Reduce regulatory burden to unleash competitiveness
Regulatory burden is strangling Europe's technology industries. Between 2019 and 2024, the EU issued 13,000 new regulations compared to 5,500 in the US, and the effects of this tsunami of regulation are clear to see. First estimations put annual growth for 2024 at 0.7% in the euro area and 0.8% in the EU, compared to 2.2% growth in the USA and 4.5% in China.
In response, Orgalim has created a report listing specific examples of how incoherent or inadequately designed EU legislation negatively affects Europe's technology industries. The report features concrete proposals and a 10-point Action Plan on what needs to change to minimise regulatory burden and costs in the future and boost competitiveness across Europe.
“Europe’s technology industries are key enablers of the green and digital transitions and the backbone of a competitive economy, but disproportionate and excessive regulation is holding them back. The Commission’s words on boosting competitiveness must be matched by action - simplify at full speed!”
Europe's metal technology, mechanical engineering and electrical engineering, electronics and ICT sectors are in a particularly challenging economic situation. They suffered from a second consecutive year of downturn in 2024, with a combined downturn of 4.8% and a further 0.5% contraction in real turnover predicted for 2025. This downturn can partly be attributed to excessive regulatory burden and high energy costs.
Regulatory burden: the problem has been acknowledged...
The European Commission has acknowledged that regulatory burden must be reduced. Ursula von der Leyen assigned each Commissioner targets to reduce reporting obligations by 25% for all businesses and by 35% for SMEs in their respective policy areas. The European Council's strategic agenda 2024-2029 also highlights the need to decrease regulatory burdens at all levels to allow businesses to flourish. Additionally, Mario Draghi’s report, ‘The future of European competitiveness’ recommends achieving a reduction of reporting obligations of 50% for SMEs and small mid-caps.
...but not yet resolved
The focus on reducing regulatory burden is a welcome and long-overdue step. However, it's important that reductions happen fast and benefit technology manufacturers on the ground. Such steps will help to unleash the full potential of the advanced manufacturing, carbon-neutral energy, electrification and clean manufacturing technologies needed to get to net-zero.