The Concept of Industrial Policy - Essay Example

? Essay question Determine and critically assess the main challenges in formulating the Industrial Policy of the European Union. Table of Contents I. Introduction ……………………………………………………… 3 II. The scope and limitations of industrial policy in Europe ……. 4 III. The main challenges associated with the formulation of industrial policy in the European Union ………………………. 6 a. Framework aspect …………………………………………. 8 b. Horizontal industrial policy in the EU …………………….. 11 c. Specific and sectoral or vertical industrial policy in the EU …………………………………. 14 IV. Analysing the challenges associated with formulating EU industrial policy ................................................ 17 V. Conclusion and recommendations ……………………………. 19 Endnotes ............................................................................................. 21 References………………………………………………………………… 24 Introduction According to Foreman-Peck and Federico (1999, pp. 2-3), industrial policy is “an elusive concept which aims to cover almost everything that affects the performance of an industry”.1 Considering the importance of European Union (EU) industrial policy in terms of promoting business growth in the industry sector, EU industrial policy was included under the EC Treaty (Title XVI) of the Treaty on European Union (TEU).2 Given that industrial policy can be used in hastening structural changes in industry, this device is often used in influencing the structure of the industry. Prior to the development of industrial policy, the European Commission’s first report in the 1990s revealed that the European Parliament was debating how to formulate a clearly-defined industrial policy which could improve the global competitiveness of the EU members.3 To prevent cases of de-industrialization, the main purpose of creating an industrial policy in the EU was to ensure that there is a common policy framework to be used in promoting fair market competition among the industrial sector.4 In other words, EU industrial policy is not limited to preventing cases of de-industrialization but also covers cases of red tape or corruption on the part of the government officials who are directly involved in the allocation of the available infrastructure budget. The EU is complex in the sense that it is composed of 27 different countries across the European continent. In line with this, the Central Intelligence Agency (2011) has identified the 27 members of the European Union as follows: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the UK. Free market competition among the EU member states and the free movement of goods and services are among the few goals associated with the development of industrial policy in the European Union.5 Considering the large number of EU member states, the challenge behind the formulation of industrial policy in the EU includes the limitation of the available industrial policy in preventing instances of market distortion and market discrimination among the EU countries. Given the complexity of the political and economic structure of the EU, this paper will focus on determining and critically assessing the main challenges associated with the formulation of EU industrial policy. As well as discussing the scope and limitations of industry policy in Europe, the inter-state and inter-regional markets within the EU will be tackled as part of the discussion of the significance of the framework aspect. Likewise, this paper will also analyse and discuss issues regarding the development of specific and sectoral industrial policies and issues related to horizontal industry. The scope and limitations of industrial policy in Europe The industrial policy in Europe is composed of two different kinds of policy, which could somehow directly or indirectly influence developments and market competition at the industry level. The non-industrial policies that could affect industry include economic issues related to price control, the issuance of tied development aid, industrial licensing, export promotion policies, the use of environmental policies which aim to control environmental hazardous substances, such as the spread of harmful chemicals which can pollute the available water resources, and buy national campaigns, among others.6 In the past, industrial policies have focused on targeting specific industrial sectors. Since it is extremely difficult to select winners from the specific industrial sectors, Porter (1990, p. 675) strongly suggests the need to make use of more neutral policies,7 such as the use of “indirect forms of government assistance”, which can be used in upgrading and improving the quality of the existing human resources or technology. Aiming to enhance the competitiveness policies in the UK and Europe in the 1990s [this means that Cowling et al. were aiming to enhance the policies. Is this what you want to say? YES], Cowling et al. (1999) explained the significant shift away from the use of pure sectoral initiatives towards the use of horizontal industrial policies. Today, the official industrial framework used in Europe is composed of three major divisions: the framework aspect (i.e., the use of cohesion policies or the competition policy used in establishing a single market for EU members and promoting free market competition among the EU members); horizontal industrial policy (i.e., research and development policies, provision of industry innovation stimulus, improvements in knowledge and skills of human resources, etc.); and the sectoral, specific and industrial policy (i.e., policies related to technology, regional and trade policies, etc.) as part of EU government control over the supply side.8 Even though industrial policies may somehow include issues related to macroeconomic management, Foreman-Peck and Federico (1999) explain clearly that industrial policy does not literally include policies that aim to solve problems related to industrial crises or issues related to high unemployment rates. In line with this, the presence of fiscal and monetary policies can be used in maintaining the microeconomic and macroeconomic stability of each EU member. Fiscal and monetary policies could affect the business performance of each company within an industry level. However, Foreman-Peck and Federico (1999) reveal that the use of this type of intervention should not be mistaken for part of the industrial policy because of the fact that there are some fiscal policies used in controlling non-industrial activities.9 Aside from the monetary and fiscal policies, Pelkmans (2006) identifies other types of policy that are not part of the industrial policy, including the use of tax-related policies, policies related to properties, infrastructure and energy resources, and agricultural and services policies, among others. The main challenges associated with the formulation of industrial policy in the European Union As identified by Pelkmans (2006), the official industrial framework used in Europe is composed of three major divisions, known as the framework aspects, horizontal industrial policy, and sectoral, specific and industrial policy.10 For this reason, the challenges associated with the design and implementation of cohesion policies and the competition policies which are often used in establishing a sound economic situation in relation to the EU single market and promoting free market competition among EU members; problems associated with the development of research and development policies; the provision of industry innovation stimulus; improvements in the knowledge and skills of human resources; and policies related to technology have been explored and tackled in detail. Considered horizontal in nature, there is a close relationship between the use of industrial policy and competition policy in the sense that “the competition policy can be use in imposing limits on the industrial policies in each of the member states”.11 Article 4 of the Treaty which establishes the European Community discussed the importance of free market competition within an open market economy12. In terms of enabling the EU as a single market to achieve its goal of practising fair market competition in inter-regional or inter-state trading, the power associated with the use of competition policy could somehow affect the success rate of developing an industrial policy which could work well for all member states.13 For this reason, competition policy is treated as one of the most important instruments when creating EU industrial policy.14 Given the continuously changing market environment in the EU, the need to shift from the use of the horizontal to a more vertical power allocation becomes necessary. In line with this, EU government needs to consider the need to change some parts of its constitutional framework upon which the development of competition policy is based. As one of the challenges associated with a single EU market, the pooling of the economic policies of each of the member states becomes necessary. Likewise, it is also a challenge on the part of EU government to create an industrial policy which could promote the EU’s overall competency. a. Framework aspect The framework aspect under EU industrial policy is designed to enhance the inter-state and inter-regional trading processes among the EU members through the use of unified economic and monetary policies. As the EU is composed of 27 different members, the development and implementation of competition, regional and cohesion policies is necessary, especially when it comes to the distribution of state grants or state aid normally given to less performing countries or regions. To avoid market distortion and lack of standards in the promotion of industry-related activities within the European Union, the development of an EU industrial policy framework is necessary. However, there are quite a number of challenges associated with the establishment of a fair industrial policy in the EU. Among those factors which trigger difficulty in creating a more efficient EU industrial policy framework, are issues related to the type of business ownership in each of the member states, having a two-tiered government structure, and the presence of existing trading and market competition regulations and policies. Since there are a total of 27 member states in the EU, it is difficult to promote the harmonization of each of the member states’ existing laws and regulations. As part of promoting the importance of market competition in the European Union, Pelkmans (2006, p. 49) explains that the kind of business ownership also matters in the sense that maintaining state-owned companies in each of the member states could promote market distortion, since the government in each member state could simply choose to protect the market and profitability of state-owned companies.15 Based on this point of view, forming an unbiased competition policy within the internal markets seems to be close to impossible because of the protection that state-owned companies receive directly from government. Even though it is clear that the EU industrial policy framework should promote the importance of the privatization of state-owned companies, having a zero-state-owned company in each of the member states is far from becoming a reality. It is unlikely that all people would support the idea of privatizing all state-owned companies in the European Union because of the political and economic benefits some powerful individuals receive from this type of business ownership. Upon analysing the economic situation in the EU, it makes sense that the internal market in this area is highly complex in the sense that the development of EU industrial policy should consider not only the two different levels of government (i.e., the European Commission and the government in each member state), but also all of the existing regulations and policies that directly or indirectly affect the free movement of goods and services.16 In line with this, there are cases wherein conflicts between the Commission and the Council may occur. In some cases, it is also possible for conflicts between the EU level and the member states’ level or among the member states in the Council to arise.17 Thus, developing a single industrial policy for the European Union becomes more difficult because of the need to consider the existing regulations and policies in each of the member states. According to Swann (1983, p. 1), competition policy includes “laws and executive organs which are directly related to the restrictive business practices, monopolies, mergers, and other related phenomena”.18 Establishing a single EU regulator is necessary to prevent internal market failure because of the presence of internal and external factors which could eventually distort the fair competition in the market (i.e., laws that support monopolistic power in the market, biased decisions in the distribution of government aid, etc.). Jones (2001, p. 323) mentions that the goal of developing industrial policy is to ensure that all government policies being developed and implemented could foster and protect European industries.19 In general, the competition policy was created to ensure that each of the member states would function properly and in harmony within their own state and with the other states. Likewise, competition policy was implemented in order to establish a market structure that could enable each of the member states to have high levels of employment, a more stable money supply, and the rights and freedom to enter into business contracts.20 Aiming to have better regulation in the European Union and among each of the member states, the main purpose of designing and implementing a regional policy is to ensure that there is a significant reduction in disparities related to economic, social and territorial issues.21 On the other hand, cohesion policy is designed to reduce the gap and differences between each region in terms of being a more favoured or less favoured region.22 Since the redistribution of wealth from richer nations to poorer ones is necessary to enable the EU as a whole to be able to stabilize its economic progress and development, it is possible on the part of the European Parliament to experience socio-economic and political pressure and lobbying among the richer national governments when designing and implementing cohesion policies in the EU. b. Horizontal industrial policy in the EU Horizontal industrial policy refers to “interventions applied across the board”.23 Based on this explanation, horizontal industrial policy is often used to improve the quality of production inputs by promoting the importance of higher education, the provision of vocational training programmes, the construction of a more efficient public infrastructure, investing in research and development, and promoting the importance of local and foreign technology transfer. The horizontal industrial policy in the EU aims to improve the market competition of industries among EU member states. Through the use of the European Information Society Action Plan, the policy makers have analysed how they can distribute government aid to regions that require intangible investments, such as the promotion of research and development, the provision of free education or training grants, and the need to promote the use of clean technologies.24 As well as the need to promote intangible investments, it is equally important to consider the need to develop industrial cooperation among the EU member states, ensure free market competition in the EU (i.e., the use of EU trade policy in making industry more efficient), and the need to improve the regulatory reform (i.e., laws and policy) used in managing the economic developments in the European regions.25 As part of promoting the importance of industrial cooperation among the EU member states, it remains a challenge on the part of the policy makers as to how they can effectively control the presence of legal and political barriers that often hinder the progress of industrial cooperation among the EU member states. For this reason, the horizontal industrial policy in the EU should develop a sound directive concerning this matter. With regard to the importance of promoting fair market competition among the EU member states, it is possible on the part of the policy makers to consider the use of coherent policy in the distribution of state aid. In general, applying the concept of horizontal industrial policy in the European Union is extremely difficult. In line with this, El-Agraa (1997) reveals that public policy should disregard the differences between horizontal and sectoral industrial policies because of the idea that industrial policy should include only the sectoral policies using horizontal measures.26 With regard to the significance of horizontal policy in the framework aspects of EU industrial policy, Pelkmans (2006) explains that the distinction between these two is not clearly defined because of the boundaries that are present in the framework of EU industrial policy. Another problem which may arise from developing a more efficient horizontal industrial policy in the EU is caused by the fact that the policy makers should consider the wide scope of issues that could affect the industry across the board. Specifically, the COM Report (2003) 690 entitled the European Initiative for Growth, exerts an effort to try to revitalize the Trans-European Networks (TENs) policy because of the presence of the unfair distribution of funding for infrastructure development in some of the EU member states.27 Delays in the development of the European infrastructure has become one of the major concerns of the European Union due to poor regulation and the presence of other constraints (i.e., spatial planning, available infrastructure funding, etc.). Given that a significant increase in the demand for products and services requires a more reliable network of infrastructure, the focus of developing the EU horizontal industrial policy should aim to foster the European perspective as well as enhancing the development of its public infrastructure, such as roads and bridges. In addition to building new roads and bridges, the EU horizontal policy should also consider the importance of enhancing EU member states’ air traffic infrastructure, telecom services and Internet or broadband facilities. The need for the continuous improvement of the available air facilities is necessary in order to prevent air transportation delays or the more costly re-routing of aircraft. On the other hand, the need to enhance the quality of telecom and Internet services is a significant part of promoting better inter-state and inter-regional trading between the EU member states.28 Considering the presence of lobbying or inappropriate methods used in prioritizing the rehabilitation needs of each member state, part of the problem related to the EU cohesion policy has more to do with determining ways of equally and fairly distributing the infrastructure investment budget to improve the telecom and Internet facilities, roads and bridges, and air traffic provision of the poorer EU regions. Several authors have explained that a decent amount of infrastructure funding can be used to boost the economic progress and development of the poorer EU regions through being able to award a significant part of the infrastructure budget to these areas.29 c. Specific and sectoral or vertical industrial policy in the EU Article 157 of the Treaty which establishes the European Community clearly states that “The Union and the Member States shall ensure that the conditions necessary for the competitiveness of the Union's industry exist”.30 Therefore, vertical industrial policy which pertains to “interventions applied across the sectors of the economy” has to be strengthened.31 Cowling et al. (1999, p. 21) explain that “the sectoral parts of the industrial policy form the central part of UK’s science and technology policy”. It is common knowledge that it is a rule that the sectoral policy or the vertical industrial policy should promote fair market competition. Although the use of vertical or sectoral industrial policy should be applied fairly to all sectors of the economy, the distribution of the available research and development (R&D) fund remains one of the main challenging issues behind the division of its research and development (R&D) budget. Under EU cohesion policy, the available investment fund is not limited in use to sector-specific projects but is also for the promotion of compensation measures which include the funding of human resources re-training programmes.32 In some cases, the available investment fund coming from the use of cohesion or regional policies for infrastructure can also be used for improvements to environmental clean-up operations.33 The challenges behind the development of technological policies under the sectoral and specific policies boil down to the fact that there is a strong need to consider not only the main concerns of the people within the level of the EU, but also within the member states level. In order to minimize the risk of developing unnecessary conflicts associated with the establishment of better technological polices, Pelkmans (2006) strongly suggests the need to invite the majority of the research experts within the sectoral level. By allowing the experts to discuss carefully the problems which may arise from designing and implementing newly-proposed EU technology policies, it is possible to create a more efficient EU industrial policy that mainly addresses the need for technological improvement. “Picking winners” is a method used wherein the government or an authorized public organization is given the authority to choose which sectors should receive government aid for R&D funds. As explained by Wessner (2003), the problem with using this particular selection approach is that there is a higher chance wherein the private sectors and the government decision-making bodies do not clearly consider the socio-economic consequences of market failure. In general, the use of the “picking winners” approach can make the EU government spend more than half of its available budget on the technological development of two significant sectors: defence and civil aerospace.34 Since the use of “picking winners” approach can promote bias judgement in the allocation of the available budget, Jones (2001, p. 324) revealed that “government intervention could do more economic harm than good”. Therefore, the use of the “picking winners” approach was eventually discredited when it comes to developing industrial policy for the European Union. In general, the European budget can be used for the improvement of roads, bridges and tunnels. In some cases, the available fund can be used in enhancing the knowledge and skills of human resources through education grants or the provision of free training programmes. With this in mind, the use of regional and cohesion policies could benefit several unspecific industries in the sense that the allocated European budget can be used in creating new jobs and business opportunities in the regions or states that will receive the funds. Mindful of the socio-economic and political pressure which may arise from prioritizing which of those among the poorest EU members should receive the budget, Marshall (2011) has revealed that a total of 10 Central and Eastern European states and 25 members of the Council of Ministers negotiated and tackled the issue concerning future developments in the EU structural funds in 2004.35 In line with this, the group discussed how they could effectively avoid biased judgement when it came to deciding the priorities for the allocation of the limited available annual budget. Analysing the challenges associated with formulating EU industrial policy Given the fact that it is very difficult to develop horizontal and vertical (sectoral and specific) policies based on general terms, one of the most significant parts of EU industrial policy is the development and implementation of a strong EU framework aspect. As compared with horizontal and vertical (sectoral and specific) policies, it is so much easier to create a strong EU framework aspect. For this reason, the EU framework aspect can be used as the backbone when developing EU industrial policy. The presence of horizontal and vertical (sectoral and specific) policies is considered a hindrance when developing EU framework aspects. In general, the horizontal and vertical (sectoral and specific) policies are commonly used by the EU government when designing industrial policy in creating and promoting enterprise policies that could enhance its internal market’s competitiveness. Therefore, issues related to horizontal and vertical (sectoral and specific) policies often give rise to further challenges when formulating industrial policy for the European Union. Competition policy can be used in controlling the presence of market failure, such as market distortion caused by the presence of a monopolistic market structure or biased support coming from the member state government. In other words, a competitiveness policy is important in terms of promoting fair trading practices, particularly amongst the small and medium-sized enterprises (SMEs) in the EU industry sector.36 Even though the issue of maintaining industry competition seems to be a pretty straightforward topic when applied to a single business organization, designing a policy that could promote industry competition among the different industry sectors in the various EU member states is never easy. The challenges associated with the development of a more efficient EU competitiveness policy are far from being easy to overcome because of the presence of controversial issues such as the unfair treatment of the less fortunate member states. The presence of restrictive policies which could hinder the growth of a certain industry is another challenge associated with the development of industrial policy in the European Union. Specifically, the internal market in the EU is highly dependent on the fast-growing service sector.37 The fact that the presence of external barriers related to restrictive regulations could somehow hinder the EU service market from progressing led to an EU framework which aims to promote a more harmonized business service being presented in the “services draft directive” in COM (2004) 2.38 In order to gain benefits from EU industrial policy, the focus of this policy should be on the specific industry sector which has a very promising market demand in the near future. Since there is a significant decline in the work availability in the manufacturing sector, it is crucial on the part of EU industrial policy to promote and financially support the development of the knowledge and skills of its human resources. By strengthening the quality of service that can be provided by the locally-based human resources, a member state can reduce the cost of outsourcing work-related services or even hire qualified employees from other countries. Several authors have revealed that the information and communications technology (ICT) services in the European Union are not as competent when compared with the ICT services which are being offered in the United States.39 As well as the business-related services in the member states of the European Union, the formation of industrial policy in the EU should also consider promoting the importance of its ICT services, particularly in the promotion of economic integration among EU member states. Conclusion and recommendations Given that the formulation of industrial policy in the European Union should be able to promote free market competition and the free movement of goods and services among the EU member states, the policy makers of EU industrial policy are facing a number of challenges owing to the complexity of the political and economic structure of the EU. As well as having a two-tiered market and political structure, the presence of existing trading and market competition regulations and policies which could hinder inter-state and inter-regional trading makes it more difficult for the policy makers to maintain free market competition among the EU member states. In fact, the presence of these challenges could lead to the creation of a distorted internal EU market. Even though regional policy and cohesion policy have been designed and implemented to ensure that there is a significant reduction in the disparities related to economic, social and territorial issues, particularly when it comes to the allocation of EU state aid, the problems of the redistribution of wealth from the richer regions to the poorer ones remain unresolved. As a result of the presence of political pressure and lobbying among the national governments when designing and implementing cohesion policies in the EU, this study strongly recommends the need for the policy makers to take care in choosing the best approach when making important decisions concerning the allocation of funds which can be used for infrastructure development, the promotion of research and development, the provision of free education or training grants, and the need to promote the use of clean technologies. Developing or formulating industrial policy for the European Union should be based on neutral grounds, not only when it comes to the issues related to ownership but also in terms of fairly allocating the available EU government funds. Instead of using the “picking winners” approach, it would be more appropriate to make use of a “market-driven” approach when formulating the industrial policy for state aid. Through the use of a “market-driven” approach, the policy makers of the European Union could prevent cases and issues related to lobbying or collusion between the EU government and some members of the private sector. Endnotes 1. Foreman-Peck and Federico (1999) tackle an in-depth explanation concerning industrial policy. 2. See Jones (2001, p. 324). 3. See Europa (1990) for a discussion on how industrial policy in the European Union was developed. 4. See EurActiv (2007), which tackles economic problems related to de-industrialization. 5. Pelkmans (2002) mentions the importance of free market competition and the movement of goods and services in the EU market. 6. As a result of the challenges associated with the use of industrial policy, Cowling et al. (1999) discuss the link between horizontal policies and targeting regions that will be given state aid; see also, Pelkmans (2006, p. 46). 7. Article 295 of the Treaty which establishes the European Community states that the EU Treaty is based on neutral grounds in respect of each of the member states. 8. Pelkmans (2006, p. 47) provides a clear explanation of the framework behind the industrial policy used in the European Union. 9. See note 5. Pelkmans (2006, p. 46) identifies and explains the differences between policies that are considered a part of industrial policy and those that are not included; Foreman-Peck and Federico (1999, p. 4) also provide some explanations as to why fiscal policies are not always a part of industrial policy. 10. Pelkmans (2006, p. 47) provides a clear framework behind the industrial policy used in the EU. 11. Sauter (1997, p. 109) discusses the importance of competition policy in maintaining the competitiveness of European industry. 12. Chalmers et al. (2007, p. 1115) provided a summary of the Article 4 of the EC Treaty. 13. Article 130(3) of the Treaty which establishes the European Community clearly states that it is a requirement for all member states to contribute towards reaching the goals of industrial policy by pursuing provisions stated under the Treaty. 14. Ibid. 15. As part of a discussion of the scope and constraints of European industrial policy, Pelkmans (2006, p. 49) provides a clear explanation on how having state-owned companies could distort the market. 16. Pelkmans (2006, Chapters III to X) provides a detailed analysis of the economic situation in the EU internal market. 17. Ibid. 18. For a simple explanation regarding what competition policy is all about, see Swann (1983, p. 1). 19. Jones (2001, p. 323) explains that industrial policy has been intentionally developed in order to promote the socio-economic welfare of the European industries. 20. Neumann (2001, p. 1) provides a clear explanation regarding the aims and scope of competition policy. 21. The European Commission (2011) tackles the main purpose of creating EU regional policy. 22. The Assembly of European Regions (2011) discusses the main objectives of creating a cohesion policy. 23. Nabli (2007, p. 138) provides a clear explanation of the differences between vertical and horizontal industrial policy. 24. See COM (1994) 319. Published on 14 September 1994. In Commission of the European Communities. For a European Union Energy Policy. Green Paper presented by the Commission. Brussels, 23.02.1995. COM(94)659/Final/2. 25. Ibid. 26. After differentiating between the competitiveness policy in the UK with Japanese industrial policy, El-Agraa (1997) offers the suggestion that public policy should be based on sectoral policies in consideration with the horizontal measures. 27. See COM (2003) 690. European Initiative for Growth. Published on 21 November 2003 explained the need to revitalize the Trans-European Networks (TENs) policy to ensure that each of the poor member states of the EU will receive funding for infrastructure development purposes. 28. See Commission communication of 2 December 2004: "European Electronic Communications Regulation and Markets 2004" [COM(2004) 759 final - not published in the Official Journal] 29. Martin (1999) explains that the use of government aid could create more job opportunities for the local people; see also, De la Fuente and Vives (1995). 30. Even though the European Constitution is not yet clearly defined, the idea that competitiveness in industry among the EU member states has been taken from the clause in Article III – 279. 31. Nabli (2007, p. 138) provides a clear explanation of the differences between vertical and horizontal industrial policy. 32. Pelkmans (2006) tackles issues of where the available funds for infrastructure investment can be used among those member states who are granted government aid. 33. Ibid. 34. Wessner (2003, pp. 115-116) identifies the reasons why government should not be given the authority to select sectors when distributing the R&D budget; see also Cowling et al. (1999, p. 21). 35. Marshall (2011) discusses the challenges and opportunities associated with the use of cohesion policies in an expanding union. 36. See COM (1999) 569. Report on concerted action with the Member states in the field of enterprise policy. Published on 9 November 1999. 37. See COM (2004) 83. Report on competition in professional services. Published on 9 February 2004. 38. See COM (2004) 2. Bolkestein directive. Published on 13 January 2004. In Pelkmans, Hanf and Chang (2008) on page 58. 39. Van Ark et al. (2008) discuss the trend and causes of the production gap that occurs between the United States and Europe; see also Denis et al. (2005, pp. 19-36), who discuss the importance of being able to provide highly competitive ICT services in the European Union. References Assembly of European Regions (2011) The AER and EU Cohesion policy: assessing the present and anticipating for the future. Available: accessed 9 May 2011. Central Intelligence Agency (CIA) (2011) Introduction: European Union. Available: access 10 May 2011. Chalmers, Damian, Hadjiemmanuil, Christos, Monti, Gorgio and Tomkins, Adam (2007). European Union law: text and materials. Cambridge University Press. Commission Communication. (2004, December 2). 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Swann, Dennis (1983) Competition and industrial policy in the European Community, London: Methuen & Co. Van Ark, Bart, O'Mahony, Mary and Timmer, Marcel P. (2008) “The Productivity Gap between Europe and the United States: Trends and Causes”, Journal of Economic Perspectives, 22(1), pp. 25-44. Wessner, Charles W. (2003) Government-industry partnerships for the development of new technologies. Washington, DC: National Academy of Sciences. Read More