Industrial policy Why?
How?
Examples: EU Industrial Policy and
Swedish Industrial Policy
Sources
www.europa.eu.int/pol/index-en.htm
www.naring.regeringen.se/inenglish
www.isa.se
Industrial policy Why?
How?
Examples: EU Industrial Policy and
Swedish Industrial Policy
Sources
www.europa.eu.int/pol/index-en.htm
www.naring.regeringen.se/inenglish
www.isa.se
Why now?
GATT and regional integration mean that trade policy instruments cannot be used to promote domestic industry
Changes in the international monetary system limit the scope for active foreign exchange policy
Industry localization more variable than ever before
When market outcomes are not satisfactory, industrial policy is what remains
What is industrial policy?
Broad definition
- targetted taxes and subsidies
- competition policy
- R&D and innovation policy
- education
- infrastructure
- and much else
European industrial policy
Challenges
tougher international competition: USA/Japan and Eastern Europe/Asia providing double squeeze
new technologies and faster technical progress
lingering unemployment
need for structural change
fragmented infrastructure in the Single Market
inappropriate institutional infrastructure: innovations, patents, entrepreneurship
European industrial policy
General objectives
strengthening of the competitiveness of Community industry
generating new jobs
Specifically
retain technological leadership
achive economies of scale, technical efficiency, and competitive business climate
European industrial policy
Framework
industrial policy decision to be taken at the national and regional level
common competition policy
coordination and horizontal measures in areas such as R&D, vocational training, social policy, networks, and foreign trade
European industrial policy
Priorities
to promote intangible investment
to develop industrial cooperation
to ensure fair competition
to modernize public authorities
European industrial policy
To promote intangible investment
tax incentives for training and learning
research collaboration schemes
harmonization and standards for new technologies
protection of intellectual and industrial property
provision of accurate economic data
European industrial policy
To develop industrial cooperation
remove legal and fiscal obstacles
facilitate international information flows
reinforce favorable investment climate in partner countries (including investment guarantees)
support Eastern European industrial development
regional programs in Asia and Latin America
European industrial policy
To ensure fair competition
Externally
promote strengthening of GATT framework
establish international competition policy
develop preferential relations with trade partners
Internally
common competition policy
reduce public subsidies
reduce physical investment bias in state aid
strengthen internal market infrastructure
European industrial policy
To modernize public authorities
deregulation and administrative simplification
continued harmonization of national legislation
increased support for the establishment of industrial networks and clusters
promote diffusion of information and new technologies
establish trans-European networks for data interchange
Swedish industrial policy
Activities in several overlapping fields
openness and deregulation
corporate governance, state ownership, and SMEs
education, training, and R&D
foreign direct investment
regional development
tourism, environment, social security
Swedish industrial policy
Openness
reduce EU protection levels
Deregulation
horizontal programs to replace firm and sector-specific intervention in manufacturing
deregulation of energy market
simplification of regulatory framework for business
Swedish industrial policy
Corporate governance and state ownership
review of institutional ownership
privatization
Small business sector
provision of venture capital
review of tax rules for small business
access to information and marketing facilities
upgrading of skills and competence
Swedish industrial policy
Innovation policy
emphasis on measures to facilitate technology diffusion
special IT programs
participation in EU programs
Education and training
higher output of science and technology graduates
appropriate incentives for investment in human capital and continuous upgrading of skills
Swedish industrial policy
Foreign direct investment
investment promotion (Invest in Sweden Agency)
Regional development
approx. SEK 13 billion in EU funds for remote and sparsely populated areas 1995-1999
infrastructure and IT
Swedish industrial policy
Tourism promotion
Environmental protection
green policies in legislation and public procurement
market opportunity for private sector?
Social security
strengthen work incentives
Baltic Sea region
Sweden as a bridge to the Baltic region?
promotion of regional cooperation and investment
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