ABSTRACT
The Covid-19 pandemic and Brexit have focused attention on the resilience of key sectors and firms. This paper explores the financial resilience of the 50 largest automotive firms in the West Midlands region of the UK in their response to disruption and economic shocks. The findings demonstrate that 22 firms are at high risk due to poor current liquidity ratios, with Coventry and Birmingham emerging as locations most susceptible to firm closures. High-risk firms include key flagship original equipment manufacturers operating at the downstream end of supply chains. If these firms were to fail, there would be a significant destructive impact on both the industry and the local economy. We assert an effective subnational industrial policy is required in order to support economic resilience in regions such as the West Midlands where a few firms account for a disproportionate share of employment and value-added.
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In this paper, we examine the challenges and opportunities facing the UK's industrial and regional policy in the context of the policy decisions made over recent decades. We argue that the overly centralized and sectoral logic of the UK governance systems has led to a lack of clarity in thinking through place-based issues. This, in turn, has resulted in policy ambiguity, confusion and contradictions, and successfully moving industrial policy and regional policy forward post-Brexit can only take place if conceptual and operational clarity is brought to these matters.
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This article draws upon novel survey evidence to examine the possible regional impacts of Brexit as a ‘disruptive process' to manufacturing operations and logistics in the automotive industry, in the context of the regional resilience literature. The current Brexit (and Covid-19) context, along with the sector's need to re-orientate towards electrification, provides renewed urgency to reconsider industrial policy in spatial terms. The findings have salience not only in the context of anticipating and reacting to Brexit-induced economic shocks at a regional level, but also over the role of decentralized regional bodies. In this regard, the UK government's agenda of ‘levelling up' will be challenging, especially in the context of the place-based shocks likely to arise from Brexit as well as the impact of Covid-19. The article concludes that a more place-based regional industrial policy is required both to anticipate and to respond to shocks and also to reposition the sector in the region going forward.
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The paper examines how Brexit has impacted on Original Equipment Manufacturers (OEMs) and suppliers in the UK Midlands, and to what extent such firms are reconfiguring their supply chains with the increase in trade barriers with Brexit. To do this, the paper aims to add to macro studies in the area by using a mixed-methods approach that combines descriptive quantitative analysis of secondary data with a complementary qualitative research analysis based on a novel interview dataset. The latter is generated from 14 semi-structured interviews conducted in late 2021 with senior managers and directors in advanced manufacturing firms across the East and West Midlands regions of the UK. A key finding of this paper is that the imposition of new non-tariff barriers through Brexit has proved particularly challenging to smaller firms in manufacturing supply chains. The findings of our research highlight the need for policy support for smaller firms engaging in EU-wide supply chains, particularly around skillsets and access to talent, cost reduction for exports and facilitating trade. © 2023 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.
ABSTRACT
Il Piano Nazionale di Ripresa e Resilienza (PNRR) stanzia oltre 230 miliardi di risorse per la ripartenza dell'economia dopo la crisi del Covid-19. Quest'articolo fornisce un'analisi del PNRR, con un focus sulle sue implicazioni di politica industriale. La sfida della ricostruzione dell'economia italiana richiede una minore frammentazione degli interventi e l'esplicitazione di una traiettoria di sviluppo di medio periodo;tale visione è però assente nell'impostazione e nei contenuti del Piano. Le risorse nazionali ed europee disponibili per affrontare la crisi dovrebbero concentrarsi su obiettivi e settori prioritari, come le tecnologie digitali, le attività economiche sostenibili dal punto di vista ambientale e i servizi di benessere e sanità pubblica. Sono necessari nuovi strumenti politici mirati, che vadano oltre gli incentivi ‘orizzontali' alle imprese;nuove istituzioni pubbliche potrebbero guidare gli sforzi di investimento verso una nuova traiettoria di sviluppo.Alternate abstract:Italy's National Recovery and Resilience Plan provides over 230 billion euros for rescuing the economy after the covid-19 crisis. This article provides an analysis of the Plan, with a focus on its industrial policy implications. The challenge of rebuilding the Italian economy would require less fragmentation of the measures and a medium-term development strategy, but such a vision is missing from the approach and content of the Plan. National and European resources available for addressing the crisis should focus on key priority fields, including digital technologies, environmentally sustainable economic activities, and welfare and public health services. New targeted policy tools are required, moving beyond ‘horizontal' incentives to firms, and new public institutions could guide investment efforts towards a new development trajectory.
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This article discusses China's industrial and labour policy for the automotive industry facing the transition to the era of new energy vehicles. A conceptual framework on the regimes of production is employed to analyse the present transformation of industry structures in production models and labour markets. The growth of private-capitalist regimes of high-performance, low wages, and high profit incentives for workers is identified, which can be described as the 'Foxconnisation' of the industry, and it is at the expense of the corporate-bureaucratic regimes prevalent among the leading Sino-foreign joint ventures. As production networks become vertically disintegrated, some non-traditional industrial players are highlighted in the discussion of some recent developments in the industry during the ongoing COVID-19 pandemic. The profound transformation in the regimes of production brought about social contradictions related to the production process, and new challenges and implications for workplace policies. The empirical study of this article confirms the necessity of trade union strategies inside China from an international perspective in order to ensure social standards and a more sustainable green transformation of the industry.
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As the U.S. economy rebounds from the COVID-19 pandemic, strategies that promote long-term transformation toward quality jobs will be critical. This includes workplace-improving interventions that enable employers to upgrade existing jobs, often while enhancing their own competitive position. This article focuses on the U.S. Manufacturing Extension Partnership (MEP), a national network of federally funded centers that support small- and medium-sized manufacturing firms. The authors document the range of workforce- and workplace-enhancing strategies that MEP centers have adopted since the network's inception in the mid-1990s. While workforce development is unevenly implemented across today's MEP network, leading centers within it are devising transformative strategies that shape underlying business practices in ways that can improve the quality of frontline manufacturing jobs. The pandemic recovery, along with federal commitments to reenergize domestic supply chains, presents an opportunity to establish National Institute of Standards and Technology (NIST)-MEP as a national workforce development leader, while also strengthening localized institutional partnerships to center that effort on inclusive economic development and recovery. © The Author(s) 2023.
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This paper explores the COVID-era government stimulus programs for the automotive industry in France and Germany. We assess the design of the sectoral support packages and the related policymaking processes against the background of the discourse about crisis-era state aid as an instrument of economic restructuring. We place the sectoral stimulus programs in the context of changing EU-level regulations and the following three country-level characteristics: the revival of industrial policy thinking among national policymakers;the growing economic pressures in the domestic automotive sectors;and the established structures of government-industry interest intermediation. Our results suggest that in both countries, large and technologically transformative recovery programs were introduced for the automotive sector. However, both support packages had a rather structurally conservative character and were influenced by different pre-existing state-industry dynamics: the corporatist concertation in Germany and post-dirigiste state interventionism in France.
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The impact of anthropogenic greenhouse gas emissions on the increase in the average temperature on the planet and the risk of initiating irreversible processes are recognized by most of the scientific community as real threats to humanity. Many countries have a legal and institutional framework for a consistent industrial policy taking into account the climate and environmental components, including carbon accounting. Russia is a country with high intensity of production-based CO2 emissions. In is well-known that the industry generates necessary hence it induce demand for products from other sectors of the economy. Environmental and social parameters in the formation of industrial policy should not be considered as any limitations for the development of industry. Despite a serious change in the agenda for the industrial policy in recent years, caused by COVID-19 and by current geopolitical situation in the world, it is highly undesirable to lag behind in this area, since it is necessary for international cooperation and human technological development. Low-carbon areas correspond to the modern ideology of industrial policy for many countries. The novelty of the study is the evaluation of the total GHG (greenhouse gases) intensity of Russias industry by means of intersectoral model. The paper analyses some of industrial policy measures and their implementation that affect low-carbon economic development. The proposed study could be of interest for other economies aiming to reduce their carbon footprint. © 2022 International Multidisciplinary Scientific Geoconference. All rights reserved.
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This Article critically analyzes the main legal and policy issues that are likely to determine the development of the EU's trade policy concerning rules on State intervention in the market, specifically on subsidies and SOEs. The article assesses the aforementioned issue especially within the context of the new trade strategy entitled "An Open, Sustainable and Assertive Trade Policy” set out by the European Commission in February 2021, at the core of which stands the concept of strategic autonomy. The focus of our analysis is on key elements of the current EU competition and trade policies and normative initiatives, namely: the relaxation of the usual State aid regime under Articles 107 and 108 TFEU to give Member States more flexibility in supporting their economies and strengthen EU industrial policy;the likelihood of EU proposals resulting in any substantial change to international trade law on subsidies and SOEs at the multilateral (WTO) level;a systemic horizontal investigation into the relevant trade rules promoted by the EU in its most recent practice of PTAs;and, finally, the EU pursuing stronger protection of its companies with its recently announced new regulation on foreign subsidies, on the basis of which the European Commission can investigate foreign subsidies and impose remedies. Even though, at first sight, it may seem that the current evolution of the EU trade policy on these issues seems inconsistent, the Article argues that the unilateral, bilateral, and multilateral approaches are indeed strictly intertwined, and they reveal a significant shift in the most recent EU trade policy objective in relation to the role of State in the market.
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Recent years have seen a proliferation of Special Economic Zones (SEZs) in developed and developing countries. Developed in Europe in its modern shape, most SEZs are located outside the continent today, notably in the developing world, where SEZs form part of these countries' export-oriented growth policy tools and overall economic development. At a period of growing unilateralism and the return of the State as an economic actor, this contribution seeks to tackle the rise of SEZ laws in the global south, with a particular focus on Africa. It will scrutinize the reasons for their establishment, the measures chosen to promote them, and the international ramifications in these respective regions and broadly on the global plane, notably at the WTO. With the entry into force of the African Continental Free Trade Area (AfCFTA) Agreement, African countries face challenges of multi-layered SEZ governance, which this contribution intends to address. These challenges also extend to the cross-regional trade agreements these countries conclude, individually and as a bloc. Since SEZs are often assimilated with a category of subsidies and are discriminatory trade measures, this contribution, in essence, investigates the extent to which current trade rules at multilateral and regional levels address these controversial aspects of SEZs.
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This Article contributes to the discussion about the development of international trade regulation of state interventionism by situating the tensions that exist about the future design of subsidies and state enterprises treaty regulation in the broader context of current systemic challenges to the multilateral trading system. While recent studies have explored the issues of subsidies and state-owned enterprises (SOEs) as one of the most significant in impact among the contemporary challenges to the WTO, there is certainly scope to discuss further such a problem from the broader point of view of the crisis of the multilateral trading system, its systemic challenges and the concomitant increasing politicization of international trade relations. To this end, this Article analyzes the interactions between the lasting decline of the WTO, growing political interferences with international trade flows and the prospects of reforming multilateral trade rules to address its systemic challenges and manage/mitigate newly central problems of the 21st century such as the Covid-19 Pandemic, climate change and the greening of economic production and international trade. The Article argues that existing WTO rules are not adequate to address these challenges and problems. It concludes that, like in the GATT era, it is only the spirit of pragmatism that may provide chances to find alternatives to growing frustration with negotiating inaction and, hence, to reform the system. However, the question remains whether it is possible to find an approach to imagine, remodel and craft multilateral rules that are sensitive to different economic, political, and social choices and able to rebalance the position of all members, large and small, rich and poor.
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Persistent fiscal and political mismanagement, together with the financial pressures of the COVID-19 pandemic, have driven Sri Lanka into a social and economic crisis triggering a decrease in national foreign exchange reserves, an inability to purchase vital imports, and an unprecedented rise in internal inflation rates. Within the correspondingly distressed construction sector, the idea of ‘design circularity' gains natural impetus beyond eco-system protection and responsible consumption views, as a critical strategy for responding to the material and fiscal scarcity of the country's by-now relatively closed economy. This is also in light of the fact that the post-independence history of industrial policy in the island has produced an urban landscape characterised by large underused and increasingly derelict building stock with a significant potential - and need - to be programmatically reorganised, technically recycled, and spatially and culturally re-designed. This paper moves from the proposition that, for ‘circularity' to be of use at the scale required, its design application must expand beyond conventional interpretations of material recycling, to acknowledge the overall building fabric as a critical, transformative resource available to be renewed or reborn, with varying degrees of reforms as called by the existing opportunities, underlying programmatic needs, and/or industrial constraints. In facilitating this function, architectural design has an important role to play, as particular sets of design strategies must be employed to handle the inevitable complexities between structure and form, material and content, and product and process, against a reflective understanding of local building logic, challenges and potential. To that end, professional design can help foster design approaches to resolve the technical intricacies of building fabric transformations, to strategise actions concerning work procurement and economic planning, and to provide the leading agency in setting up future-industry configurations. How this approach could inform and affect broad market notions of design circularity for Sri Lanka is evaluated through the review of three projects that focus on different programmatic transformations (residential-to-residential, residential-to-recreational, and commercial-to-recreational), are set within different geographical locales (city, periphery and in-between), and situated in and around Kandy, Sri Lanka's second largest city. The projects illustrate possible tactics for intervening on the existing fabric whilst considering the benefits of each and articulating the structural challenges for the practices involved. Copyright © 2023 Pathiraja and Tombesi.
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En este artículo se adopta una aproximación evolucionista para comprender el papel de las políticas industriales en el desarrollo de la resiliencia regional a corto y largo plazo. Para ello, se analizan diferentes tipos de instrumentos de política, se categorizan las diferentes aproximaciones basadas en el lugar y sus combinaciones de políticas industriales y se explora su papel para hacer frente a los grandes retos sociales. Para ello, el artículo analiza la región del País Vasco en España, ya que no solo ha implementado una política industrial a largo plazo en durante los últimos cuarenta años, sino que también ha demostrado ser una región resiliente durante las crisis anteriores.Alternate :In this paper, we adopt an evolutionary approach to understand the role of industrial policies in developing regional short -and long-term resilience. We take an in-depth look at the different type of policy instruments to categorise the different place-based approaches and industrial policy mixes and explore their role in addressing grand societal challenges. To do so, the paper examines the Basque Country region in Spain, which not only has implemented a long-term industrial policy over the last 40 years but has also demonstrated to be a resilient region during previous crises.
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With the rapid changes taking place in international manufacturing, there is a need for new theories linking the drivers for manufacturing location decisions to the influence of government. A Delphi study in 2017 of senior industrialists in Europe from capital intensive, complex technology manufacturing sectors provided evidence on the importance of government-specific factors for final location decisions. This was because of the influence of government policies as an exogenous factor on the drivers for international manufacturing, including cost effective, flexible supply chains and the use of the new technologies of Industry 4.0, in an uncertain global political climate. The findings are used to develop a new theoretical framework comprising the decision onion and the government policy matrix for multinational company manufacturing location decisions. This systematic approach to the influence of government will assist in the development of policy in the post-Covid 19 era of transformational change in industrial location strategies.
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This paper suggests that the ongoing Russo-Ukrainian war and existing rivalries among future global leaders, such as the USA vs. China, NATO vs. Russia, and China vs. India, may result in a second Cold War. A new global order and an emerging second Cold War will have many impacts on global, regional, national, and political economies and sectors, as well as commercial and business activities. This paper elaborates on the new (de)globalization, diminishing national and regional economic powers, and environmental challenges. Nations will develop new industrial policies and try to secure global supply chains and material flow. At the same time, it is expected that investment in defense, energy, and food sectors will increase to shore up national and regional security. Tourism and other travel-based sectors, such as sports events, might degrow. These wars might deinternationalize the activities of corporations who would need to develop new business processes, organizational forms, and technological capabilities to protect their existing markets and businesses. Based on these arguments and discussions, the paper calls for studies to examine new research ideas and suggest empirical research to expand our understanding and support the informed decision-making of policymakers and managers.
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Despite longstanding opposition from mainstream economists to industrial policy, in the period of 2020–2021 the United States, confronted by advanced technology competition from China, the demands of climate change, and the need to respond to a global pandemic, adopted a series of major industrial policy programs. Although the U.S. Defense Department has long practiced industrial policy approaches, and the U.S. has followed industrial economic policies in its agriculture, transportation, electric power and healthcare sectors, the new programs focused on promoting technology innovation, so can be labled “industrial innovation policy.” The large scale of these efforts amounted to a new step for the U.S. in non-defense sectors. There is history behind this step. Contrasting Hamiltonian and Jacksonian economic views anticipated this industrial policy debate. While during World War II the U.S. entered into a highly connected set of industrial innovation policies, linking industry, universities and government for technologies like radar, electronics and nuclear energy, it departed from this approach in the immediate postwar. Vannevar Bush, the architect of postwar science organization, backed a linear model, combining federal support for basic research with a supposition that industry would manage the subsequent technology implementation. This position came under fire in the 1980s from critics like Donald Stokes as U.S. manufacturing declined with the rise of Japan’s quality manufacturing model, which was backed by government industrial coordination and support. Gradually, the U.S. began retreating from a basic research-only approach in non-defense areas through a series of policies. These included, in the 1980s a response to Japan’s quality manufacturing model, then starting in the 2000s a response to climate change through a reorganization of energy programs, and then after 2012 in response to China’s manufacturing advances the adoption of advanced manufacturing policies. Although the definition of industrial policy is debated, with some arguing it should serve social needs versus specific technology advances, this study adopts a more straightforward definition. Industrial innovation policy involves governmental intervention in one or more of the post-research innovation stages, from development to prototyping to production, to further technology innovation. The study reviews in detail six major examples of new U.S. industrial innovation policies adopted between 2020 and 2022: Operation Warp Speed for coronavirus pandemic vaccines;the CHIPS Act to restore U.S. semiconductor leadership;the Infrastructure Act of 2021, with its major support for new energy technology development;the Inflation Reduction Act, with its impetus for implementation of new energy technologies;the Biden Administration’s Assuring Domestic Supply Chains initiative, and the Endless Frontier/CHIPS and Science Act, with its support for applied development of critical technologies and regional innovation. All adopt an industrial innovation policy approach. These take different approaches. Operation Warp Speed, for example was more “top down,” with government selecting then supporting a series of companies to develop four different vaccine platforms. Tesla was an example of a “bottom up” approach, with government creating a range of technology incentives which companies – in this case Tesla – could systematically apply to electric vehicle development. However, there remain major gaps in U.S. industrial innovation efforts in scale-up financing, advanced manufacturing support and cross-agency coordination. The scale of China’s extensive industrial financing policies offers a useful comparison to U.S. scale up efforts. Overall, the study reviews in detail the need for the U.S. to adopt a new kind of infrastructure and accompanying operational mechanisms in order to make its new industrial innovation policies work. These include: rebuilding manufacturing foundations;testing and demonstration capability;mapping supply chains technology certification;better integration between industries, universities and government;technology scale up support;application of government procurement;and use of flexible contracting mechanisms.
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The article seeks to identify the government initiatives to mobilise the Brazilian industry during the pandemic crisis. The motivation for the work stems from evidence showing the omissions at the federal level, with relevant implications for the death figures in Brazil. Public policies agenda and a conceptual review was carried out on industrial reconversion in severe emergency conditions, including international experiences in the current scenario. A documental survey was conducted with the federal government and selected state governments. The survey was carried out on the official portals of governments, related agencies and business entities representing the industrial sector. Lack of industry-coordinated mobilisation is given by the combination of intrinsic and extrinsic factors concerning the pandemic crisis, industrial reconversion is another relevant absence at the public agenda. Weak answers of Brazilian government regarding the industrial mobilisation for fighting the pandemic crisis, leading to further hypotheses on the structured agenda of possible effects. The study shows weakness of federal measures coming from the Brazilian government also in the economic front, adding the industrial reconversion absence in the policies agenda as another remarkable feature on the health impacts of COVID-19 pandemics.
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The pandemic has caused the largest drop in the gross domestic product (gdp) per capita in its history in the European Union. The response of the community authorities has been exceptional and a recovery fund of 700 billion euros has been launched. Is this an investment program to recover the growth path before the pandemic or is it also an opportunity to correct the structural inequalities that drag the European Union and the Eurozone and that worsened after the last financial crisis? In this text, we argue that the second objective is the desirable one and that it will only be achieved if resources are directed by a modern industrial policy strategy that allows peripheral countries to improve the technological intensity of their productive structures. (English) [ FROM AUTHOR]