The Rise of 'European Champions' in the Single Market

Abstract This paper shows that there are sound economic arguments for developing a modern industrial policy at the EU level. The rationale lies in the need to facilitate economic restructuring through strategic behaviour whenever market forces fail to do so themselves, and also in order to encourage innovation and the creation of a knowledge economy in Europe. We further argued that this approach does not entail a return to the old policy of “picking the winners”, requiring instead the strengthening of the “Technology” side of the EU’s industrial policy “Triangle”, without weakening its “Competition” and “Commercial” policy sides. The paper also tried to show how, during the last few years, the European Commission has indeed taken a number of steps in the right direction, focusing particularly on the promotion of research, innovation and excellent human capital in Europe. Finally, we argued that “European Champions” (EC) could be a suitable means of promoting this modern European industrial policy, on condition that value is genuinely added by supranational public and private cooperation in research and innovation, and that the logic of the Single Market is respected. We believe that when these conditions hold, at least two types of “European Champions” can emerge. The paper concludes providing a basic taxonomy (“Type I”, “Type II”). JEL CLASSIFICATION: L 10, L50, L52 KEYWORDS: Industrial Policy, European Integration, Single Market