Report Highlights the Urgent Need for Strategic Measures to Enhance Resilience and Competitiveness of EU Firms Amid Supply Chain Challenges

Report Highlights the Urgent Need for Strategic Measures to Enhance Resilience and Competitiveness of EU Firms Amid Supply Chain Challenges

(IN BRIEF) The European Investment Bank (EIB) has released a report titled “Navigating Supply Chain Disruptions: New Insights on the Resilience and Transformation of EU Firms,” in collaboration with the European Commission’s Directorate-General for Internal Market, Industry, Entrepreneurship, and SMEs. The report highlights the adaptability of EU firms in facing supply chain challenges, emphasizing the role of intra-EU trade in mitigating disruptions. It identifies key issues such as limited access to raw materials and logistics problems, with 37% of firms citing these as significant obstacles. Notably, firms that rely solely on imports from within the EU reported fewer disruptions compared to those importing from China. The findings suggest that companies using custom inputs are more vulnerable to interruptions, while high-productivity firms are more likely to increase inventories and diversify trade partners. The report calls for coordinated EU strategies to strengthen competitiveness and support firms in investing in innovation and diversification. Key figures, including Román Arjona and Debora Revoltella, stressed the importance of a stable regulatory environment and the role of the Single Market in building resilient supply chains.

(PRESS RELEASE) LUXEMBOURG, 3-Oct-2024 — /EuropaWire/ — The European Investment Bank (EIB), in collaboration with the European Commission’s Directorate-General for Internal Market, Industry, Entrepreneurship, and SMEs (DG GROW), has released a pivotal report titled “Navigating Supply Chain Disruptions: New Insights on the Resilience and Transformation of EU Firms.” This report underscores the impressive adaptability exhibited by EU firms in responding to recent supply chain disruptions.

According to the findings presented during a workshop in Brussels today, intra-EU trade has played a crucial role in cushioning firms against the impacts of these disruptions. The report emphasizes that innovation, digital transformation, and enhanced management practices are driving both the growth and resilience of firms in the face of trade shocks.

The report outlines the significant challenges that EU businesses encounter due to ongoing global trade disruptions in the aftermath of the pandemic, underscoring the necessity for coordinated EU-wide strategies. Recent crises have revealed vulnerabilities within supply chains, drawing attention to strategic dependencies. Specifically, the report indicates that 37% of EU firms view access to raw materials and semiconductors as a primary challenge, while 34% cite logistics and transport disruptions as impactful.

Interestingly, while only 22% of firms dependent exclusively on imports from within the EU reported logistical issues, the proportion of firms relying on imports from China experiencing similar disruptions surged to 44%. The findings further reveal that companies utilizing custom inputs are more susceptible to interruptions, whereas high-productivity businesses tend to increase their inventory levels and are less inclined to cut imports.

Nonetheless, EU companies embedded in global production networks have demonstrated remarkable agility and the ability to adapt in response to recent supply chain challenges. Many firms have adopted various strategies to cope with global trade disruptions, with inventory management emerging as the most common approach. Additionally, firms are diversifying their trade partners to mitigate dependency risks.

To bolster the EU’s competitiveness, it is essential to provide firms with stable regulatory conditions and access to financing, enabling them to diversify their trading relationships and invest in innovation.

Román Arjona, Chief Economist at the Directorate-General for Internal Market, Industry, Entrepreneurship, and SMEs of the European Commission, remarked, “European companies are implementing strategies to navigate ongoing uncertainties. This enlightening report highlights the critical role of the Single Market in establishing resilient global supply chains and protecting firms from external shocks.”

Debora Revoltella, Chief Economist at the EIB, added, “Economic security relies heavily on the capability of EU firms to effectively manage disruptions. Our findings underscore the necessity of supporting businesses in their investments in innovation and digitalization, while also diversifying supply sources. In an ever-evolving global landscape, fostering resilience is not just a requirement but a strategic imperative to enhance the competitiveness of the EU economy.”

Background information

About the EIB

The European Investment Bank is the long-term lending institution of the European Union owned by its Member States. It provides finance and expertise for projects that contribute to EU objectives. The EIB Group works closely with public and private sector partners to support sustainable investment, job creation, economic growth and innovation across Europe.

About the DG-GROW

The Directorate General for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW) is the Commission department that works to support an open, seamless and resilient Single Market, with open borders and free flow of goods and services. The department supports the competitiveness, growth and resilience of the EU economy, while focusing on strengthening the leadership of European industries across different industrial ecosystems.

Media Contact:

Sertore Serena
s.sertore@eib.org
+352 4379 – 70859

Press Office

press@eib.org
+352 43791

SOURCE: European Investment Bank