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Adrian Harris is director general of Orgalime – the European Engineering Industries Association.
It was not all that long ago that industrial policy seemed to be out of fashion. It was viewed as a throwback to times past, a byword for misplaced government interventionism seeking to steer the market and ‘pick winners’. More often than not, it was equated with attempts to turn back the clock: the use of state subsidies to prop up failing industries was a way to temper technological change and shelter national ‘champions’ from global competitors.
Fast forward to today, however, and there is an increasing awareness that effective support for industry does not mean preserving the structures of the past. Rather, industrial policy should become an enabler for the future and a driver of change. In contrast to the interventionism of days gone by, a forward-looking industrial strategy should focus on creating a framework that encourages enterprises to remain at the leading edge of industrial innovation. And far from insulating European firms from international competition, a modern strategy should equip them with the foundation they need to survive and thrive on the global marketplace.
The EU Competitiveness Council has recognised this need for a comprehensive industrial strategy at European level: in its Conclusions from 29 May, it “calls on the Commission to provide a holistic EU industrial policy strategy for the future in time for the European Council meeting in spring 2018”. And the recent #Industry4Europe campaign shows the broad support for this move across the manufacturing sector.
But why now? First of all, it took a while but it seems policymakers have accepted the simple fact that manufacturing is – and will remain – central to Europe’s economic prosperity. The engineering industry alone directly employs about 11 million people and accounts for an annual turnover of almost €2,000 billion. In the years since the 2008 financial crisis, the countries with a strong manufacturing base were the first to bounce back.