ABSTRACT
This chapter explores the potential industrial policy role of European state-invested enterprises (SIEs) in the 21st century. This is done by analysing the evolution of European state-owned enterprises (SOEs) from their rise in the second half of the 20th century to their partial privatization, and the subsequent transition to the model of SIEs in recent years. Partial privatization was a key step in SOEs’ transformation because it entailed the demise of public policy mandates from their statutory provisions. As a result, most current SIEs are managed as private enterprises. However, the chapter argues that SIEs can still play a role in serving national interests, particularly in their global sphere of action. In fact, SIEs that operate in global strategic markets (e.g. natural resources, advanced technologies and transnational infrastructure) provide essential inputs to the domestic economy. This is an element of continuity with the traditional industrial policy role of SOEs. It suggests that, despite being mainly driven by profitability, SIEs’ business still has a profound impact on economic competitiveness. Because of this systemic role, SIEs can act as industrial policy tools for states to address some of the current economic challenges. For example, their ability to supply cheap and abundant inputs to domestic markets can provide a decisive contribution to counteract the relative decline of European economies vis-à-vis emerging economies. For this reason, the chapter suggests new ways for European states and SIEs to cooperate and maximize mutual synergies. However, in the light of the extensive changes that have occurred in domestic and global markets, their cooperation should be different from the past. In particular, cooperation should make it possible to simultaneously address operational efficiency and industrial policy objectives, which are both important to face international competition from economic and political actors.
