As Europe continues to wrestle with the ongoing economic crisis it has somewhat been distracted from focussing on the future. While the immediate critical problem is solving the crisis, the issue facing us is how to kick start recovery and emerge poised for growth in a competitive global marketplace. Europe’s future growth and prosperity will depend on a number of factors including; economic stability, competitiveness, stimulating investment and creating a leadership position in sectors where we can create sustainable growth and employment.
The challenge, particularly for Government, is to focus beyond the immediate fiscal and monetary measures and to stimulate the economy to ensure we emerge resilient, adaptive and sustainable. Setting clear investment priorities, linked to strategic societal challenges like jobs, resource efficiency, climate, energy and access to affordable healthcare are critical as is the efficiency of public investment. In order to attract investment, Europe must demonstrate its attractiveness as a place to innovate and scale new businesses.
The sudden decline in previously leading sectors reinforces the need to diversify into alternative sources of prosperity. The opportunity exists to broaden the base of future economic growth. Resource efficiency, energy, environmental sciences, biotech, health will all be important. This presents a real opportunity for Europe which certainly has the talent and resources to strengthen its competitiveness.
We are faced with an important question – how to grow the economy and manage finite resources while improving life for a growing global population? In our view we are presented with a false choice great economics or great environmental performance? Europe can accomplish both by successfully deploying products and services which help reduce our environmental footprint and at the same time improve competitiveness.
GE’s ecomagination growth strategy provides excellent proof points for how such an approach can create value. Since 2005 we have invested over $5bn in R&D and we have generated more than $100 billion in revenues from ecomagination products and solutions. At the same time we reduced greenhouse gas emissions by 22% and water consumption by 30% resulting in savings of $130 million in energy costs.
Competiveness and growth depends on reliable energy supplies and availability of affordable products and services. Rapidly developing regions are demanding an increasing share of the world’s energy resources. We have seen how Europe is vulnerable to geopolitics and disruptions to supply. Europe faces a big challenge. Today it produces only 57% of its energy consumption. Our growing dependence on imports from outside Europe is a matter of potential concern for industry. 85% of the oil use and 65% of the natural gas is imported and that is expected to continue to rise. The cost of importing EU energy in 2011 was €400bn; failure to act on efficient use of natural resources is to the detriment of growth and competitiveness.
Addressing these challenges calls for a fundamental transformation in the way Europe supplies and consumes energy incl. a rapid shift in investment to low carbon energy efficient technologies, a shift in thinking about efficiency from merely the demand side to addressing supply side efficiency and ultimately end to end, system-wide efficiency. As we transition to a low carbon economy we also need an open and informed debate about future energy policy including energy mix and technologies including renewables, natural gas, biogas and unconventional gas.