How to think about the reconquest of our industrial and technological independence?
Joachim Imad is director of the Res Publica Foundation. The symposium on reindustrialization can be found on their website.
FIGAROVOX. - Jean-Pierre Chevènement evokes, during the conference of the Res Publica Foundation, a "historical depth of the French industrial stall". How old was France's industrial weakness?
JOACHIM IMAD. - France has a much later industrial tradition than other European countries. As Louis Gallois observes in the publication, “the grand salon, in France, is the agricultural salon; in Germany it's the Hanover fair, the largest industrial technology fair in the world”. Where Germany very early on built an industrial economy and invested in its national production, France has remained a rentier economy. It is for this reason, combined with demographics, that it stalled after 1870, even though it was the world's second industrial power in the middle of the 19th century. This relative delay did not prevent a few industrial rebounds until the Glorious Thirties, a period of apotheosis for our industry thanks to the proactive policies of De Gaulle and Pompidou.
If we must not therefore idealize the industrial past of France, we must recognize that it has undergone for forty years a violent deindustrialization. The share of manufacturing industry in its GDP fell from 21% in 1990 to 10% in 2019. Only Greece is doing worse in the EU. Since the end of the Glorious Thirties, France has also lost half of its industrial jobs, at a rate of -1.5% jobs each year (nearly 2 million jobs in total). Major industrial groups have withered or been sold abroad: Alcatel, Alstom Power, Mittal, Pechiney, Lafarge, Technip, etc.
The consequences of this deindustrialization movement have been dramatic. This has indeed generated endemic mass unemployment which has increased the cost of our social protection. The fractures between the territories have been considerably accentuated, to the benefit of the metropolises which benefit from globalization and capture the essential of the living forces of the country. Due to deindustrialisation, our trade balance has also become structurally in deficit: a deficit of 81 billion euros in 2020, while France remained in surplus at the beginning of the 2000s. French research has also suffered greatly from these developments. Nearly 85% of R&D is carried out by industry, hence our downgrading in this area (see the November 2020 symposium, “Research Policy, a challenge for the future”).
Your publication insists on the need to combine political will and the will of French industrialists to create a dynamic ecosystem. Is it a whole system that needs to be reviewed?
With deindustrialization, the notion of productive apparatus has disappeared from our imaginations. The coronavirus crisis has sounded like a wake-up call. This has indeed revealed the extent of the dependencies created by forty years of abdication of political will. The French understood that the problem went far beyond medicinal substances, masks, respiratory assistance machines or our inability to produce a national vaccine. More than ever, they make the link between the productive tool and national independence. A recent study by IFOP-No Com reveals that 41% of them consider the relocation of factories to France to be a priority.
The evolution of the discourse of the political class is just as striking. The entire political spectrum, starting with Emmanuel Macron himself, was brutally convinced that it was necessary to reindustrialize France. This change in discourse is going in the right direction. However, it cannot be enough if it is not followed by strong actions. It is indeed an entire ecosystem that needs to be reviewed. This necessary paradigm shift involves breaking with certain dogmas, starting with the choice made in the 1980s and 90s to specialize our economy in finance and services, to the detriment of production. It is also important to rearm ourselves in the face of increasingly violent international competition. The EU would, for example, have every interest in reconnecting with Community preference. As François Lenglet states in our publication, in reference to European failures on solar panels and batteries for electric vehicles, “choosing a sector, investing in it, without protecting it by specific measures at national or European borders amounts to emptying the sea with a spoon”. Without protective measures at its borders, Europe will not be able to reinternalize the decisive value chains of the 21st century, which can only aggravate its decline to the benefit of Asia.
How to Download Any Video From A Website For Free WithInternet Download Manager – How to Download Any Video From… https://t.co/Z9Y5SR4ttv
— Dinith Ranasinghe Sun Jan 24 15:17:06 +0000 2021
The time has also come to rethink the rules on state aid, debt and merger control. The current European treaties, ratified at a time dominated by neoliberalism, have had their day and no longer protect us against the turbulence to come. The functioning of the single market must be thoroughly reviewed. Through agglomeration effects, this creates a polarization of employment and industrial activity largely favorable to German interests and exports (trade balance surplus of 180 billion in 2020). This Euro-divergence jeopardizes the stability of the Old Continent.
You advocate the creation of an independent Ministry of Industry, on which energy policy will depend. How should the state put itself in battle order?
Louis Gallois indeed points out that only two countries in Europe, Sweden and France, maintain a Ministry of the Environment in charge of energy. According to him, energy should be brought back to a new Ministry of Industry concentrating the major technological research organizations: CEA, INRIA, CNES, but also the Future Investment Programs (PIA). Such a reform would root the will to rebuild our productive apparatus in the very structures of the State. Louis Gallois also proposes that in parallel with this new Ministry of Industry, each ministry acquires an equipment body, on the model of the General Directorate of Armaments (DGA) for the Armed Forces. He mentions in particular Agriculture, Housing and Health, whose public procurement policy “is not the subject of any reflection in industrial terms”. He also mentions the need to form a real sovereign fund for capital intervention by bringing together the State Participation Agency (APE) and the BPI (Public Investment Bank).
Our publication also offers a reflection on the virtues of planning. Continuity being a key to success in industrial matters, the State's effort must be planned in a coherent manner over time. Countries like South Korea or the United States (see the work of economist Mariana Mazzucato) have understood this well. The recent creation of a High Commission for Planning is a step in the right direction, but we need to go further. Our publication suggests setting up a permanent committee on the reindustrialization of the country in Parliament. This could for example define priorities over 5-10 years. Programming laws (energy, research, vocational training, etc.) would then guarantee that the public means are put on the table in order to achieve these objectives. This ability to plan must go hand in hand with greater state agility. As Nicolas Dufourcq reminded us, it is imperative to speed up the decision in industrial matters. Our current slowness is costing us in an international context that values velocity. The creation of a large Ministry of Industry would no doubt be welcome from the point of view of this objective.
What about the mobilization of manufacturers?
All initiatives aimed at mobilizing industrialists are worth taking and must be encouraged from above, without opposing signals and without procrastination. The work done by the CNI and the BPI is going in the right direction. The same goes for the reduction in production taxes, provided that this is accompanied by compensation. In our publication, Nicolas Dufourcq and Alexandre Saubot rightly note that an industrial ecosystem is built over time via limited but massive industrial bets. France cannot do without the work of supporting the fifteen thousand bosses of industrial companies. Without a relationship of trust between the State and industrialists who know the field, there will be no industrial renaissance for our country.
On July 12, the President of the Republic announced an investment plan for the “France of 2030”. What are the sectors of the future to succeed in this reconquest?
Tomorrow's industry will be more technological and greener than in the past. It is an illusion to think that France will relocate industry from 20 years ago. On the contrary, it must be visionary and position itself on the subjects of tomorrow. These breakthrough innovations are already well identified by the public authorities: quantum computers, batteries, semiconductors, hydrogen cars, biotechnologies, data management, etc. The digital revolution is reshuffling the cards and can be a chance for France if it quickly gets up to speed in this area. More broadly, it must focus on the top of the range, the only way to escape the grip of costs. This innovation imperative must encourage the State to focus on research. The public effort in this area is relatively strong, but our private research deserves to be further developed. We must hear the recent call from the boss of the CEA to decompartmentalize research.
In addition to innovating, France must finally give itself the means to maintain what already exists, as our publication reminds us. Our country has, for example, exceptional assets in nuclear power but does not make the investments necessary for its renewal, even though many of our power stations will soon reach the end of their life at the same time with a "cliff edge effect". There is also reason to worry about the refusal of several European countries, Germany in the lead, to include nuclear energy in the European taxonomy. Another sector with a future that must be the subject of massive investments in order to be maintained is that of armaments. France wants to renew its national capacities on the basis of European cooperation, with the idea that this will open up new markets and make it possible to reduce production costs. In reality, it is often a sell-off of its technological advantages in this area, as recently shown by the tensions around the Air Combat System of the future or the Franco-German MAWS program (maritime patrol aircraft). Rather than pursue cooperation that does not conform to French interests, often for ideological reasons linked to the Europeanism of the elites, more public procurement should be used and the BITD strengthened. For a more in-depth view of these issues, I refer you to our publication.
