Allez les Bleus

Dieter Adam 13 June 2023

The hard hat may still sit awkwardly, but there can be no doubt that the French President, Emmanuel Macron, and his government have recently ‘discovered’ manufacturing. Better known so far for his fascination with start-up companies, Macron appears to have now understood that allowing manufacturing to wither away further might not be in his country’s best interest. France has lost close to 1 million manufacturing jobs since the year 2000. Now the French government has launched its ‘Choose France’ campaign with a reception for over 200 leaders of multinational companies at Versailles, aimed at attracting investment in manufact-uring. The president himself received Elon Musk recently, and, for starters, the government has managed to attract two major battery manufacturers (ProLogium; Automotive Cells Co.) and a major pharmaceutical company (Aguettant) to build new factories in France – all part of a programme to create ‘green industries’, but also aiming to make France less dependent on imports for goods deemed to be of strategic importance. So far € 13bn has been committed, resulting in 8,000 new jobs. By 2030, the government is aiming to encourage investment of € 20bn by means of tax credits amounting to between 20 and 40% of the original investment. This would mean 40,000 additional manufacturing jobs and contribute to the government’s declared aim to raise manufacturing’s contribution to GDP to 15% from currently around 10% – with the declared ultimate goal to fund not only France’s quite generous social support programmes, but also its ambitious climate-change initiatives. It seems that at least in France it now has been understood that money has to be earned before it can be spent …

These moves can also be seen as a direct response to the US government’s massive industry subsidy programme, led by the Inflation Reduction Act. In a recent speech, Jake Sullivan, the current US government’s leading strategic thinker, has laid out in great clarity the motives behind this programme – a speech well worth reading.

https://www.whitehouse.gov/briefing-room/speeches-remarks/2023/04/27/remarks-by-national-security-advisor-jake-sullivan-on-renewing-american-economic-leadership-at-the-brookings-institution/

Not to mention the Australian government’s National Reconstruction Fund, aimed at “diversifying and transforming Australia’s industry and economy”. A seven-year AUD 15bn initiative, of which AUD 1bn alone will be used for co-investment in advanced manufacturing initiatives.

And out of Wellington? The usual roaring silence from the leaders of all parties, occasionally punctuated by the mention of agriculture, tourism and international students as the engines that will pull us out of the current ‘technical recession’ and a current account deficit that has increased considerably over the past year with an annual deficit of 8.9 percent of GDP. And a passing reference to Weta and Rocket Lab, if we’re lucky …