Social Europe

politics, economy and employment & labour

  • Themes
    • Strategic autonomy
    • War in Ukraine
    • European digital sphere
    • Recovery and resilience
  • Publications
    • Books
    • Dossiers
    • Occasional Papers
    • Research Essays
    • Brexit Paper Series
  • Podcast
  • Videos
  • Newsletter

The future of manufacturing—is it in Europe?

Donald Storrie 11th April 2019

Europe can remain a manufacturing hub if it ensures early adoption of game-changing technologies, engages with global supply chains and manages the green transition.

manufacturing

Donald Storrie

Manufacturing is dead, they said. But after four years, ten research reports, 47 case studies, an analysis of 27 policy instruments, countless seminars and debate, the Future of Manufacturing in Europe project is anticipating no funeral. Quite the contrary: the findings from this innovative project place manufacturing at the heart of Europe and jobs to the fore.

At the behest of the European Commission, stemming from a proposal by the European Parliament, the European Foundation for the Improvement of Living and Working Conditions (Eurofound) has looked in detail at how manufacturing is changing on a global scale, how the industry will further evolve and what the impacts on Europe will be—everything from redefining tasks for meat packers in Sweden to the potential fallout of a trade war among the United States, the European Union and China.

Value added in mining, manufacturing and utilities 1970-2017 (US dollars at current prices in millions)

eurofound figure

Source: UN Conference on Trade and development


Our job is keeping you informed!


Subscribe to our free newsletter and stay up to date with the latest Social Europe content. We will never send you spam and you can unsubscribe anytime.

Sign up here

The research highlights the potential labour-market effects of automation and technological innovation. Overall, it finds that developments in technology and continued access to global markets can bring significant dividends for Europe—but only if it manages the transition.

For instance, the results show that taking the lead in the commercial adoption of emerging technologies will create more jobs and will give Europe a decisive competitive advantage over other global trading blocs, such as the US and China. More jobs will also be created if Europe actively engages in international production networks or global supply chains (rather than investing in further efforts at reshoring, which is unlikely to boost employment). And implementing the Paris climate agreement in full, will, in fact, ensure enhanced growth and employment opportunities for the EU.

What’s more, in general these jobs are likely to be ‘better’, requiring new and higher skills, alongside a reduction in the arduous jobs of the past. It is only the projected increase in global tariffs which looks likely to cause EU job loss in this context, according to these findings.

So, it would seem, far from the doom merchants’ estimates of huge and significant job loss as a result of automation and new technologies, this is good news. But what does it mean in practice?

Game-changing

Currently, the commercial application of the technologies studied is limited and mainly confined to highly productive firms. But, as the research shows, they can potentially have a game-changing impact and early adoption will give Europe a very clear competitive advantage. The realities of international competition make the adoption of productivity-enhancing technologies in manufacturing, and engagement in international production networks, an imperative.

And while there are still clear concerns about the impact of these new technologies on jobs and employment, they should be assuaged. Historical evidence shows that employment growth goes together with technological progress. The more the productivity gains go to consumers and workers, the more positive these effects are.

Indeed, the daily tasks of workers in manufacturing are already changing. The importance of physical activities is generally declining due to automation. With more intensive use of digitally controlled equipment, and the growing significance of quality standards, manual industrial workers will be conducting increasingly intellectual tasks.

So far, so good. But ensuring that workers are adequately prepared for the labour market and economic changes that are already under way will be fundamental for the growth of manufacturing industry and Europe’s broader economic success. Future workers, primarily young people, also need to have the most appropriate and relevant training, including via vocational education and apprenticeships, if ‘industry 4.0’ is really to be an economic, social and employment success.


We need your support


Social Europe is an independent publisher and we believe in freely available content. For this model to be sustainable, however, we depend on the solidarity of our readers. Become a Social Europe member for less than 5 Euro per month and help us produce more articles, podcasts and videos. Thank you very much for your support!

Become a Social Europe Member

Scenarios

Likewise, Europe must be agile and adaptable to the changing industrial and economic environment if it is to ensure its competitive advantage. The energy scenario set out in the research envisages a successful transition towards a low-carbon economy, as defined by the Paris accord, resulting in a 1.1 per cent growth in gross domestic product and a 0.5 per cent increase in employment in the EU by 2030, compared with a largely ‘business as usual’ baseline. But this implies a high-level commitment to effective management of this process—as these positive figures are largely down to the investment activity required to achieve such a transition—together with the impact of lower spending on the import of fossil fuels. (In the same scenario the US would initially experience a 3.4 per cent drop in GDP, and a 1.6 per cent decline in employment.)

Similarly, Europe will continue to face the economic protectionism which has been on the rise since 2008 but has increased significantly under the current US administration. The trade scenario presented in the research shows that the world’s largest economies would suffer economically from a further significant hike in trade tariffs. In the case of the EU, the bloc would experience a 1 per cent contraction in GDP, a 0.3 per cent lower rate of employment, and a 1.1 per cent decrease in imports by 2030, compared with a ‘no new tariffs’ default scenario.

With consumer growth expected to be much faster in many parts of the world outside of Europe, the future of manufacturing, and so much of the material welfare enjoyed by people in Europe, is highly dependent upon globally competitive European manufacturing with access to these markets. The implications of a tariff war must therefore be carefully anticipated—only adaptation to economic and industrial change, rather than seeking to insulate Europe from it, will ultimately benefit manufacturing and bring more jobs.

The economic, skills, training and environmental challenges which this research has detailed will require a concerted approach from industry experts, national and regional public authorities, the social partners, academics and policy-makers. Political impetus and economic initiative will thus be at a premium if manufacturing is to remain alive and well in Europe.

Donald Storrie

Donald Storrie is chief researcher at Eurofound and leader of the Future of Manufacturing in Europe pilot project. He was previously director of the Centre of European Labour Market Studies in Sweden.

You are here: Home / Politics / The future of manufacturing—is it in Europe?

Most Popular Posts

Visentini,ITUC,Qatar,Fight Impunity,50,000 Visentini, ‘Fight Impunity’, the ITUC and QatarFrank Hoffer
Russian soldiers' mothers,war,Ukraine The Ukraine war and Russian soldiers’ mothersJennifer Mathers and Natasha Danilova
IGU,documents,International Gas Union,lobby,lobbying,sustainable finance taxonomy,green gas,EU,COP ‘Gaslighting’ Europe on fossil fuelsFaye Holder
Schengen,Fortress Europe,Romania,Bulgaria Romania and Bulgaria stuck in EU’s second tierMagdalena Ulceluse
income inequality,inequality,Gini,1 per cent,elephant chart,elephant Global income inequality: time to revise the elephantBranko Milanovic

Most Recent Posts

energy transition,Europe,wind and solar Europe’s energy transition starts to speed upDave Jones
equality bodies,gender equality Setting standards for national equality bodiesEvelyn Collins
Pakistan,flooding,floods Flooded Pakistan, symbol of climate injusticeZareen Zahid Qureshi
reality check,EU foreign policy,Russia Russia’s invasion of Ukraine: a reality check for the EUHeidi Mauer, Richard Whitman and Nicholas Wright
permanent EU investment fund,Recovery and Resilience Facility,public investment,RRF Towards a permanent EU investment fundPhilipp Heimberger and Andreas Lichtenberger

Other Social Europe Publications

front cover scaled Towards a social-democratic century?
Cover e1655225066994 National recovery and resilience plans
Untitled design The transatlantic relationship
Women Corona e1631700896969 500 Women and the coronavirus crisis
sere12 1 RE No. 12: Why No Economic Democracy in Sweden?

Foundation for European Progressive Studies Advertisement

The winter issue of the Progressive Post magazine from FEPS is out!

The sequence of recent catastrophes has thrust new words into our vocabulary—'polycrisis', for example, even 'permacrisis'. These challenges have multiple origins, reinforce each other and cannot be tackled individually. But could they also be opportunities for the EU?

This issue offers compelling analyses on the European health union, multilateralism and international co-operation, the state of the union, political alternatives to the narrative imposed by the right and much more!


DOWNLOAD HERE

Hans Böckler Stiftung Advertisement

The macroeconomic effects of re-applying the EU fiscal rules

Against the background of the European Commission's reform plans for the Stability and Growth Pact (SGP), this policy brief uses the macroeconometric multi-country model NiGEM to simulate the macroeconomic implications of the most relevant reform options from 2024 onwards. Next to a return to the existing and unreformed rules, the most prominent options include an expenditure rule linked to a debt anchor.

Our results for the euro area and its four biggest economies—France, Italy, Germany and Spain—indicate that returning to the rules of the SGP would lead to severe cuts in public spending, particularly if the SGP rules were interpreted as in the past. A more flexible interpretation would only somewhat ease the fiscal-adjustment burden. An expenditure rule along the lines of the European Fiscal Board would, however, not necessarily alleviate that burden in and of itself.

Our simulations show great care must be taken to specify the expenditure rule, such that fiscal consolidation is achieved in a growth-friendly way. Raising the debt ceiling to 90 per cent of gross domestic product and applying less demanding fiscal adjustments, as proposed by the IMK, would go a long way.


DOWNLOAD HERE

ILO advertisement

Global Wage Report 2022-23: The impact of inflation and COVID-19 on wages and purchasing power

The International Labour Organization's Global Wage Report is a key reference on wages and wage inequality for the academic community and policy-makers around the world.

This eighth edition of the report, The Impact of inflation and COVID-19 on wages and purchasing power, examines the evolution of real wages, giving a unique picture of wage trends globally and by region. The report includes evidence on how wages have evolved through the COVID-19 crisis as well as how the current inflationary context is biting into real wage growth in most regions of the world. The report shows that for the first time in the 21st century real wage growth has fallen to negative values while, at the same time, the gap between real productivity growth and real wage growth continues to widen.

The report analysis the evolution of the real total wage bill from 2019 to 2022 to show how its different components—employment, nominal wages and inflation—have changed during the COVID-19 crisis and, more recently, during the cost-of-living crisis. The decomposition of the total wage bill, and its evolution, is shown for all wage employees and distinguishes between women and men. The report also looks at changes in wage inequality and the gender pay gap to reveal how COVID-19 may have contributed to increasing income inequality in different regions of the world. Together, the empirical evidence in the report becomes the backbone of a policy discussion that could play a key role in a human-centred recovery from the different ongoing crises.


DOWNLOAD HERE

ETUI advertisement

The EU recovery strategy: a blueprint for a more Social Europe or a house of cards?

This new ETUI paper explores the European Union recovery strategy, with a focus on its potentially transformative aspects vis-à-vis European integration and its implications for the social dimension of the EU’s socio-economic governance. In particular, it reflects on whether the agreed measures provide sufficient safeguards against the spectre of austerity and whether these constitute steps away from treating social and labour policies as mere ‘variables’ of economic growth.


DOWNLOAD HERE

Eurofound advertisement

Eurofound webinar: Making telework work for everyone

Since 2020 more European workers and managers have enjoyed greater flexibility and autonomy in work and are reporting their preference for hybrid working. Also driven by technological developments and structural changes in employment, organisations are now integrating telework more permanently into their workplace.

To reflect on these shifts, on 6 December Eurofound researchers Oscar Vargas and John Hurley explored the challenges and opportunities of the surge in telework, as well as the overall growth of telework and teleworkable jobs in the EU and what this means for workers, managers, companies and policymakers.


WATCH THE WEBINAR HERE

About Social Europe

Our Mission

Article Submission

Membership

Advertisements

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641

Social Europe Archives

Search Social Europe

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Follow us

RSS Feed

Follow us on Facebook

Follow us on Twitter

Follow us on LinkedIn

Follow us on YouTube