Industrial and Regional Policies in an Enlarging Eu by David Bailey & Lisa de Propris

Author:David Bailey & Lisa de Propris [Bailey, David & Propris, Lisa de]
Language: eng
Format: epub
Tags: Political Science, Public Affairs & Administration, Public Policy, Regional Planning
ISBN: 9780415498227
Google: _2YnAQAAMAAJ
Goodreads: 7219087
Publisher: Routledge
Published: 2009-01-15T10:09:46+00:00

FIGURE 1

Elements of industrial policy in the European Union

Source: Pelksman (2006)

The concept and mantra of competitiveness still dogs much of the policy debates around the economic development of EU as expressed in the Lisbon Agenda. In addition, recent contributions on competitiveness are still characterised by disagreement over conception and context. In a large part, discussion of this elusive concept is still overshadowed by the work of Porter who conflates two types of competitiveness into one category (Budd & Hirmis, 2004). There have been subsequent attempts to clarify the elusive beast by focusing on industrial competitiveness within an EU context (Bailey et al., 2006; Grilo & Koopman, 2006; Kohler, 2006). The utility of these interventions notwithstanding, the pursuit of an elusive concept that is frequently misunderstood by policy makers can create perverse outcomes for policy. As Pelksman (2006), p. 140) wryly observes, competitiveness almost becomes a cure for all economic ills:

Competitiveness is now so widely defined that it serves as a ‘container, in which almost any idea can be dumped. Not only are ill-defined policies rarely good policies, the nebulous approach acts as an open invitation for (industrial) lobbies and national ministers to argue attention to almost anything, resulting in waves of ‘fashionable’ topics.

Pelksman goes on to describe how industrial policy at the symbolic level went out of fashion in the mid-1990s to be replaced by competitiveness policy. The crucial issue about EU industrial policy in respect of Lisbon is spelt out by Bailey and Cowling (2006, p. 27):

Overall, there has been quite extensive public policy intervention in the United States, but this is often opaque and hidden. This industrial policy has involved both vertical measures in targeting new technologies and emerging industries, and horizontal measures to support all industries, suggesting that the current focus in Britain and the EU with the horizontal aspects of industrial policy has been largely misplaced. This may have relevance in the European context, given the desire to re-activate the EU’s ‘Lisbon agenda’.

Their comment is pertinent in assessing the role of industrial policy in balancing economic governance in the EU. Perhaps the most overlooked aspect in discussions of industrial policy is policy which directly bears on industry. In Pelksman’s original paper the figure above included policies that affect industry under the rubric of ‘buffering industry’. This rubric includes monetary and fiscal policy, wage setting and industrial relations, among others, and non-industrial policy measures ‘directly affecting industry’. The original horizontal and framework nature of post-Lisbon EU industrial policy would appear to be consistent with achieving the aims of Lisbon. How this type of policy plays out in different regions and sectors is almost entirely determined by policies that affect industry however. The new ‘matrix’ approach may go some way to resolving this tension. Pelksman (2006) identifies three cross-cutting issues expressed in the following questions:

• Does EU industrial policy amount to ‘competitiveness’ policies?

• Do services matter for industry?

• What can Europe do about infrastructure and how critical is that for industrial policy?

He could have added to these questions the cross-cutting role of cohesion policy and exploring them within a regional framework.

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