Industrial Policy: The Changing Agenda

Whilst industrial policy may be considered to include all aspects of governmental policy which affect microeconomic activity, this chapter is using the term specifically in relation to its positive aspects. This is partly because the more negative elements of creating conditions in which the private sector can flourish through the Single European Market (SEM) and competition policy have been covered already in the previous chapter. Whilst the European Union (EU) has generally favoured a free market philosophy, policy increasingly has incorporated elements of more positive intervention to deal with problems of both declining industries and high technology sectors. The changing agenda involves not just reactive but also proactive policies to deal with the pattem of industrial change from older industries towards sunrise industries and services. It is insufficient to rely on the different policies of member states alone and it is recognised increasingly that the EU needs to develop new approaches to deal with greater international competition in both downmarket and upmarket economic sectors.