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Presidential elections 2022, towards a real return to our industrial sovereignty?

Source: jeanjacquesmichau.com

In a previous article, I wrote a call for digital sovereignty to be at the center of the discussion of the presidential elections. To be heard, this call must be placed in a broader context of regaining our industrial sovereignty.

Is this reconquest of our sovereignty possible? And what signals are being sent by our ruling elites, and especially our politicians??

Industrial sovereignty, issues and findings?

The awareness of the need for a return to more sovereignty in our industrial policy has long come up against the total hegemony of neo-liberal and free trade economic thinking.

The revival of free trade can be traced back to the end of the Second World War, with the principle of non-discrimination applied to trade in goods and services (Wiki). This economic theory is supported by economists such as Paul Krugman and Milton Friedman. If the theory is that in a “perfect” framework where free trade is the rule, all countries benefit from the enrichment produced, the reality of the results observed is quite different. Each country or culture has its own aspirations and modes of organization, and social rules that necessarily impact the outcome of this liberalization, not only on the economy, but also on the social structures of the various actors.

Entire industries have been relocated to the other side of the world to be closer to low-cost production sites and/or raw material producers. All this was made possible by ever more efficient supply management methods and increasingly optimized transport.

The limits of this approach were perceived, but not always sufficiently intellectualized, and as is often the case in “normal” economic times, the real or supposed disadvantages of this approach were not, or not sufficiently, perceptible.

The pandemic crisis has swept away all the certainties of the advocates of happy globalization… The West has realized that it had allowed entire sections of its industry to be relocated to the other side of the world, to China or Asia… The consequence was immediate, a crisis causing disruptions in the production chain and in the logistics of the delivery of goods. In the virtual absence of stocks, shortages and stockouts quickly became apparent…

These effects being visible and immediate, it was no longer possible to explain these dysfunctions other than by the absence of a local industrial fabric. However, the evil is deeper, and the results are as follows:

  • Increased poverty and unemployment in countries that are massively relocating their industries, resulting in increasingly unbearable costs for the community.
  • Unsolvable budget problems, mass unemployment accepted de facto, prevents investment in education and research which are the keys to tomorrow’s growth.
  • Loss of skills, due to the deterioration of the educational level, but also because the factories are no longer in France and the required skills are acquired by the populations of the countries where the production has been relocated.
  • Loss of innovation capacities, innovation is inbred in the industry, it does not only come from a “well done” thinking head…
  • Unacceptable ecological impacts given the current situation (carbon emissions and pollutants, pesticides, etc.)
  • Total dependence on third countries for strategic supplies.

The observation may seem harsh, but a large part of the population feels it deep inside.

But what is at stake? What is the objective of industrial sovereignty, and I would even say of sovereignty in its broadest sense?

The first challenge, in my opinion, is to define a 15-year plan to reindustrialize and strengthen France’s industries. To do this, we must first define the key sectors and prioritize them (Agri-food, Defense, Digital, Health, etc.)

The second issue is to define the geopolitical strategy and therefore the position and power that we wish to give to France in the next 20 years. Indeed, without a clear and precise definition of our strategic axes, how can we ensure that cooperation and trade agreements are aligned? For example, I am opposed to military cooperation agreements with Germany. We have neither the same industrial interests (LaTribune), nor the same commercial interests, and even less the same geostrategic interests (Marianne, LesObservateurs.ch)… The German Bundestag will have no qualms about banning exports of military equipment, for example, or authorizing them according to its geopolitical interests (e.g.: delivery of its submarines to Turkey, with which we are in latent conflict, or even reduction of exports by Germany, even though this impacts French industrial groups, when there are German components – Challenges)

The third issue is education. Indeed, we cannot envisage a strong industry, especially in the digital field, if we allow the level of mathematics and science to collapse. Tomorrow’s industries will be knowledge-based.

The fourth challenge is the ecological transformation, and in this field, the reindustrialization of France is one of the levers, as the shortening of supply chains will have a positive impact on carbon emissions. But this is not the only interest of taking into account the ecology in the reindustrialization of our country. I believe that we must no longer think sector by sector, but how to establish ecosystems where each industry feeds off the other, with the waste from one serving as raw material for the other. We need to think out of the box, as the Anglo-Saxons say. We need to think about small, multi-activity complexes, using new technologies such as Artificial Intelligence, nanotechnologies, and 3D printing. It’s all about pushing the logic of the circular economy to its maximum capacity.

The fifth challenge is to simplify standards, without degrading essential protections. To be much more pragmatic in our legislation, and to undertake a real clean-up by deleting previous texts if they become obsolete…

The sixth issue is a change of economic paradigm, historically we have had phases of free trade economy (liberal), it is a model particularly adapted to the Anglo-Saxon cultural domination (free trade policy of 1860-62 in Europe under the impulse of England), but we have also had more “protectionist” periods, which allowed the French industry and its cultural organization to shine (return of protectionism in France by the Law Méline 1892 – Valeurs Le club)

These are, in my opinion, the 6 biggest challenges that we need to tackle in order to become an industrial, economic and geopolitical power that counts. To do this, we will of course have to rely on our assets, but we will also have to question a certain number of international agreements that would otherwise restrict us in reaching our objectives.

What concrete signals are being sent by our leaders?

I must say that this is a question to which I have a lot of difficulty in giving an answer. Indeed, if at times we seem to discern a certain awareness, mainly because of the health crisis, it remains difficult to measure its extent. How to separate the effects of announcements and political posturing from real measures and long-term awareness…

When a certain number of governmental measures are taken, such as the decision to relocate drug production to the national and/or European territory, one can feel optimistic …

But when at the same time we do not denounce a large number of trade agreements signed by Europe that put our producers (especially in the agri-food sector) in competition with countries that do not respect the same environmental, health and social standards, we can doubt it… Similarly, when France, through poorly drawn up defense cooperation agreements, is ready to let itself be plundered of its industrial know-how (e.g., SCAF: the future Franco-German replacement for the Rafale and the EF-2000). Similarly, when the state is (or was?) ready to let EDF be dismantled in order to destroy the French nuclear industry, which is one of our rare competitive advantages with Germany, one can only worry. And I am not talking about the confounding naivety or the crass incompetence on the subjects of digital sovereignty in the technological choices made on different occasions (Health Data Hub, PGE de BPI, Cloud de confiance, Stratégie pour le numérique)

It is therefore difficult to understand if there is a real awareness and if we are moving in the right direction, hence the need, despite all the hot topics that will be on the menu of the presidential election, to mobilize ourselves so that the subject of our industrial, economic and digital sovereignty is addressed and put forward. It is important that everyone can understand the stakes and build a proposal that the candidates could seize.

What are the key points for the 2022 presidential election?

If you have followed my reasoning, you can normally already deduce some fairly obvious guidelines. I will try, here, to limit myself to 5/6 major points to start the reflection.

The prerequisite, even before starting any action, is to ask the question about our willingness to change our economic approach, especially in relation to free trade. Do we want to question this doxa completely, to regulate it or to change nothing? Obviously, the last proposal on the subject renders null and void any attempt to regain sovereignty.

The first step is then to build the vision of France in the next 50 years in economic, industrial, cultural and geopolitical terms.

The second step consists in starting from this vision to define the strategic sectors whose mastery is essential and to build a strategy to reconquer these sectors. Realism is required. Not everything can be a priority. It is therefore necessary to make a SWOT analysis (Strengths Weaknesses Opportunities Threats, in French), with the need to rely on our strengths and to minimize the impacts induced by our weaknesses.

As strong points we have the defense industry (Nexter, Dassault Aviation, Naval Group), we have the nuclear industry that needs to be reconsolidated (we have stopped investing for too long), the food industry (even if our leadership in this sector is contested), the luxury industry. We still have sectors of excellence where we have unfortunately let our flagships leave with a majority of foreign (German) capital, such as aeronautics (Airbus) or space with Ariane espace… On this last element, we are appalled to learn of the betrayal of the French government which has decided to move the manufacture of the Vinci engine of Ariane 96 from Vernon (Eure) to the site in Germany, at a cost of 140 million euros in budgetary extension (FranceBleu).

We need to rediscover former areas of excellence, such as the fabric industry, where only the exceptional technical fabric sectors remain. Or the pharmaceutical industry, where 10-15 years ago we were still number 1 in Europe.

The third step is a profound transformation of our education system, to put excellence back at the heart of the system. This transformation must be aligned with the objectives of the first stage, so that we can provide the nation with the vital forces needed to achieve these ambitious goals. However, we need to correct the shortcomings of the past system, which looked down on “non-intellectuals”, we need diverse profiles with complementary skills that will allow us to excel in the economy of tomorrow. We will need engineering profiles in the priority areas mentioned, but also excellent technicians and skilled workers. We need to give back to all the actors of the French economy the pride of their job, to make disappear this contempt for manual jobs and to revalue them in the same way as the jobs calling on the only abstract intelligence.

The fourth step, which must also be carried out at the beginning of the mandate, is the global renegotiation of a number of trade agreements and international treaties. This will be an essential step, probably with a referendum so as not to be hindered by supranational legislation, especially if we wish to protect ourselves by setting up certain customs barriers.

The fifth step, which is not the last one, far from it, but which will be the one with which I will conclude this part, is to set up the budgetary tools (to direct at least 50% of the equipment budgets of the administrations towards French equipment manufacturers, or when they do not exist, towards European ones) and of taxation (ecological taxes for example, or social VAT), in order to encourage local manufacturing with the right social and environmental standards.

Conclusions

As you can see, the task is large, it can start in the next term, but it will be necessary to maintain the effort over time. This can only be done and considered if the options are discussed calmly, trying to present the advantages and disadvantages of each of the possible choices. It is important that these choices are supported by a strong majority of our citizens and politicians, because it is a commitment to a vision for half a century! If we want to succeed and reap some of the rewards, but above all give our children a future, we will have no choice. Of course, success can only be achieved through the mastery and sovereignty of two key industrial and technological sectors: digital technology and ecology (especially in the use of decarbonized energy). It is therefore crucial for us to succeed in creating international champions surrounded by a rich and solid ecosystem. This can only happen with an ambitious government policy, but also by making French economic players aware of their responsibilities, especially the cac40 groups.

I hope that these few ideas that I am proposing will meet with support and serve as a starting point for a constructive discussion and concrete proposals!

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