* EU paper promotes set of new technologies to boost GDP
* Manufacturing job losses 3 million since crisis
* Advanced manufacturing markets like biotech to double by 2015
BRUSSELS, Oct 8 (Reuters) - The European Commission wants to revive the European Union's declining manufacturing sector by asking countries to invest heavily in new technologies such as 3D printing, says a leaked paper seen by Reuters.
Key manufacturing industries in Europe have shrunk and the EU's main regulators want to ensure that new technologies are exploited to cheapen manufacturing costs and increase production.
The paper which outlines the bloc's future industrial policy said the commission wants to raise manufacturing from 16 percent to 20 percent of EU GDP by 2020 using new techniques such as 3D printing which builds objects using instructions from a printer.
Enthusiasts for 3D printing say it will revolutionise manufacturing in electronics such as mobile phones and save millions in costs as it would be as cheap to produce one phone as it would be to make thousands.
Some predict that in the more distant future households will have such printers to make mundane objects such as shoes.
The Commission also wants countries to invest heavily in advanced technologies such as industrial biotechnology which uses living cells to make materials such as chemicals, detergents and paper.
The market for such technologies is tipped to grow by 50 percent from 646 billion euros to more than 1 trillion euros by 2015, the paper said.
Industrial production has declined 10 percent since the crisis and more than 3 million industrial jobs have been lost.
The car industry is among the hardest hit, with large over capacity in mid-market car makers in France, Spain and Italy.
Total European car sales fell 6.6 percent in the period from January to August this year.
The paper indicates that the EU has not exploited past emerging industries such as rechargeable lithium batteries.
It says European firms hold more than 30 percent of the relevant patents "without any production of such batteries taking place in the EU".
To reverse such trends the Commission proposes non-binding targets for manufacturing and investment, both public and private.
The European commissioner in charge of industrial policy Antonio Tajani will launch the new proposals on Wednesday.
The policy will also promote green vehicles, smart grids, sustainable construction materials, and so-called key enabling technologies which include nanotechnology and photonics. (Editing by Claire Davenport and Jon Hemming)