New Challenges for Industrial and Structural Policy

Competitiveness is an important goal for economic policy and companies. However, it is defined in highly different ways, and this often results in contradictory economic policy conclusions. The present paper shows the path from a purely cost-oriented point of view to a definition based on economic and societal goals. This definition allows consistent pursuit of a high-road strategy: it uses innovation, skills and ambitions to achieve high income levels, social cohesion and ecological excellence. The concept as well as the economic development recommends also redefining industrial policy as systemic policy and a concept of structural policy focussing on innovation, skill upgrading, sustainability and the quality of the public sector and to change from a purely market based to a "responsible" globalisation. On the basis of the new concept, the competitiveness of European countries based on broader welfare indicators is definitely higher than on per-capita income alone. None of the more successful European countries is pursuing a cost-oriented, low-road strategy.