Innovation and Industrial Policies Innovation between Risk and Reward Set coordinated by Bernard Guilhon and Sandra Montchaud Volume 5 Innovation and Industrial Policies Joël-Thomas Ravix Marc Deschamps First published 2019 in Great Britain and the United States by ISTE Ltd and John Wiley & Sons, Inc. Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licenses issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned address: ISTE Ltd John Wiley & Sons, Inc. 27-37 St George’s Road 111 River Street London SW19 4EU Hoboken, NJ 07030 UK USA www.iste.co.uk www.wiley.com © ISTE Ltd 2019 The rights of Joël-Thomas Ravix and Marc Deschamps to be identified as the authors of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988. Library of Congress Control Number: 2019946976 British Library Cataloguing-in-Publication Data A CIP record for this book is available from the British Library ISBN 978-1-78630-072-0 Contents Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix Chapter 1. Industrial Policy and Competition . . . . . . . . . . . . . . . . 1 1.1. The State and industrial policy . . . . . . . . . . . . . . . . . . . . . . . . 7 1.1.1. The State organizing the economy . . . . . . . . . . . . . . . . . . . . 8 1.1.2. Challenging the economic role of the State . . . . . . . . . . . . . . . 16 1.2. Competition policy as the area of public action . . . . . . . . . . . . . . 19 1.2.1. Control of the market architecture . . . . . . . . . . . . . . . . . . . . 21 1.2.2. Monitoring the functioning of markets . . . . . . . . . . . . . . . . . 38 1.3. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Chapter 2. Competition and Innovation Policy . . . . . . . . . . . . . . . 53 2.1. The renewal of the framework of thought . . . . . . . . . . . . . . . . . . 54 2.1.1. A new competitive economics . . . . . . . . . . . . . . . . . . . . . . 55 2.1.2. The geography of innovation . . . . . . . . . . . . . . . . . . . . . . . 60 2.1.3. Innovation and competition policy: the Lisbon strategy . . . . . . . 65 2.2. Innovation policy as a “new industrial policy” . . . . . . . . . . . . . . . 69 2.2.1. Innovation and territory: competitiveness clusters . . . . . . . . . . 70 2.2.2. A new institutional framework for innovation . . . . . . . . . . . . . 76 2.2.3. Support for innovative SMEs . . . . . . . . . . . . . . . . . . . . . . . 78 2.3. The ambiguities of the “new industrial policy” . . . . . . . . . . . . . . . 81 2.3.1. The logic of agglomeration . . . . . . . . . . . . . . . . . . . . . . . . 82 2.3.2. The logic of development . . . . . . . . . . . . . . . . . . . . . . . . . 84 2.3.3. A new mode of governance . . . . . . . . . . . . . . . . . . . . . . . . 85 2.4. The Programme d’investissement d’avenir (PIA) . . . . . . . . . . . . . 87 vi Innovation and Industrial Policies 2.4.1. The logic of the Juppé-Rocard report . . . . . . . . . . . . . . . . . . 88 2.4.2. The PIA architecture . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 2.4.3. The link between the PIA and the competitiveness clusters . . . . . 93 2.5. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 Chapter 3. Reindustrialization Through Innovation . . . . . . . . . . . . 97 3.1. The affirmation of an industrial ambition . . . . . . . . . . . . . . . . . . 100 3.1.1. A new concern: industry . . . . . . . . . . . . . . . . . . . . . . . . . . 101 3.1.2. The return of the sector concept . . . . . . . . . . . . . . . . . . . . . 104 3.2. The nature of the industry . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 3.2.1. Problems in defining the industry . . . . . . . . . . . . . . . . . . . . 109 3.2.2. The question of industrial organization . . . . . . . . . . . . . . . . . 115 3.3. Towards a renewal of State intervention . . . . . . . . . . . . . . . . . . . 122 3.3.1. The new virtues of industrial policy . . . . . . . . . . . . . . . . . . . 123 3.3.2. Rediscovering the argument for infant industry . . . . . . . . . . . . 126 3.4. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 Acknowledgements During the preparation and writing of this book, we had the opportunity to interact with many colleagues and professionals from the public and private sectors. We would naturally like to thank them for their time. The authors also thank their respective laboratories, GREDEG and CRESE, as well as BETA and OFCE-Sciences Po. We would like to express our warmest thanks more directly to those who have agreed to review the entire book, or parts of it, namely: Sylvain Béal (University of Bourgogne – Franche-Comté and CRESE), Julie Beugnot (University of Bourgogne – Franche-Comté and CRESE), Patrice Bougette (University of Nice Sophia Antipolis and GREDEG), Nicolas Mouchnino (SFIC), Julien Pillot (Inseec U, University of Paris-Saclay and RITM), Olivier Sautel (Deloitte Economic Advisory), and Céline Savard-Chambard (University of Lorraine – EEIGM). For this English version of our book, we are indebted to Jenny Helstroffer (University of Lorraine and BETA) and Alexandra Jordan. Of course, none of them, nor their institutions, can be held responsible for the opinions we express or for any errors or shortcomings that may remain.