Lead Market Initiative

The development of sustainable construction practices is one of six key areas singled-out by the Commission's Lead Market Initiative. FIEC believes this could lead to better regulation, more standardisation and greater efficiency in the industry.

On 7 January the European Commission published proposals designed to unlock market potential for innovative goods and services. It put forward plans aimed at lifting obstacles to innovation in six key areas - e-Health, protective textiles, recycling, bio-based products, renewable energy and sustainable construction.

The Commission believes these sectors benefit from a strong technological and industrial base, but are more dependent than other markets on a favourable regulatory framework. Together they account for an annual turnover of more than € 120 billion and 1,9 million jobs in the EU. By virtue of this initiative, they may increase to over € 300 billion and over 3 million jobs in the EU by 2020.

The aim of the "Lead Markets Initiative for Europe" (LMI) is to accelerate the development of these fast-growing markets through concerted policy initiatives. According to the Commission, this should lead to European enterprises - especially SMEs - taking advantage of fast-growing global markets with a competitive advantage as lead producers.

Commissioner Günter Verheugen, responsible for enterprise and industry policy, said, "Europe must develop innovation friendly markets in a more targeted way, creating conditions to facilitate the marketing of innovative products and services. The LMI has identified promising emerging markets in which the European Union has the potential to become world leader and where coordinated action is urgently needed."

The Commission has presented an action plan for the next few years for each market with a set of policy instruments aimed at boosting the competitiveness of these lead markets

• Improving legislation: designed to foster innovation and avoid imposing undue burdens on business;
• Encouraging public procurement for such innovative goods and services;
• Standardisation, labelling and certification: encouraging standards that facilitate the smooth inter-operation of products and business processes and that raise recognition and user confidence in innovative products and services;
• Complementary instruments such as business and innovation support services, training, communication, financial support and incentives.

Sustainable construction

Accounting for 10% of GDP and 7% of the workforce in the EU, the construction industry is one of six lead markets identified. Buildings also account for the largest share of total EU final energy consumption - 42% - and produce about 35% of all greenhouse gas emissions.

According to the Commission, insufficiently coordinated regulation, coupled with a predominantly localised business structure, lead to considerable administrative burdens and high fragmentation of the sustainable construction market. It also sees problems with ways in which existing public procurement rules can be exploited to generate greater demand for innovation-oriented solutions.

Consequently, a more goal-oriented approach to construction in the form of a "lead market on sustainable construction solutions" is needed.

Besides applying its better regulation policy, the EU may look to improve regulatory efficiency through the implementation of accompanying measures and awareness campaigns. New initiatives in the field of standardisation can also help to improve the situation and introduce concepts relevant for sustainability.

Competitiveness is the key:

The initiative is focused on a competitive, demand-driven approach that avoids "picking winners". Instead it is looking for ways the sector can build on new and existing technologies already available in Europe. The approach is also designed not to favour specific companies, which would be inconsistent with fair and open competition.

The Commission believes that in all these areas there is strong market potential for the immediate future, which will help boost profits, in particular, for small and medium sized enterprises (SMEs), which are the dominant drivers of innovation.

The LMI is part of the EU's broad-based innovation strategy that highlights the need for a more coherent use of policy to support innovation in Europe. Nevertheless, the success of this initiative will ultimately depend on the agreement of Member States as well as the active participation of business and other private stakeholders.