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Committee urges caution on competitiveness

The recognition of the inevitability of the globalisation of trade features heavily in the opinion of the Committee of the Regions on 'The competitiveness of European enterprises in the face of globalisation - how can it be encouraged?'

While recognising that there needs to b...
The recognition of the inevitability of the globalisation of trade features heavily in the opinion of the Committee of the Regions on 'The competitiveness of European enterprises in the face of globalisation - how can it be encouraged?'

While recognising that there needs to be a European approach to cater for this trend, the opinion also points out that competitiveness is not always easy to define. For example, the competitiveness of a company is far easier to define than that of a region. The Committee defines competitiveness as the ability to create jobs in the long term and to promote sustainable economic development. It stresses that in the interests of social cohesion, The pursuit of competitiveness should not lead to a 'winner states and loser states' scenario.

It is also important to remember, the Committee continues, that competitiveness in itself requires an imbalance - a favourable trade imbalance. It highlights the fact that the EU has, on the whole, unfavourable trade relations with the US and Japan and yet overall its trade balance is favourable. This means that the favourable situations are with less developed third party states. For this reason, the Committee warns about the dangers of an imbalance occurring at regional level if there were to be excessive promotion of European enterprises without taking account of the possible exaggeration of imbalances that could take place on this level.

Competitiveness should not be judged solely on the basis of whether a region can attract investment, but more on whether it has the conditions to retain that investment. To this end, the help that can be given in assisting start-up and smaller local enterprises figures as a key element and support should be sought from the EU for such ventures.

Concluding the opinion, the Committee makes a series of recommendations. These include: helping management of smaller firms, setting up a high performance venture capital scheme, paying increased attention to the needs of the highly competitive and labour-intensive tourist sector, a major improvement in the European infrastructure and mutual recognition of qualifications in the EU.
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