Transformation is faltering

How Europe could catch up with China and the USA again

Europe was the market leader in the automotive industry for a long time.

(Bild: AFP)

Europe has gone from being a pioneer to a laggard. Germany used to be the world market leader in PV systems, but has long since been overtaken by China. 85 percent of all solar panels worldwide are produced there. The same applies to electric cars. Climate activists and industry see policy failures.

The President of the Alpbach Forum, Andreas Treichl, addressed this issue at this year's event and settled accounts with politicians. "We are great at announcing things, but unfortunately we are not excellent enough at implementing them. It was promised that we would be pioneers in digitalization, that we would make progress in the green transformation, but none of this has happened and will not happen again." This is the fault of the parties, who are too focused on clientele interests.

The "Krone" asked around at the forum. "We could have been prepared much earlier by politicians with state regulations for a phase-out of fossil fuels or at least for diversification. But for a long time we had the image of being the world market leader in the automotive industry. We really were for a long time and missed the boat when it came to entering the new technologies," analyzes book author Katharina Rogenhofer.

President Treichl settles accounts with politics in Alpbach.

(Bild: EFA/Marko_Risovic)

In some areas, Europe is still the world market leader, for example in heat pumps. "In many areas, however, the race is not yet decided or it could turn." If you look at mobile telephony, for example, electronic devices have moved across the globe in terms of market leadership - from Nokia in Finland to the USA and then China. "I don't just believe that we don't need to invest more just because we're behind somewhere, like with electric cars."

"Industry will stay there if we focus on the good technologies"
Europe needs to focus much more on green technologies. "Industry will stay here if we focus on the good technologies and get enough renewables. And that will create the jobs of the future, the prosperity of the future. Every euro invested pays off." The next government would have to implement the EU's Green Deal and Industry Act well and invest in the transformation. "This train has long since left the station. It will now go in this direction. The question is who will get there the fastest."

Katharina Rogenhofer

(Bild: Heribert Corn/Zsolnay)

The economy recently painted a gloomy picture. "The industry is still in a bad way, there are no signs of recovery in all trade associations," said Andreas Mörk, Managing Director of the Industry Division of the Austrian Federal Economic Chamber (WKÖ). National and European climate policy is having a braking effect. "A one hundred percent decarbonization of the industry is not possible from today's perspective," said Robert Schmid, environmental spokesman for the Federal Industry Division and Managing Director of the Lower Austrian building materials manufacturer Baumit.

Study

In contrast, a study commissioned by the Kontext Institute, of which Rogenhofer is a board member, sees the greening of industry as a lever for long-term and structural gains for the European economy. The study by Cambridge Econometrics modelled two scenarios for the period from 2022 to 2050 and their effects on the economy and labour market as well as on energy consumption/production, energy prices and greenhouse gas emissions in the EU and Austria: a business-as-usual scenario and a scenario with a significantly more ambitious greening of industry.

According to this scenario, Austria would generate three billion euros more gross domestic product (GDP) in 2030 as a result of a sustainable EU industrial policy; in 2040, GDP would already be twelve billion higher, and in 2050 it would be as much as 23 billion higher compared to scenario 1. In relative terms, GDP would be 3.3 percent higher in 2050. For every euro invested, three euros more in economic output will be generated in this country in the long term (in 2050).

Economics Minister Kocher warns against protectionist measures

(Bild: Tomschi Peter)

"Be careful not to get into any trade wars"
In an interview with the "Krone" newspaper, Minister of Economic Affairs Martin Kocher (ÖVP) certainly sees problems in areas such as e-cars and PV systems. However, there are also technologies in which Europe is leading the way, including turbines in hydroelectric power plants and heat storage power plants. "And we have strengths in wastewater management and recycling." Many European manufacturers are planning to take a big step in the next one, two or three years when it comes to electric cars. "I don't think we should be too negative about this. I'm sure that the technology available in Austria and in other European Union countries is very good. But the strong competition is the problem." Here we have to be careful not to get into any trade wars with subsidies and punitive tariffs.

According to Kocher, we shouldn't be naive, but at the same time we should make sure that we don't reduce each other's prosperity with strong protectionist measures. "And there will still have to be combustion cars in certain areas after 2035 because there is simply no other technical option. But I also don't think it's right that politicians can anticipate all consumer decisions. The uncertainty that currently exists - will I buy an electric car, will I buy a combustion car, and what will the infrastructure look like in the next five to ten years, etc. - cannot be completely taken away by politics."