We need “an industrial policy equipped with one European coordination structure, what more research resources and offer spending at least triple in technical schools and professional". These are the ingredients for relaunching businesses and giving young people the right tools to become entrepreneurs now that the spontaneous budding of businesses is unthinkable given the complexity of technology. This is how former Prime Minister Romano Prodi opened the proceedings at the East Forum 2012, the day of debates organized by Unicredit and the OECD and which this year is dedicated to industrial policy. “The company is privately owned but it is a public good” for this reason those that grow and are sustainable in the long term should be encouraged. “Disasters are often observed in first generation family businesses: we have lost excellent businesses due to quarrels between brothers-in-law”. And it is no longer possible to continue on this path.
The ex-premier explained that the problem of Europe's lack of competitiveness today you have to fight with a pmore homogeneous and targeted industrial politics. Asian countries, especially China, are no longer a place of relocation due to low labor costs, now almost similar to Western levels, but it is the "supply chain and the integration of the production structure that offer these countries the competitive advantage" . This is what Europe lacks: “We have to create a supply chain and rediscover homogeneity in the production structure. We have lost the sense that businesses and surroundings should live together. The aptitude for a dynamic analysis of what the company or sector will be in the future is lacking. This type of study is only carried out by financial companies and as a function of the business, certainly not for organic industrial development". And Prodi has not painted a too positive image of the financial world. "The dimension of speculative finance has become so great that all countries have lost their sovereignty," said the former prime minister. The United States and China are saved, all the others choose their policies because they are terrified of the spread.
Also discussing with Prodi is the professor of the London School of Economics (LSE) Robert Wade and the Spanish Xavier Vives who teaches at the Iese in Barcelona. The British academic recalled that the European financial crisis has challenged neoclassical theories which, by refusing any intervention by the State, they see industrial policy as a necessary failure. But the difference is more subtle: need flee those industrial policies which consist merely of military policies and the creation of national champions e focus on the development of a general framework of governance, interventions on human capital, infrastructure and education in primis, and on some strategic sectors.
During the morning, China was called into question as an example of an organic and efficient industrial policy. However Prodi prefers to look to neighboring Germany: there is a Fraunhofer institute which grants 2 million euros each year for innovative projects. It is the State that provides credit to companies, which adequately manages patents and facilitates relations between companies and banks. This is the kind of industrial policy to inspire. However, faced with such a competitive global world, “not even Germany alone can do it“, said the ex-premier. “And indeed the German Confindustria is much more cautious than the Bundesbank” in its anti-euro outbursts. “In Germany they are wondering if they will be able to create a cluster on their own that makes them protagonists of the world” but the Bolognese professor seems quite skeptical of the idea.
Finally, the former prime minister urged his fellow economists to get their hands dirty in the real world. “In recent years, a discrepancy between theory and reality has increasingly been observed: at the academic level, applied study has been abandoned because a dominant theory has claimed to demonstrate that industrial policies are always wrong”. This trend must be reversed.
