4.4. Neoliberal Industrial Policy: From vertical policies to horizontal Measures and Structural Reforms (labour market reform, services’ reform, etc) Since the 1970s
We shall look first at what actually happened, and later we will talk about The alternative and possible Keynesian alternative. In the wake of a shrinking Working class, there was an important change in industrial policy since the 1980s. It begun in the late 1970s with Margareth Tatcher and Ronal Reagan in the UK And US.
Then, in 1982 Latinamerican countries were facing the debt crisis, and they Were forced to open their economies and apply neoliberal policies. It was the End of the Third World project (The Third World was not a place, it was a Project!). Export Oriented industrialization was promoted in this countries, and foreign Transnational corporations (TNCs) were free to enter. A new term was coined to Call this policies in 1990: The Washington Consensus.
In the European case, the Single Market was crucial, a project launched in 1986 aiming to achieve a common market for 1993. The socioeconomic content of the project was entirely In accordance with the neoliberal norms (Ryner & Cafruny, 2017: 78). Later, in 2005 the European Commission Re-launched the Lisbon Agenda as the “Growth and Jobs Strategy”.
In Spain, the social democrat party (PSOE) made The transition to the neoliberal industrial policy, a political party heavily Helped by Germany since the mid-1970s (Muñoz, 2012). Besides, in Spain, like in All the world, subnational governments have become very important when it comes To industrial policy. The Basque Country (the Basque Government) has been Especially active in this area, thanks to its competence on rising taxes.
Competition Policy: From vertical Policies to Horizontal Policies
...Nowadays some measures are considered Dangerous: vertical policies. Those measures are sector or firm specific. Money Given to specific sectors of companies is called state-aid, and is under Control by Competition policy because it can damage other companies. The shift From vertical to horizontal policies came in Europe with the Single Market for 1993.
European governments Intervened strongly: 1970-1980.
The... European Coal and Steel Community (ECSC) guided and coordinated the many aids to be given by European governments To these branches with the Davignon Plan.
..Restructuring was very badly done→ Spanish government didn’t defend their manufacturing Industry.
..SEAT the Spanish automaker was privatized and Sold to the German enterprise Volkswagen. After 1986 Spain experimented an Economic growth based on an invasion of European transnationals, which Undermined the independence of the Spanish industry.
→ The rise of Horizontal Policies (clusters and innovation systems)
●On The contrary, horizontal policies are more general and supposed to benefit Plenty of branches and companies. For example, Clusters and Innovation systems are Admitted.
● Michael Porter’s influential work on this Topic is (1990): The Competitive Advantage of Nations.
●They identified a new “network Paradigm” in which the spatial dimension of inter-firm networking was of key Importance.
The EU supports regions applying cluster policies And the like through its Smart Specialization Platform for Industrial Modernization