Industrial Urgency!
Gabriel Colletis
October 2015
The presentation plan
1. The place of the industry
is better recognised today
2. The reasons of the industrial decline
3. The components of an « Industrial
Contract »
at the heart of a new Development model
2/22
1.
The place of the industry
is better recognised today
1/3
Until there is a little, the place of the industry
was considered as marginal
Now we discover that no country can
remain without developed productive base
At the same time we observe that countries that
develop are based on the expansion of their
industrial sector
Direct and indirect Industrial jobs (services linked
to industry) represent 45% of the total
employment in the market sector
The industrial sector realises 80% of all
exportations and 85% of R&D expenditures
3/22
1.
The place of the industry
is better recognised today
2/3
But…

The part of all european developed countries
within european industrial exportations
decrease, except those of Germany
The industrial job losses and plant closures
seem to be accelerating …
4/22
1.
The place of the industry
is better recognised today
3/3
The competitiveness of the industry
in most European countries has
deteriorated, generating macroeconomic
and social problems…




the foreign trade deficit weighs on growth
which generates unemployment
lower revenue and tax revenue
resulting in a worsening of the public deficit
5/22
2. The reasons of the indusrial decline:
the reasons frequently given
A bad specialisation (price sensible)
Too high costs
An overestimation of the Euro/Pound
The too small place of the SMEs
Bad relations between big enterprises
and their suppliers
Tropism on services and high technologies
Too low growth croissance…
6/22
2. The reasons of the industrial decline:
three less frequently cited reasons
1. The extraversion, then the financialisation
of the big groups
2. An inefficient industrial policy
3. An outdated conception of work
=>All these reasons converge and work
as a « system »
=>There is no simple issue to the industrial
and economic crisis
7/22
2. The reasons of the industrial decline:
three less frequently cited reasons
1. The extraversion and then the
financialisation of big groups



The fate of big/global groups appears not to
be anymore linked with that of the national
industrial basis
Their overseas investments are more
important in the long run than those made in
their home economy
The capital structure of these group is very
open to global investors
8/22
2. The reasons of the industrial decline:
three less frequently cited reasons
2. An inefficient industrial policy


The industrial policy is centered on
(individual) groups
It does not support interactions among the
productive system (firm/firm cooperation,
firm/public laboratories/universities)
9/22
2. The reasons of the industrial decline:
three less frequently cited reasons
3. An outdated conception of work




The labor remains considered as a cost
And not as a contribution of individual and
collective skills
What constitutes an obstacle to the
implementation of a comprehensive
competitiveness strategy centered on
innovation
This obstacle does not allow the shift towards
a new development model
10/22
3. The components of a
productive pact
European countries must engage in a
productive activities development program
which must take place as the backbone for
economic policy
We can identify a set of components of
such a “pact”…
11/22
3. The components of a
productive pact
1. Another labor design should gradually
emerge in correspondence with a different
conception of competitiveness


Switching to the overall competitiveness is
inextricably linked to the recognition of
employee skills
A new historical compromise is needed


between companies that choose to focus on
innovation
and employees who become "cognitive“
(knowledge) workers
12/22
3. The components of a
productive pact
2. Finance must be made to serve more
productive activities
“Temporal retardants" are necessary to make
finance again liquide (instead volatile) playing
on taxation and voting rights calculated in
proportion to the holding period of the shares
13/22
3. The components of a
productive pact
3. Production must be reoriented to
address basic needs ... to reduce the
burden of productive activities on
nature


The basic needs remain considerable,
including in developed countries
These needs will be covered by production
methods significantly reducing levies on
nature
14/22
3. The components of a
productive pact
4. The firm (large) should be recognized as a
separate institution (separate from the
company/corporate)
 There are now a wide variety of legal
forms for companies/corporate but also a
legal vacuum in most countries for the firm
 The (large) firm should be "established“
 with a separate governing body of the
corporate
 and stakeholders including long term
equity holders + employees for the skills
they bring
15/22
3. The components
of a productive pact
5. Anchoring activities has to go beyond
"simple" location
Location concerns:

land, buildings, infrastructure,
grant equivalents
Anchoring activities means a triple proximity:

spatial, based on competencies,
trust/confidence
16/22
3. The components
of a productive pact
6. Social norms but also financial and
environmental should be part of more
balanced trade, more respectful of man
and nature


Protectionism is not an end in itself
However, without protective standards, a
new development of productive activities
can not be undertaken
17/22
3. The components
of a productive pact
7. Developed countries should strive for a
new development model considering the
industry as a "common good"


The industry can not be considered as a
private good like any other
It also can not be nationalized
…/…
18/22
3. The components
of a productive pact
The industry must be considered a
common good in which stakeholders of the
firm are beyond the scope of providers of
capital and labor, to embrace other
stakeholders

as other companies (suppliers or clients),
training and research institutions, public
bodies, associations ...
19/22
3. The components
of a productive pact
8. Economic policies must be based
on this model and focusing on the
long-time
They must find ways and means of a
new development
 rather than simply to stimulate or not
to break growth

20/22
3. The components
of a productive pact
9. Industrial policies should aim to increase
the density of interactions within the
productive system rather than supporting
individual firms
Ensuring the promotion of networks involving
SMEs / SMIs considered as partners and not
just suppliers or subcontractors

By entering these networks in territories when
possible
21/22
3. The components
of a productive pact
10. The firm must be at the heart of the
city, which implies a widening of the
labor democracy



The labor democracy, rather than
technological advance, is the main competitive
advantage of developed countries
The labor democracy is the sine qua non of a
strategy focused on innovation
It involves employees who are better trained,
having technically and economic culture,
participating in strategic decisions
22/22