National industrial policy – Do we need national champions?

Should the state employ an active industrial policy that gives a lower priority to competition policy to “breed” enterprises that can compete on international markets? For Prof. Jürgen Donges, University of Cologne, government initiatives aimed at champion building or champion defending reach their limits very quickly. The better way is the creation of general conditions that give the enterprises a strong stimulus to invest in research and development at home and to achieve a rapid implementation of research results into new, marketable products. In the opinion of Dr. Dieter Heuskel, Boston Consulting Group, “There is no question that the development of internationally competitive enterprise strategies is primarily a task of management, including decisions for investments and site locations. The task of economic policymakers – both national and European – is to design the conditions of competition such that European enterprises have freedom of movement and can act strategically in international competition and also at their domestic locations.” For Dr. Kurt Christian Scheel, Federal Association of German Industry (BDI), Berlin, the question is not whether we need national champions. “National champions are of course desirable. However, these should develop out of their own strengths following the laws of the market. Only the market can decide which enterprise succeed or fail. The task of the state is to ensure, by creating appropriate general conditions, that Germany remains attractive for investments, which are the basis of this growth.”