A Systemic Industrial Policy to Pave a New Growth Path for Europe

The European Union is a successful integration experiment, with an increasing number of member countries and an unexpected depth of integration. According to many indicators, it is the largest economic region in the world, leading in many "beyond GDP" indicators representing well being including non material goals. The EU has, however, lost economic dynamic in the last decades and has failed to catch up with the USA in technology and per-capita GDP. Europe has internal disequilibria, its population is ageing and it did not follow its own innovation strategy. Three questions arise in this context: 1. whether Europe should try to go back to the core (deepening integration for a smaller homogenous group), 2. whether it should go for a low road strategy of competitiveness (lowering wages and taxes, forfeiting high quality specialisation and sophisticated standards), and 3. whether it should actively try to develop its own "European Model" and offer this model to its neighbors. A European research project was tendered by the European Commission in order to analyse options for Europe in the globalised world. This 7th Framework Programme project, with the acronym "WWWforEurope", will provide evidence-based research in support of the Europe 2020 Strategy in its four-year in-depth research to be carried out by WIFO and 32 international partners. One important aspect of this strategy is a new "Systemic Industrial and Innovation Policy" (SIIP) which is pulled by the vision of a new growth path of social development and higher emphasis on sustainability. SIIP is further pushed by internal and external competition, openness as well as new technologies and capabilities. This working paper provides some first tentative answers to the three raised questions above. It furthermore sketches the broader research question, challenges and research areas to be answered in the WWWforEurope programme.