WWW.THESES.XLIBX.INFO
FREE ELECTRONIC LIBRARY - Theses, dissertations, documentation
 
<< HOME
CONTACTS



Pages:     | 1 |   ...   | 10 | 11 || 13 | 14 |   ...   | 16 |

«Original citation: Owen, Geoffrey (2012) Industrial policy in Europe since the Second World War: what has been learnt? ECIPE Occasional paper, 1. ...»

-- [ Page 12 ] --
ture, it seemed, was not only holding back productivity growth, but also making it difficult for Europe to adapt to the changing international division of labour. The fact that so much of Europe’s trade was concentrated in sectors with medium-high technologies and low-tointermediate labour skills exposed European countries to competition from producers in emerging countries that were upgrading the skill intensity of their exports. “Adaptability and structural change, allowing a more robust situation of comparative advantage, are critically needed if the EU is to maximise the gains from the integration of China, India and other fast growing economies into the world economy”.167 These were the considerations which, before the financial crisis, were prompting some European governments and the European Commission to undertake a reappraisal of industrial policy. Was it enough to rely on the market to generate the structural changes that were needed, or should governments be more active in steering European companies into industries that were likely to be both high-growth and defensible against low-wage competition?

4. THE CRISIS AND ITS CONSEQUENCES: A REVIVAL OF INDUSTRIAL POLICY?

The severe recession that followed the banking crisis prompted government intervention on an unprecedented scale. Some of the most spectacular moves came, surprisingly, from the US. In a decision reminiscent of the rescue of British Leyland in the mid-1970s, the Obama Administration provided financial support to two of the country’s largest car manufacturers, General Motors and Chrysler, in order to prevent their collapse.168 As with British Leyland, General Motors’ problems were largely self-inflicted – it had been losing ground to Japanese and other foreign manufacturers for many years – but the Obama administration was prepared to override the market in order to preserve an American-owned company because of its importance as an employer.

Employment had also been falling in other parts of the manufacturing sector, not because of mismanagement, but because American companies were moving part of their production to countries where labour costs were lower. Offshoring was not a new phenomenon – in labour-intensive industries such as textiles and clothing it had begun many years earlier – but it was spreading to industries such as electronics and affecting the higher-value parts of the production chain. Two economists, Gary Pisano and Willy Shih, writing in the Harvard Business Review, pointed out that outsourcing in electronics had not stopped with low-value tasks like simple assembly or circuit-board stuffing, but had also affected “sophisticated engineering and manufacturing capabilities in a wide range of products”, such as light-emitting diodes, batteries for electric cars and flat panel displays for TVs, computers and hand-held devices.169 They urged the government to reverse the slide in the funding of basic and applied science and to focus resources on “grand challenge problems” such as climate change where collaboration between the public sector, companies and universities could create new industrial opportunities.

This article provoked a lengthy debate in which some economists argued that Pisano and Shih were too pessimistic. David Yoffie, an influential writer on technology, suggested that the loss of manufacturing capacity in a high-cost country like the US was inevitable and should not be a cause for concern. “The future of US competitiveness in high-tech industries such as computers, software, communications and electronics may depend more on the transition to services than trying to retain the country’s manufacturing base”. Yet the PisanoShih line was supported by several business leaders, including Andrew Grove, former head of Intel, and Andrew Liveris, chief executive of Dow Chemical Company.170 41 No. 1/2012

ECIPE OCCASIONAL PAPER

The same theme was taken up by Michael Spence, a Nobel prize-winning economist. Spence argued that persistently high unemployment in the US was due in part to the disappearance of manufacturing jobs and that this trend must be reversed.171 There was not enough incentive for US companies to invest in techniques that enhanced labour productivity in the tradable sectors of the economy. This was not a market failure in the conventional economic sense, Spencer suggested, but it had to be countered by new investment in advanced technologies with public support.

Among European countries France is the one where the deindustrialisation debate has been running most strongly.172 During his second term as President of the Republic, Jacques Chirac invited Jean-Louis Beffa, the head of St Gobain, to make proposals for a new industrial policy which would ensure that France did not fall behind in the industries of the future. Beffa was asked to examine in which sectors and by what methods France could set in train “une relance ambitieuse des grands programmes scientifiques et technologiques” - an echo of the grands projets of the past. In his report Beffa called for “mobilising programmes” targeted at large risky projects which needed a state contribution for their financing.173 These projects would be run by a new agency, Agence de l’innovation industrielle (AII), and would be focused on five main areas: energy, transport, environment, health and information technology.





The new agency was set up in 2005 with a budget of €2bn, and over the next two years some twenty projects were started, most of them jointly financed with French or European companies. One of the first was Quaero, an attempt to create a search engine that would compete with Google in the US. Thomson and France Telecom were the prime movers in this venture, in which German companies also agreed to participate, but it made little progress and the Germans subsequently withdrew. AII was subsequently closed down, after Chirac had left office, and its functions transferred to another government agency, OSEO, which had a wider responsibility for supporting innovation in small- and medium-sized firms.174 Another French initiative during the Chirac presidency was the creation of pôles de compétitivité, or competitiveness clusters, loosely based on the Silicon Valley model. The idea was to bring together in a particular region firms, research centres and training and education facilities belonging to the same industrial sector, and to encourage them to work together on innovative projects. Some 67 clusters were selected, covering a variety of fields including low-technology industries as well as advanced sectors such as nanotechnology and biotechnology. This programme has been criticised on the grounds that the number of clusters was too large, and that public sector officials were ill equipped to identify the sectors and regions that deserved support.175 When Nicolas Sarkozy took over the presidency in 2007, he had already established a reputation as a defender of French industry. His immediate task when the financial crisis hit was to rescue the banks, and this was followed by the provision of low-interest loans to the French car manufacturers to prevent plant closures, together with an incentive scheme to encourage car buyers to replace old models with newer, fuel-efficient vehicles. Sarkozy was also concerned to prevent French companies which had been weakened by the recession from being snapped up by foreign predators. “I will not be the French President”, he said in 2008, “who wakes up in six months’ time to see that French industrial groups have passed into other hands”.176 In 2008 President Sarkozy announced the establishment of a Strategic Investment Fund, with a remit to take minority stakes in French companies with high growth potential which needed additional capital. In its first full year of operation the fund made investments totalNo. 1/2012

ECIPE OCCASIONAL PAPER

ling €1.2bn in twenty-one companies, including Meccano, the toy manufacturer, and Daily Motion, an internet start-up. Critics of the fund were relieved that the fund was not used to rescue “lame ducks”. Its operations were for the most part similar to those of a private equity group, but with a strong orientation towards preserving French ownership; in at least one case, when one of the companies in which it had invested was put up for sale, the Fund used its votes to ensure that the buyer was French, despite higher offers from non-French companies.177 As Sarkozy explained in a later speech, he was determined to use the power of the state to resist de-industrialisation and to strengthen France’s position in key industries, just as his predecessors had done. Where the government was a shareholder in an industrial enterprise such as Renault, it should use its influence to ensure that the company’s strategic decisions were in the best interests of the country; it was not acceptable, Sarkozy said, that the privately-owned Peugeot had two thirds of its worldwide employees in France, while Renault had only one third.

How far Sarkozy could go in the direction of interventionist policies was constrained both by budgetary pressures and by European Union rules on state aids; there was no question of reverting to old-style French dirigisme.178 Nevertheless, his activism helped to spark a renewed interest in industrial policy in other European countries, not least the UK Some British business leaders were increasingly unhappy with the laissez-faire approach towards industrial policy which had been followed by successive governments. In a widely noted speech Sir John Rose, chief executive of Rolls-Royce, the aero-engine manufacturer, deplored the loss of expertise in such industries as railways, power generation and nuclear power, comparing the continued success of French and German companies like Siemens and Areva with the virtual disappearance of their British counterparts. He urged the government to develop a clearer sense of direction for industry. “We need”, he said, “a framework, or a business route map, to create context, drive focus and help prioritise public and private sector investment. Unfortunately the fear of returning to anything that remotely resembles centralised industrial planning has resulted in even the discussion of such a framework being off limits”.179 Sir John’s remarks appeared to have little impact on government policy; Labour was sticking to the non-interventionist stance which it had inherited from Margaret Thatcher. Towards the end of the government’s term, however, there were signs of a change in thinking. Peter Mandelson, who was brought back to the government in 2008 as Business Secretary, believed that the UK had allowed itself to become too dependent on financial services. Drawing on advice from Rose and other industrialists, he looked for ways of rebalancing the economy, but not by means of old-style intervention. Government needed to help in those areas where businesses “would not or could not take the lead because market signals or incentives were not strong enough”.180 In several speeches and interviews he referred admiringly to the French government’s industrial policy, suggesting that the UK could learn from the way the French government took care of high-technology companies.181 This was warmly welcomed by the Trades Union Congress, which argued that what Sarkozy was doing through the Strategic Investment Fund should be imitated in the UK.182 In a White Paper published in 2009, Mandelson called for a “new activism” on the part of government to help business exploit the opportunities that were becoming available, especially in advanced technologies.183 The government should be willing to consider “targeted intervention” where clear gains could be achieved. In a review of policy published shortly 43 No. 1/2012

ECIPE OCCASIONAL PAPER

before the 2010 election, the government reported several examples of sectoral intervention, some of which were directed at individual companies (for example, a grant to Nissan to support a new battery plant and the manufacture of a new electric car) while others were concerned with advanced technologies, including composite materials, plastic electronics and industrial biotechnology.184 When the Conservative-Liberal coalition government was formed after the 2010 election some of these grants were withdrawn. The new Business Secretary, Vince Cable, said he had no intention of “trying to micro-manage the economy at the level of individual companies or so-called national champions”.185 On the other hand, he shared Peter Mandelson’s view that the manufacturing sector had declined too far and needed to be revived. “Supporting the industries of the future”, he said in a later speech, “requires addressing some of the market failures involved”. One such failure was in the innovation phase of new technologies, hence the decision to establish a network of Technology Innovation Centres, loosely based on the Fraunhofer model in Germany. The government also set up a Regional Growth Fund to provide limited amounts of seed capital as a catalyst for new investment by the private sector, especially in areas of the country where there had been a historic reliance on the public sector for jobs. With these and other supportive policies in place, Cable was confident “that world-class manufacturing will once again be at the heart of our economy”.186 Least affected by worries about de-industrialisation was Germany. Thanks in part to labour market reforms and cuts in welfare expenditure carried out between 2003 and 2007, it had come through the financial crisis in relatively good shape. Germany also benefited to a greater extent than the UK or France from the booming demand in China for the capital equipment and other industrial goods in which German industry was especially strong. There was some anxiety in Germany about the continuing failure to match the US in high-technology industries, but no major new initiatives seemed likely beyond the strategy set out by the Ministry of Research and Education in 2006, subsequently revised and relabelled as the High-Tech Strategy 2020.



Pages:     | 1 |   ...   | 10 | 11 || 13 | 14 |   ...   | 16 |


Similar works:

«Apunte de Economía Dirección General de Estudios EVOLUCION DE LOS MEDIOS DE PAGO DISTINTOS AL EFECTIVO EN EL ECUADOR1 Apuntes de Economía No. 44 Elaborado por: Carlos Andrade H.* Abril, 2004 Resumen Con base a las reformas del sistema de pagos iniciadas por el Banco Central del Ecuador en junio de 2000, el presente trabajo realiza una descripción y evaluación de los principales medios de pago distintos al efectivo. El esquema analítico considera los medios de pago convencionales, como...»

«Munich Personal RePEc Archive Economic growth determinants in Latin American region: An empirical analysis based on bank systems role Christine Carton and Cely Ronquillo Global Conference on Business and Finance, Universidad Autonoma de Ciudad Juarez 16. January 2008 Online at http://mpra.ub.uni-muenchen.de/10832/ MPRA Paper No. 10832, posted 30. September 2008 05:40 UTC DETERMINANTES DEL CRECIMIENTO ECONÓMICO EN AMÉRICA LATINA: ANÁLISIS EMPÍRICO DE LOS SISTEMAS BANCARIOS1 Christine Carton...»

«Latin American Research Review Volume 35, Number 2, Pages 73-106 Neoliberalism, Corporatism, And Small Business Political Activism In Contemporary Mexico* Kenneth C. Shadlen, Brown University Abstract: In the 1980s and 1990s, neoliberalism and changing policy-making regimes presented social actors throughout Latin America with new challenges and opportunities. This article analyzes the political strategies developed by two organizations representing small manufacturers in Mexico for responding...»

«Economic Research Paper: 2010-03 TAX EXPENDITURES VS. BUDGETARY EXPENDITURES FOR CANADIAN POST-SECONDARY EDUCATION AZIM ESSAJI AND CHRISTINE NEILL1 NOVEMBER 2010 Both: Department of Economics, Wilfrid Laurier University, Waterloo, ON, N2L 3C5. Corresponding author is Neill: email cneill@wlu.ca. Tax expenditures vs. budgetary expenditures for Canadian post-secondary education1 Azim Essaji and Christine Neill2 Abstract Tax measures that reduce the tax burden on post-secondary students are a...»

«C A U S E S O F T A X R E F O R M I N L AT I N AMERICA, 1977–951 James E. Mahon, Jr. Williams College Abstract: Among the policy changes associated with neoliberalism in Latin America, tax reform has played a leading role as it has been crucial not only to price stabilization but also to managing economic liberalization. But it also has a larger significance, since it involved a reconstitution of core state powers, and these could prove useful to any future government that seeks to expand the...»

«EMPORIA STATE UNIVERSITY SCHOOL OF BUSINESS Course Syllabus Spring 2016 Our mission is to adaptively provide access to innovative business preparation for limitless opportunities in the region and beyond. COURSE NUMBER AND AC 413 ZA Auditing TITLE: CLASS MEETING TIME: W ESU-KC, room to be determined AC 304 Intermediate Accounting I PREREQUISITES: AC 353 Accounting Information Systems BU 255 Business Statistics Dr. George Durler INSTRUCTOR: Cremer Hall 311 OFFICE: M W 1:30 2:30, T R 11:00 11:30,...»

«Helping Under-Resourced Learners Succeed at the College and University Level: What Works, What Doesn't, and Why by Karla Krodel, Karen Becker, Henry Ingle, and Susan Jakes In today’s economy, institutions of higher education are invaluable forces of community change through both the students they educate and the engagement and advancement of the larger community. Economic forces are bringing an increasingly diverse student population to the doorsteps of these institutions. For educators to...»

«Making Sense of Globalization A Guide to the Economic Issues CEPR Policy Paper No. 8 François Bourguignon, DELTA, Paris Diane Coyle, Enlightenment Economics Raquel Fernández, New York University and CEPR Francesco Giavazzi, IGIER, Università Bocconi, Milano and CEPR Dalia Marin, Universität München and CEPR Kevin O’Rourke, Trinity College, Dublin and CEPR Richard Portes, London Business School and CEPR Paul Seabright, Université des Sciences Sociales de Toulouse and CEPR Anthony...»

«19 Distinguished Guests on the dais, esteemed Chairperson and members of the Governing Body, my dear colleagues, friends and beloved students: Assembled here on the 89th College Day celebration of Indraprastha College for Women, it is my proud privilege and honour to first welcome the very special people amidst us today. Our Chief Guest, Shri Shailesh Gandhi, is a household name synonymous with Right to Information (RTI). Shri Gandhi has been the Central Information Commissioner since September...»

«Evolutionarer Wertewandel In Einer Institutionellen Wirtschaftsethik Their capacity can simply well keep closed, I can lower you their summer currently to download to bullet of your market. In home, search a personal business for it may gain the application you are expected to leverage her area cause. Doing to your coffee, Executive Black Review was for over 640 presidents. An high specification limit, especially hidden for a Participating looks underground the kind debt. Practical collaterals...»

«A Chinese homecoming Robert Skidelsky Prospect January 1 2006 I had been plotting my return to China for about a year, and now an invitation from Lanxin Xiang, author of a book on the Boxer rebellion, to lecture in Shanghai in September 2005 made it possible. I say return, because the last time I had been on the mainland was in 1948, when I was nine years old. I was born in Harbin in Manchuria in 1939, came to England when I was three, and then went back to China with my parents in 1947, living...»

«201 Revista Uruguaya de Ciencia Política 16/2007 ICP Montevideo IMPUESTOS Y JUSTICIA DISTRIBUTIVA: UNA EVALUACIÓN DE LA PROPUESTA DE JUSTICIA IMPOSITIVA DE MURPHY Y NAGEL* Cristian Pérez Muñoz** Resumen: Recientemente Liam Murphy y Thomas Nagel han presentado una interesante y polémica propuesta para evaluar el carácter justo o injusto de los sistemas tributarios (Murphy y Nagel 2001, 2002; Murphy 2005a, 2005b). Su tesis central dice que un esquema impositivo será justo si y solo si...»





 
<<  HOME   |    CONTACTS
2016 www.theses.xlibx.info - Theses, dissertations, documentation

Materials of this site are available for review, all rights belong to their respective owners.
If you do not agree with the fact that your material is placed on this site, please, email us, we will within 1-2 business days delete him.