History of Industrial Policy in Europe
Report Review
1- What were the main motivations of EU countries to pursue an industrial policy after the Second World War?
After the Second War there were two time periods to be held which were post 50s and 80s. At the first time period; main motivation of EU countries can be expressed as narrowing the tech-gap between the USA, creating specific industry leaders in Europe, keeping up with competition and implementing non-selective policies for what matters being competitive. In this period, European countries were still maintaining their privileges obtained from the colonial period and exploited goods-based industrialization. So, the UK was the pioneer of the competition of industries in many cases; France and others were following. It might be also mentioned that the Marshall Plan played a key role in European experience of industrialization. Other than this, change in political philosophy leads to an essential structure of EU economic development. Since America insisted on liberalism and free-market resulted in a warm business climate and economic attention regarding new technologies and industries; EU politics fluctuated among ordo-liberalism, social-democratism and imperialism. Based on political echols European after war economic and industrial politics have been determined.
After the 80s, increasing business climate and developing the venture capitals for younger companies as USA did and succeeded, establishing the economic integration of European countries, developing new policies regarding late-comers and China rather than a non-selective sort of policies. Since industrial policy is closely linked to tech-policy; European countries became the pioneer in certain sectors to invest and develop the tech-polich rather than scattering its energy and resources on each sector. So, most of them became superior at one industry and kept the others at the level of European standards in tribute to integrated markets and sustainable economic development. This is what makes difference between USA and EU countries where America was completely opened for the new industries and businesses resulting in technological development in many sectors at the same time -although it’s risky-; EU was more confidently laying on specific sectors and avoiding risk (sector-based modernisation). This made Europe attractive; especially when high wages for certain industries were determined. After the 80s, Europe in general but Germany and France in particular were affected by the new immigration waves.
2- What kind of sectors have been particularly chosen by the countries? Why?
UK: Earlier; gas, coal, electricity, railway, aircraft, later; aerospace, airframe. Tribute the superiority of the UK from the colonial periods; making initiative attemptions regarding technology was easier in the UK. Then when the importance of technology was understood; institutional changes and political developments led the UK to become a competitor in several high-tech industries.
France: Earlier; due to underinvestment, the electricity, gas, steel and coal industry animated; later; nuclear power, aviation, aerospace, car industry. After the war in France most of the industries were supported by the government to develop. France also selected some industries to develop and be competitive to sustain a less-risky economic growth.
Germany: Earlier; coal, steel, railway, telephone, later; car, train, machinery, heavy-metal, aircraft, .Germany inherited many sectors as government supported than privatized wholly or partially all of them where the required level of competition may be achieved. Thanks to a more open liberal system in Germany; it set the frontier in Europe of growing high-tech industries.
3- Please choose one country and list the success and failures of the respective country in terms of the industrial policy it implemented.
Germany is one of the most successful industrialized countries in Europe, but how did it came to this stage? After second war, Germany like other countries took fair-share of damage. Also it inherited a dominant political system after Nazi regime that prevents liberalism and development needed. Tribute to couple of institutional and political changes Germany became the most liberal economy of Europe and as all others did specialized in some certain industries. Germany was advantageous in terms of steel production and many raw materials that may lead other high-tech industries. Technical and high-skilled worker were two main reasons behind its achievement. Car and motor industry almost jumped after 80s and structured the main shape of the German economy. Also the banking system was closely linked to this business atmosphere to sustain and expand; resulting from this collaboration and cooperation Germany catched a level that cannot be achieved easily in Europe. Financial tools were designed for investors and serve the big industries. Investment in long-high-skill education and high wages were other attractive marks of German industrial achievement. But after especially the oil-crises and suffering of less-developed countries Germany got its fair-share of effect by immigration waves. At the beginning of waves it was beneficial to have more less-skilled workers in fabrics but especially after 2000 Germany brought many terms to be accepted to Germany as a worker. Although it caused a dramatic scene at the middle of the twenty first century Germany took highly-skilled and educated immigrants to sustain its economic growth.
4- Please read carefully the conclusion part of the paper and summarize it in three sentences.
When the three main phases of industrialization were considered; European countries more or less performed similar against to US and selected the specialization in some particular industries. European countries shaped its financial market and banking system to serve investors and strengthen the biggest industries which were determined by the colonial past of the countries and superiorities from past over some certain raw-materials like steel and coal. At th third pace of industrialization; Europe achieved a shared-level of high technology and industrial production but less liberal than USA where famous for it’s startup and business climate although it was enough for Europe to guarantee it’s sustainability of economic growth.
