Is a European Recovery Possible Without High-Tech Public Corporations?

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2021-07-03 14:00:08

Intereconomics / Volumes / 2021 / Number 3 / Is a European Recovery Possible Without High-Tech Public Corporations?

Pervasive new technologies associated with information and communication technologies and software are dominated by a restricted oligopoly of US-based corporations. The challengers are no longer European firms, but rather Japanese or Chinese companies. The actions taken by the EU to fill this technology gap, including the Framework Programmes for research and technological development, are beneficial but still insufficient in terms of the resources committed. This article argues that the EU urgently needs to add another economic policy instrument to defy these incumbent firms, namely to create a few publicly supported large corporations in the areas of greater scientific and technological opportunities. This will be complementary to the already ongoing mission-oriented innovation policies. While there are the political and economic difficulties of implementing such a strategy, one recalls the pioneering venture of Airbus, established more than 50 years ago that has successfully managed to challenge the dominant US-based passenger aircraft producers despite several economic and political controversies. Could similar attempts be replicated for green technologies, healthcare services and artificial intelligence?

There is a consensus that Europe will start a solid recovery after the COVID-19 crisis only if supported by remarkable direct government intervention. The existing policy instruments at the national and European levels, and most notably those made available with the Recovery Fund, support and boost economic, technological, social and cultural development.