Industrial and technological sovereignty: does Europe have the right method?

By Philbert Carbone.
Article from IREF France

It was under this attractive title that an evening debate was held on January 10, 2023, at the initiative of La Fabrique de l’industrie. brain center Metallurgical Industry and Trade Union (UIMM).

To begin with, let’s dwell on the word “sovereignty”, which really needs to be defined. Pierre-André de Chalendar, co-president of La Fabrique de l’industrie and also president of the Saint-Gobain group, recalled that sovereignty does not mean independence or autarky. As a note of sovereignty brain center“consists of not being dependent on the benevolence of others to meet certain needs, and being able to act independently of the will of another state or company.”

This word has appeared in the news recently after the covid pandemic and the war in Ukraine. It was during these crises – not yet over – that many French people realized that we were dangerously dependent on foreign countries for many products, especially for the deindustrialization of our country.

European politics contribute to the loss of sovereignty

That evening, Astrid Cousin, representative of the European Commission, assured the audience that the institution’s policy is to build the internal market – which is quietly celebrating its 30th anniversary.^e 1st birthday^er January – “strong and durable”. Ms. Cousin then detailed the arsenal deployed by the Competition Authority, to which she is attached: revising the rules to promote environmental and digital transitions; fight against abuse of dominant position; control of third country subsidies, etc. He also highlighted billions of euros in aid to irrigate the continent: a program to finance innovation; chips are functioning overcome the shortage of semiconductors; grants in responseIRA (inflation reduction act) announced by Joe Biden; and so on

Ms. Cousin really didn’t convince the room or the other speakers. These – from the CGT’s Marie-Claire Cailletaud to the co-chairs of La Fabrique de l’industrie, Pierre-Andre de Chalendar and Louis Gallois – did their best to remind the European Commission how much power it can put on wheels. of companies.

For example, we can cite the example of energy policy that stops investments, causes prices to explode and increases dependence on foreign countries. Or wonders the “green taxonomy” that excludes why hydrogen is produced from atomic energy. And when the European Union does react, it is small and delayed, as several speakers pointed out. He wants to encourage its construction gigafactories despite the number of electric batteries, he forgets that the machines that produce these batteries all come from Asia and the ones that come to us are not the latest generation! No matter what people say in this field, Europe will remain behind the world leaders for a long time. As in voltaics, where 8 of the top 10 global manufacturers are Asian. What can we say in the digital sphere if, as Louis Gallois, the former chief investment commissioner, Europe is not a “colony of the United States”?

But what about the anti-concentration policy that prevents the birth of European champions under the false concept of competition? For example, wasn’t it Brussels that banned the Alstom-Siemens merger?

French politics add to the problem

However, it would be wrong to put all the difficulties of French industry behind Europe. French politicians also have a responsibility.

as stated in an article by Gallery a few months ago “La France [est le] It is the only country with an abysmal trade deficit with its EU partners.

Globally, we had the worst trade deficit in our history in 2021 (€109.7 billion), with Germany having a surplus of €178.4 billion, the Netherlands €66.1 billion, Italy €44.2 billion, and Belgium €29.6 billion. Therefore, the obstacle here is not the EU.

Another example, given by OFCE’s Sarah Guillou: in recent years, France has invested more public money in artificial intelligence than Germany and the UK, but has filed fewer patents than those countries. The EU is not to blame here either.

It is undeniable that France is killing its industry, more broadly its companies and jobs, by being a champion of tax pressure and ever-increasing European regulations. Every day, by expanding its deficits, increasing its debt burden, it burdens its future.

What solutions?

There are many solutions to this impasse and IRIF has already proposed many of them.

What is certain is that they are not about increasing public investment, as demanded by Louis Galois, a former civil servant like his friend Pierre-Andre de Chalendard, prominent representatives of this “crony capitalism”. problems.

Indeed, we are convinced that public money (eg through the BPI) only leads to bad investment. As noted by Olivier Coste, an entrepreneur at Matignon and former advisor to Lionel Jospin, private investment in research and development in so-called “technological” is five times less in Europe (40 billion in 2020) than in the United States (200 billion). If the United States is putting so much private money into “technology”, it’s because they have world leaders (the famous Ghafam, much hated here) who can invest.

If these Ghafams were born in the United States, it is no accident. As Olivier Coste tries to clarify this to a somewhat skeptical audience, this is especially because “companies hire quickly, even if they need to fire quickly.” He added that companies in Europe don’t dare to hire in risky projects, so they don’t start.

It is true that in the United States, “hundreds or thousands of job cuts can be achieved in a few weeks. The total cost to the company is weekly wages, about $20,000 per person for qualified “tech” people. In a large company in France, such an operation can last a year and costs 200,000 euros per person. It’s worse in Germany, says Olivier Coste: 18 months and €250,000 per person.

However, “tech” markets change at both an upward and downward pace. Therefore, companies must be able to adapt their workforce quickly. They can do it in the US, but also in India or China, and not in Europe, where restructuring costs are prohibitively high. The decision to invest in ‘technology’, which is inherently risky (success rate around 20%), is not reasonable in Europe due to restructuring costs.

Consequently, Europe, and especially France, will never produce “technological” champions as long as the delays and costs of restructuring are too high.

Hearing the socialist prime minister’s former adviser confirm that the labor law needs to be tackled was not the most interesting part of tonight’s debate.

—

On the Internet