European Industrial Policy

Abstract

This chapter examines industrial policy implemented in European countries across time, especially after the Second World War and in recent years. It briefly shows that industrialization never occurs without strong supporting industrial policy to provide the enabling conditions for the deep structural changes involved, such as infrastructure and capabilities, especially human capital. Industrialization in the eighteenth and nineteenth centuries is associated with the creation and consolidation of nation states, leading to national perspectives on industrial development and industrial policy, at the expense of regional imbalances. After the Second World War, three phases of industrial policy take place: strong and selective intervention in the first three decades of the period, market-led approaches in the 1980s and 1990s, and a more pragmatic approach at the turn of the century, where deep structural changes require industrial and institutional adjustments. With globalization and the emerging new technological paradigm of Industry 4.0, innovation and skills, as well as the territorial roots of industrial development, seem to be important aspects of industrial policy today. The chapter also argues that the multilevel governance policy framework has to adapt to current disruptions, particularly in Europe.