Minister of Economic Affairs Katri Kulmuni's speech at the Europe Forum Turku on 29 August 2019
(CHECK AGAINST DELIVERY) Dear friends, dear political and business leaders, I’m delighted to be here at the Turku Europe Forum’s Economic Day today. Active discussion about the future development of the internal market, competitiveness and innovation is urgently needed to promote future policy actions that match future needs.
Finland has set an ambitious objective – that the EU would become the most competitive and socially inclusive climate neutral economy globally. Our aim is that during Finland’s Presidency, the EU institutions, Member States and all of us together, as European decision-makers, could achieve a joint vision of a new growth agenda for the EU.
Dear friends, why does the EU need a new design for sustainable growth? We, in Europe, are facing global challenges. Firstly, climate change requires rapid action on a global scale. Secondly, very rapid technological developments are changing our lives, for example through digitalisation, automation and artificial intelligence. Thirdly, global competition is fierce and requires the EU to step forward as a strong global actor.
Therefore, we urgently need a move towards an economically, socially and environmentally sustainable economy. It is essential that we adopt an integrated approach to the internal market, digital economy industrial and innovation policies, and Europe’s external competitiveness.
I will now come to the key elements in the new design for sustainable growth. To create sustainable growth in the EU during the next five years, we need:
- an effective EU single market
- a transition towards a climate neutral economy
- a modern industrial policy driven by a digital economy, with a strong focus on research and innovation
- new skills and continuous learning
- an active trade policy as an external dimension of EU competitiveness
Finland’s Presidency sees that to create sustainable growth agenda in the EU we need those five elements. We, as the Finnish Presidency, see that the implementation of the future growth agenda should become a core task of the new Commission. In the agenda, holistic policy measures need to be ambitious - and at the same time – realistic.
I will now be happy to talk more in detail about the first three elements that will create the policy framework for the new growth agenda.
1. Starting from point one, the single market is one of Europe’s greatest achievements. The single market offers businesses, consumers and citizens a direct and concrete way of benefiting from the EU. For Finland, a small Member State on the outskirts of Europe, the EU market – with more than 500 million citizens, and the free movement of goods, services and employees – has opened up tremendous business opportunities.
Smart and forward-looking single market policies are vital for the competitiveness of Europe to have a scalable single market. The focus should be on strengthening services, particularly digital services as an integral part of the single market. To benefit even more from the single market, we need to build a stronger single market, seize any unused opportunities, and remove any remaining barriers.
Now, during Finland’s Presidency, we have a crucial role to play in determining the future of the single market. The June European Council adopted the five-year Strategic Agenda for the European Union for the period 2019–2024 to guide the work of EU institutions. One of the four priorities of the agenda is developing a strong and vibrant economic base. This includes the internal market, industrial policy and the digital economy.
2. Second main element of the sustainable growth agenda will be the transition towards a climate neutral society. Tackling climate change is a must – and it is also an economic opportunity. Research and innovation play an important role as key-drivers to turn those opportunities towards sustainable economic growth.
We want to take the UN sustainable development goals and the Paris Agreement goals, as well as Finland’s own climate targets, as an opportunity for industry renewal. By setting ambitious goals, by supporting research and development, and by striving to create a level playing field for businesses, Finland and the EU are encouraging businesses to seek climate-neutral and resource-wise solutions.
Our emphasis needs to be on reducing emissions both significantly and cost effectively, and at the same time boost innovation-led economic growth over the next decades. The EU should aim to achieve net-zero greenhouse gas emissions by 2050.
3. Thirdly, I will say a few words on modern industrial policy including digital and data economy. We need to set the objective of Europe becoming a global leader in the digital economy. Digitalisation, artificial intelligence, data and platform economy are key drivers for the EU’s success in the global market. Furthermore, digital transformation should be integrated into our efforts to develop the single market.
Data will play a key role as a driver of new business and services. Europe needs a set of policy actions related to the data economy, including data access, data sharing, use of data, re-use of data, interoperability and trust. Data policy principles are required right now because our societies are becoming more and more networked, knowledge-intensive and digitalised. In addition, it is important that we create incentives for data sharing and joint use, and make sure Europe remains an attractive investment environment for data-driven business. Indeed, we should improve data mobility both within the EU and worldwide.
Moreover, I would like to bring up Artificial Intelligence. Today, we speak so much about Artificial Intelligence, because AI is changing our lives. And at the same time, the AI holds the potential to improve our lives and solve the challenges that we face as European citizens. Therefore, I see that Europe must uphold ethics and trust when developing data economy and AI. There needs to be a uniquely European way to digital economy.
During Finland's Presidency, our objective is to promote the introduction of artificial intelligence in all sectors, and to create AI-based solutions that meet the needs of society and improve competitiveness. When it comes to the ethical development and use of artificial intelligence, the EU has a global competitive edge.
I believe that to drive innovation and new business in the European Union, we must promote international expertise, research and development, and build ecosystems that bring together the worlds of research and business. It is important that the EU policy and financial instruments are used to encourage innovation ecosystems and to spur growth in strategic value chains. Furthermore, ecosystems built on cutting-edge research and expertise will also attract the talent and investment the EU needs.
Dear participants of the Europe Forum, a well-functioning single market and an effective digital economy are essential for the growth and competitiveness of Finland and Europe alike. It is important to make sure that any EU-level measures take into account the significance of services, particularly digital services, for Europe’s growth and competitiveness. Services generate an increasingly large proportion of the value added in the manufacturing industry, and they represent more than 60% of the EU’s gross domestic product.
Two things must be taken into account as we begin to implement the EU industrial and innovation policy. Firstly, the majority of businesses are small or medium-sized. Secondly, successful industrial renewal depends on the labour force. Socially sustainable growth can be achieved. This requires that businesses of all sizes are given the opportunity to develop their activities. Moreover, we need to ensure that the skills and competence of the workforce meet the needs of modern industry. A reliable and predictable business environment encourages new investments and the creation of new jobs. This EU-level aim is also an important goal of our Finnish Presidency.
The Member States and the Commission should pay more attention to achieving consistent, effective and transparent implementation of single market regulation. By doing this, we can create a genuine single market that covers the entire EU. In a rapidly changing digital environment, it is particularly important to ensure that regulation provides opportunities for new business.
The Informal Meeting of the Ministers responsible for Competitiveness in Helsinki on 4th and 5th of July provided the first opportunity to share ideas on the priorities of the work programme of the next Commission. Ministers welcomed the comprehensive approach to sustainable growth. We look forward to continuing the work on the sustainable growth agenda at the September and November COMPET Council. At ministerial level, we focus on the holistic approach to single market, digital economy, industrial policy and research & innovation to create a new sustainable growth agenda for the EU.
The guidelines for the next five years of the Commission’s next President, Ursula Von der Leyen, were published in July. These guidelines contain the same targets as the agenda for sustainable growth, which Finland is advancing during its Presidency. According to Von der Leyen, industrial policy and the achievement of climate targets go hand in hand. Similarly, the digital economy is closely linked to the development of products and services. Small and medium-sized enterprises have been instrumental in promoting sustainable growth.
It is important that the EU institutions and Member States share the same views. Only by agreeing on key policies can we commit to the implementation of measures that will secure the future of the European Union.
Dear political and business leaders - to conclude my remarks, economic growth is needed - and it must be environmentally and socially sustainable.
A new design for growth is necessary for the Single Market, for transition towards a climate-neutral society, for industrial policy and for innovation and research in the European Union. Let us set this goal together, with full of hope and ambition, and ready to work.
We need to foster competitive and socially inclusive EU to live up to the expectations of the European businesses and citizens. I hope that on New Year’s Eve, we will have a sustainable growth agenda for the European Union for next five years.
Thank you!