Industrial Competitiveness Needs Strong Local and Regional Ecosystems
Europe’s ambition to strengthen its industrial competitiveness, strategic autonomy and economic security is both timely and necessary. The proposed Industrial Accelerator Act (IAA) is an important step towards building a stronger industrial base and accelerating the green and digital transitions. Yet for the regulation to deliver results on the ground, it must better recognise the role of cities and regions as key partners in industrial transformation.
The Helsinki-Uusimaa Region, which generates 39% of Finland’s GDP and half of the country’s R&D expenditure, sees first-hand how industrial growth depends on strong cooperation between businesses, research organisations, educational institutions and public authorities. Industrial competitiveness cannot however be built through top-down measures alone. Regions and cities are essential in connecting actors, attracting investments, developing skills and strengthening industrial value chains.
The new proposed Industrial Manufacturing Acceleration Areas should therefore be designated based on real industrial strengths: innovation capacity, infrastructure, energy availability, industrial readiness and decarbonisation potential. Regional GDP averages or cohesion classifications alone do not capture where Europe’s next industrial investments can deliver the greatest impact. A place-based approach will strengthen competitiveness while supporting best the green transition.
At the same time, faster permitting must not come at the expense of local democracy, environmental protection or municipal self-government. Streamlined procedures are needed, but they should build on existing national systems and respect local planning competences. Simplification should accelerate investments, not create new layers of administration.
Finally, Europe needs balanced and predictable rules that encourage investment and innovation. Foreign investment requirements must remain proportionate, public procurement obligations should not place excessive costs on public authorities, and strategic sectors should reflect Europe’s future needs by including areas such as semiconductors, materials recovery and maritime manufacturing.
Europe’s industrial base is facing unprecedented competitive pressure from the United States and China, while simultaneously delivering on ambitious climate, security and technological objectives. Achieving these goals requires more than regulatory simplification. Europe also needs targeted industrial investments to scale up strategic manufacturing, accelerate innovation, strengthen industrial value chains and address infrastructure and energy bottlenecks. The Industrial Accelerator Act should therefore be complemented by dedicated EU funding instruments within the new European Competitiveness Fund, that support projects and ecosystems with the greatest potential to strengthen Europe’s competitiveness, resilience and industrial capacity. Such funding should be awarded through competitive calls and directed to local and regional innovation ecosystems capable of delivering transformational impact, based on excellence, innovation potential and strategic relevance rather than regional GDP levels or cohesion-based criteria. In this way, EU investments can be channelled where they generate the greatest value for Europe as a whole.
Read the Helsinki-Uusimaa Regional Councils amendment proposals for IAA here.