A policy for industrial champions

The EU has experienced different options to support the emergence of champions: (i) targeted support for strategic sectors and large technology initiatives (e.g. Airbus, Ariane, HDTV and ESPRIT); (ii) a support of declining sectors with the ECSC Treaty; and (iii) an emphasis on horizontal policies since the early 1990’s. Recently, the disappointing performances of certain high-tech sectors and the growing productivity gap with the US have raised concerns about the ability of the pro-market approach to help EU companies withstand international competition. Stylised facts show that the EU does not suffer from the absence of large world-class companies, but rather from the absence of growing companies in new high-technology industries. With a few exceptions, the EU has not been able to promote the emergence of international players in the fast-growing sectors of the economy. Against this background, the paper reviews the arguments for and against prochampions policies and explores the contribution of different EU policies – competition, trade and research - to the twin goal of providing a stimulating and disciplining environment for large companies while at the same time facilitating the growth of young innovative enterprises.