagement with

the global economy have been highly successful in boosting productivity, growth and job

creation by enabling more innovation and more investment. As we approach its 20

anniversary, we must ensure that the Single Market regulation is continuously modernized in

order to cope with the new challenges, and that it is capable of reaping the benefits from an

eco-efficient economy, increased digitalisation and globalisation. Efforts should be made in the

following areas:

the EU2020 as part of the economic exit-strategy

A number of “post-crisis challenges” must be tackled: As the economy recovers, the

extraordinary support measures that were launched to counter the crisis both in the real

economy and in the financial sector should gradually be phased out. We must return to a

rigorous enforcement of the EU’s state aid rules as the temporary derogations expire, and

continue our pursuit of strong competition policies. Our current efforts to strengthen

regulation of the financial sector will also contribute to securing a more stable and robust

financial lending and investment environment for European businesses.

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an eco-efficient and green single market

We should strive to become the largest Green Single Market in the world with businesses

becoming global leaders in the production and trade in green goods, services and technology,

making it possible and easy for consumers to make eco-efficient choices.

Efforts to combat climate change, relieve the pressure on scarce natural resources, strengthen

energy security and increase environmental protection are expected to multiply the global

demand for eco-efficient technologies and resource-efficient products and services in the

coming decades. The global economy in low carbon and environmental goods and services is

worth around €3.5 trillion a year, and employs around 3.5 million people across the EU.

Forecasted to grow to well over €4.5 trillion by 2015, it is one of the most dynamic sectors in

the world. As global leader on the global climate agenda, a consumer base of almost 500 million

people, and a strong technology base, EU is particularly well-equipped to continue its strong

focus on cost-effective and efficient solutions thereby capitalising on the green agenda.

We should develop competitive markets in low carbon and environmentally friendly goods,

services and technologies, by identifying and removing cross border (EU and International)

barriers to trade. Alongside this, common standards and labelling requirements for energy and

environmental products and services should be applied throughout EU. We should also

continue to fulfil our role as an international trendsetter for environmental requirements for

products and services. This will enable businesses to take advantage of economies of scale, and

to make bolder investment decisions. And it will increase consumers’ awareness about

environmental problems enabling them to make more informed choices. For instance, a

common European standard for electric car infrastructure would ensure that electric cars can

function across the union without any technical adjustments. This could ensure economies of

scale in the production, to help overcome consumer reluctance to buy electric cars, while also

allowing more energy from renewable sources to be phased in.

Finally, we should develop a smarter and more connected transport infrastructure to ensure a

more mobile, competitive, energy- and eco-efficient transport sector.

embedding greater energy efficiency

EU must make a transition to an eco-efficient economy embedding greater energy efficiency

by: ensuring full and cost-effective implementation of the targets in the EU Climate and Energy

Package; reducing the EU’s dependency on fossil fuels; and developing a robust international

carbon market. We should ensure decoupling of energy consumption and environmental

degradation from economic growth. The climate- and energy-agenda should be

“mainstreamed” into all relevant EU-policies – e.g. research and development, transport,

construction, agriculture, foreign affairs and the EU-budget. The structural funds for poorer

areas as well as the research and development framework program should be more focused on

initiatives that support EU’s climate, energy and environmental policies.

an internal market for energy

A future EU2020 Strategy must contain a coherent competitiveness approach in order to realise

the full potential of the common Internal Energy market. An open and well-functioning energy

market, within the EU, effective competition and sound state aid policies are essential for long-

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term productivity, energy security, competitiveness and green growth, and thus provide an

indispensible engine for employment and prosperity. That means continuously focusing on

implementation and enforcement of legislation, filling the gaps in today's internal market, and

enhancing transparency.

internalising the cost of polluting

In order to reduce pollution in a cost-efficient way, the cost of polluting should be internalised

in price structures at all levels while upholding the continued competitiveness of European

companies. For large emitters of carbon dioxide this has been achieved in a harmonised way

through the European emissions trading scheme. We should also consider a common EU-

approach to internalising the cost of polluting in other sectors - for instance through minimum

standards for taxation of emissions, and on the use of scarce natural resources. In this way,

European consumers and producers would face more similar incentives to make green choices,

which would support the development of a green single market.

development of eco-efficient technologies

The development, commercialisation and deployment of eco-efficient technologies and smart

energy infrastructure must be accelerated. At the EU-level, the Environmental Technology

Action Plan (ETAP) has served a clear role in promoting the different tools at EU and Member

State level to accelerate innovation of eco-efficient technologies. We need to further consider a

platform that provides specific push and pull incentives for a further acceleration of

technology-innovation needed for an efficient response to the environmental challenges faced

by the EU and globally.

The Strategic Energy Technology Plan (SET-Plan) should also provide a platform for the

promotion of wind power, bioenergy, smart grids, energy efficiency and solar power. A strong

emphasis on wind power (on and offshore) and solar power can unlock the enormous

renewable energy potential across Europe's climate zones. Technologies not included in the

SET-Plan (geothermal energy, wave energy, heating and cooling technologies) should also be

prioritised as they can make a substantial contribution to a sustainable and diversified energy

supply.

a smarter regulatory framework

As global competition increases, it is more important than ever that the EU’s internal market

regulatory framework is developed with our international competitiveness in mind. We must

ensure that our businesses not least the SMEs can continue to compete globally and that

Europe remains attractive to inward investments. Adoption of a smarter, modernised,

regulatory framework in the EU can create the best framework conditions for businesses to

help spur growth and economic recovery. We must give greater consideration to different

policy tools to reduce burdens for business and ensure a modern regulatory framework keeping

end-users – employees, consumers and businesses – in mind during policy-making. Alongside

this, we must better implement existing rules and instruments, such as the Services Directive

and the Small Business Act. We also need to make further progress on the EU Patent system in

a way that takes the needs of SMEs into account.

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more successful start-up companies and social rights to self-employed

We should aim for better conditions for start-up companies, because they create jobs faster

than existing companies. In this respect, there could be further need for access to start-up and

investment capital, reduction of administrative burdens and developing specific advisory

programmes for start-up companies in local centres. To encourage entrepreneurship, social

rights of self-employed should be promoted.

a digital single market

The continued development and use of Information and Communication Technology provides

great potential for increased productivity and resource efficiency. Market driven access to ICT

infrastructure, the development of digital competences, and the creation of new digital

technologies are increasingly determining business functions and consumer choice. At the same

time, the development of the online market place has further expanded the selection and

variety for our citizens, and significantly increased the consumer base for EU businesses.

Increasingly, EU consumers and business consumers are sourcing products, services and

technologies online from other nations.

For us to maximise the benefits and position ourselves amongst our global competitors, we

need to develop a fully functioning digital market, support the development of new digital

innovation; and facilitate the digital economy by removing barriers and developing business

codes of conduct and voluntary standardisation. This must go hand in hand with the

promotion of cross border e-commerce and the development of digital solutions, such as an e-

commerce trust mark, and common standards for ICT technology, within the EU and

internationally to boost consumer confidence in online purchasing. Increased use of ICT could

also potentially make a significant contribution to reducing carbon dioxide emissions.

a globalised internal market

In an increasingly global economy, a well functioning single market is essential to the EU’s

competitiveness. With half a billion consumers and a knowledge-driven innovative business

sector, the internal market is a perfect framework for setting eco-efficiency standards for

sustainable consumption and production to influence and serve as models for the global

economy.

To sustain future growth and jobs, we must attract inward investment and businesses, and

support trade by ensuring an open and well functioning market. This requires the

modernisation of our regulatory regime to continue underpinning a competitive framework and

the mutual reinforcement of our internal and external policies. Modern EU initiatives must

necessarily be targeted and evidence-based. New proposals should be introduced in areas where

evidence shows that there are market failures, and where there are the greatest potential to

create jobs and growth.

We must create transferable standards and regulations, and enforce internationally agreed rules,

secure an early conclusion of the DDA-negotiations, and increase administrative and regulatory

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co-operation with key trading partners. At the same time, we must also develop a global market

access strategy to enable EU businesses to trade and market goods, services and technologies,

and increase the use of global sectoral agreements. And we must ensure better enforcement of

intellectual property rights at the global level, to incentivise our businesses to innovate,

particularly within knowledge-intensive sectors such as green and digital technologies.

Reinforced governance and implementation

In order to reach the objectives outlined above, EU and its Member States must deliver on its

commitments. On the national dimension of the EU2020 strategy, it is important that the

governance structure spur the necessary structural reforms and budgetary prioritisation. A new

and strong governance structure should ensure that Member States’ national reform efforts are

in accordance with common EU policies and in support of the growth and employment

objectives in the EU2020 Strategy. A stronger involvement of regional and local authorities as

well as the social partners in the implementation of the Strategy is necessary to ensure

ownership at all levels.

targets and indicators

The EU2020 Strategy should be developed around a small number of key objectives of

relevance for long-term growth and employment. Each objective must be supported by setting

quantitative, out-put oriented and measurable targets.

In addition to overall EU targets, country-specific targets should when relevant be set by

individual Member States in accordance with national situations and needs as part of the

National Reform Programme. This would reflect the heterogeneity of the EU, and create a

more ambitious and realistic target setting as well as strengthened national ownership.

stronger incentives for reforms

A more effective and enhanced governance structure should ensure that member states deliver

on their own commitments in support of the common EU targets. This will require

establishing stronger incentives for reforms, and enhanced monitoring and evaluation efforts,

as well as complementary governance methods and instruments.

We need more openness towards increased use of public benchmarking, ranking and advice

on relevant indicators, and comparisons with influential non-EU countries. We should also

consider the idea of, to some extent, directing EU funds towards the most effective reformers.

This could help create peer pressure for reform, and provide easier communication of the

Strategy to the public. Steps towards a better linkage between the micro- and macro-economic

surveillance processes by conducting the review process during the same period of time

should be taken.

The European Council should be made the focal point of the EU2020 Strategy to ensure

ownership at the highest political level and enforcement of Member States’ commitments.

Other council formations should contribute as relevant.