The Single Market and the development of "Europeans champions"

Abstract

This paper analyses the potential of the EU’s «New Industrial Policy», suggesting that the European growth problem calls for a concentrated supra-national effort to promote the development of «European Champions», particularly addressing the current technological shortfalls of the Union. Spurred by the challenges of the global economy – the American leadership and the rise of the Asian Tigers – and its own Eastern Enlargement, the beginning of the twentyfirst century saw an end to the «suspension» of the EU Industrial Policy characteristic of the 1990s. The EU’s sluggish productivity growth of the recent years and her distance from the new frontiers of technological innovation calls for a «rediscovery» of Alexis Jacquemin’s 1987 insight. Given that leaving everything in the hands of the market will not necessarily lead to appropriate industrial reconfigurations – as required by changing global economic conditions – there is a need to formulate «[...] a concerted European industrial policy that will help overcome industry strategies along national lines». In other words, in this new economic setting, Member States should transcend their economic nationalism and concentrate on developing truly «European Champions», particularly in sectors where there is more intense R&D effort and where economies of scale and scope are important (we should label these of “Type I”). In order to do so, the EU must aim to particularly address its relatively low investment rate in knowledge and innovation, that is, to bring about a definite reinforcement of the third side of the European Industrial Policy «triangle» – Technology Policy, without weakening the other two – Competition Policy and Commercial Policy – that have already made significant headways during the 1990s. Going towards a basic taxonomy, a second type of European Champions emerges in the Single Market, mainly as the result of the current mergers-and-acquisitions (M&As) wave.