COVID-19 has a positive impact on Lithuanian industrialist
Manufacturing is back to Europe and Lithuania is stronger than ever
Covid-19 has had a huge impact on European industry with tremendous economic losses due to disrupted spare parts import chains from Asia. However, this was not the case for every European country, with Lithuania standing strong with the economy shrinking by merely 1,8 % in 2020 when the average Eurozone fell by nearly 4% according to OECD.
The potential is much bigger
2020 France was the 12th largest export market for Lithuanian products, 2020 France was the 10th largest supplier of Lithuanian imports. France was the 3rd largest export market for Lithuanian services while France was the 14th largest supplier of service imports.
But the potential is much bigger. In the World Bank’s Doing Business 2020 survey assessing business conditions, Lithuania stands in 11th place out of 190 countries of the world. Therefore France, with its tremendous economic, scientific and technical potential, has an excellent opportunity to exploit Lithuania’s geographical, infrastructural, energy, human capital, professional preparedness and scientific readiness for future cooperation.
According to V.Janulevicius, President of The Lithuanian Confederation of Industrialists (LPK) “LPK has a long-standing relationship with our counterpart in France – Medef, over the years, we have had participated in various joint projects. For example, we’re cooperating with France in ‘Business Europe’, which connects business organizations of 34 European countries. Our goal is to balance regulation within EU zone and protect European industry and manufacturers against aggressive none EU competition, that distorts the EU market.”
So Lithuania has all possibilities to become a manufacturing hub for French and European industrialists. One of the major qualities of Lithuanian manufacturers is their flexibility and excellence. Most Lithuanian companies are SMEs, so it is easy to quickly re-orientate and adapt to clients’ needs, produce both in small as well as large quantities, adapt to the overall global situation and trends. In addition, Lithuania has high standards of the Northern Europe alike business culture: versatile and reliable business relations, motivated and highly skilled workforce, high quality and innovation are the dominating characteristics. That is visible in the R&D expenditure that has been significantly rising in the past 10 years. Another reason to work with Lithuania is convenient geographical location – Lithuania is a transit country. The delivery time is relatively short – within 2 to 4 days to all directions in Europe with well-developed transport system: international airport; seaport; rail transport; road transport. And last but not least – large number of Lithuanian companies are being a part of Industry 4.0, they have an extensive experience working with companies in Europe. Digital transformation, innovations, R&D, automation is integrated into the processes and are being promoted as priorities on the state level by the Ministry of Economy.
Lithuania is watching France closely
Lithuania is also closely watching how France is acting upon the green policies. Five years after the Paris Agreement, Governments and companies, driven by the urgency of decarbonizing economic and industrial activities massively, are increasingly relying on renewable and low-carbon hydrogen.
France, for its part, presented in 2020 a national strategy for the development of low-carbon hydrogen, the ecological, technological and economic challenge of which is to create and to structure a cutting-edge French industrial sector competitive at an international level.
This July the European Commission published its Fit-for-55 package. Its aim is to align the European legislative arsenal with the new European ambition to reduce greenhouse gas emissions by 55% by 2030.
Looking forward to the future
Europe and France are now actively considering proposals to strengthen the industrial base and competitiveness of the EU member States bringing back the manufacturing to European sole. The EU needs an ambitious European industrial policy, and its manufacturers, suppliers and other parties in the supply chain needs measures to strengthen the EU’s economy. No one other than the Europeans themselves has an interest in a strong and united Europe, because in that case, it will become a strong competitive force. The developments in global markets in recent years show that the European Union needs an ambitious industrial strategy to compete with other regions of the world, such as India, the United States, which have made their industries a priority on the political agenda. There is a need to think about how to strengthen the competitiveness of European industry, and how to protect the EU’s strategic infrastructure and technologies, which often give the EU industry a competitive advantage.
So despite the difficulties related to pandemic, companies have challenges as well as opportunities ahead to think and implement the digital and green transformation. Lithuania’s economy is not that large, therefore flexible enough to be smoothly transformed. “We understand that the green deal is an economic course. Without resources in Lithuania, we may create added value in our country producing green heat and green cold from green electricity” stated Mr Janulevicius.
So, it would be very wrong to assume that the Green Deal is just a burden on businesses. In fact, it is an opportunity for all European businesses, including Lithuanian, to transform, to change the direction so that new jobs can be created as well as well-being for all society in green and healthy environment.
There is a great opportunity thanks to the decision of the European Commission to renew the Industrial strategy. This step by the EC is based on the need for industry’s ambitions to be fully in line with the new realities of the post-COVID-19 crisis and to foster the transition to a more sustainable, digitalized, resilient, and globally competitive economy.
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