EU Industrial Policy Between Modernization and Transformation

Environmental Innovation and Societal Transitions 38 (2021) 140–152
Contents lists available at ScienceDirect
Environmental Innovation and Societal Transitions

journal homepage: www.elsevier.com/locate/eist
Research article
EU industrial policy: Between modernization and transformation

of the automotive industry
Melanie Pichler a, *, Nora Krenmayr a, Etienne Schneider b, Ulrich Brand b
a
Institute of Social Ecology, University of Natural Resources and Life Sciences, Vienna, Schottenfeldgasse 29, 1070 Vienna, Austria
b
Department of Political Science, University of Vienna, Universitätsstraße 7, 1010 Vienna, Austria
A R T I C L E I N F O A B S T R A C T
Keywords: The transport sector accounts for 27 % of total CO2 emissions in the EU, with almost half of these
Economic growth being attributed to passenger cars and the automotive industry. In order to meet the Paris
Exnovation Agreement 1.5 ◦ C target, these figures call for interventionist policies that go beyond individual
Just transition
consumer choice and transform industrial sectors. The article conceptually elaborates on the ad
Phase-out policies
vancements in transformation and transition studies to analyse the role of industrial policy for
Social-ecological transformation
Austrian automotive supplier industry accelerating social-ecological transformations. The article empirically analyses key characteristics
of EU industrial policy and critically discusses its potential for transforming the automotive
sector, based on a qualitative case study of the Austrian automotive (supplier) industry. Our
analysis suggests that EU industrial policies at most ecologically modernise and at worst actively
conserve the unsustainable structures of the automotive industry. This is because EU automotive
industrial policies (1) defend economic growth and competitiveness, (2) focus narrowly on
innovation (policy) and refuse to disrupt unsustainable industrial pathways as well as (3) promote
ecological modernisation through efficiency instead of absolute emission reductions. The article
concludes with entry points for a transformative industrial policy beyond ecological
modernisation.
1. Introduction
In order to meet the 1.5 ◦ C target set out in the Paris Agreement and to avoid irreversible climate change, the EU has to reach zero
emissions by 2050 (European Commission, 2014a; IPCC, 2018). The recent European Green Deal endorses this ambitious goal (Eu
ropean Commission, 2019a). The transport sector is the single most important contributor to the climate crisis, accounting for 27 % of
CO2 emissions in the EU. While these emissions were declining between 2008 and 2013 due to the economic crisis of 2008/09,
emissions from road transport, aviation and shipping have yearly increased since then.1 Almost half of all the transport-related
emissions come from passenger cars and the automotive industry (European Environment Agency, 2018). At the same time, thou
sands of jobs are directly or indirectly linked to the production of vehicles. In the EU, 13.8 million people, representing 6.1 % of the
total workforce, directly or indirectly work for the automotive industry (European Commission, 2019a).
* Corresponding author.
E-mail address: melanie.pichler@boku.ac.at (M. Pichler).
1
The long-term effects of the COVID19 crisis remain uncertain. The early reactions to the crisis have shown that interventionist policies are
possible, yet, their transformative potential is far from clear and remains to be seen. As we conducted our qualitative material before February 2020,
we cannot make empirically grounded arguments on post-COVID19 transformations.
https://doi.org/10.1016/j.eist.2020.12.002
Received 17 July 2020; Received in revised form 7 December 2020; Accepted 22 December 2020
Available online 15 January 2021
2210-4224/© 2021 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
M. Pichler et al. Environmental Innovation and Societal Transitions 38 (2021) 140–152
The alarming levels of CO2 emissions call for urgent social-ecological transformations in mobility systems. These imply political,
socioeconomic and cultural changes ranging from significant reductions of individual passenger cars, the promotion of public transport
and the respective infrastructure, new mobility services and alternative employment schemes to prevent large-scale job loss (Creutzig
et al., 2015; Fraunhofer IAO, 2018; Geels, 2012). However, despite significant incentives for markets and consumers as well as
increasing political pressure through the VW emissions scandal and protests by Fridays for Future, the traditional automotive industry
has so far resisted transformative change. Strategies towards innovation and technological change at most follow an ecological
modernisation trajectory (Mol et al., 2009) – as exemplified by the electrification of the car fleet or on-demand mobility services
(Kuhnert et al., 2018; McKinsey and Company, 2016) – and at worst defend the improvement of the internal combustion engine (ICE)
and the profitable production of high-emission SUVs. In the EU, electric cars made up 3.1 % of new car registrations (plus 6.3 % hybrid
cars) in the third quarter of 2019 (European Automobile Manufacturers Association, 2019). Initial assessments suggest that the
COVID19 crisis may even consolidate individual car sales rather than spur transformative change towards public transport and shared
mobility (VCÖ, 2020).
Meso-level policies are important for the understanding of stability and change in sustainability transitions more generally and the
automotive industry in particular (Bergek et al., 2014; Busch et al., 2018; Kern, 2012; Mazur et al., 2015). These governance in
struments form an important link between micro-level behavioural choices and investment decisions as well as macro-level structural
transformation trajectories. As part of meso-level governance, industrial policy has experienced a remarkable resurgence in the past
decade (Eder et al., 2018; Rodrik, 2008; Warwick, 2013) but has so far been neglected in transition studies (for exceptions, see, e.g.,
Busch et al., 2018; Giordano, 2015). At the same time, economists have promoted “green industrial policy” (Altenburg and Rodrik,
2017; Lütkenhorst et al., 2014; Rodrik, 2014) or the “green entrepreneurial state” (Mazzucato, 2015) as important elements of sus
tainability transitions. In the last decade, the European Commission has published new industrial strategies almost every second year
(European Commission, 2010, 2012a, 2014b, 2017) and recently, Germany and France joined forces for a European Battery Alliance
(Nienaber, 2019). This revival of different forms of industrial policy in the EU, however, is still contested (Landesmann and Stöllinger,
2020) and research on how industrial policy prevents or accelerates social-ecological transformations is still missing.
In contributing to this ongoing debate, this article’s objective is threefold: Conceptually, we elaborate on the interlinkages of
transformation research and industrial policy. We argue that insights from transition studies and transformation research help to
analyse the potentials and barriers of industrial policy for social-ecological transformations. Rather than solely focusing on phasing-in,
that is, innovation policy, we propose more emphasis on phasing-out of existing and unsustainable technologies and industries.
Empirically, we discuss the contested revival of EU industrial policy and analyse its specific role in transforming the automotive sector,
with a qualitative case study on Austria. We trace the contested evolution of EU industrial policy, carve out three characteristics and
evaluate the transformative potential of this ‘revival’ for the automotive industry. To be sure, the case of the Austrian automotive
(supplier) industry cannot serve as a proxy for the – larger – EU automotive sector. Nevertheless, both the transnational (inter)
dependence of the Austrian automotive industry and the Europeanisation of industrial policy itself justify to take a closer look at
supranational meso-level policies that support or hinder national transitions. Policy-wise, we cursory reflect on characteristics of a
transformative industrial policy that may effectively transform – instead of conserve and modernise – the automotive regime.
Our analysis evolved from a qualitative case study on the Austrian automotive supplier industry. We conducted 27 interviews with
researchers as well as representatives of state ministries, automotive clusters, unions and workers’ councils in leading automotive
(supplier) companies in Austria between September 2018 and January 2020. Two focus groups in November 2019 and January 2020
complemented the interviews. While the research focused on the role of workers and their representatives to push for – or prevent –
change in the automotive sector, the results have shown the crucial importance of meso-level governance like industrial and envi
ronmental policies, particularly on the EU level. In this process, EU policies predefine national corridors and room for manoeuvre. We
use the interview material as well as EU industrial policy documents and strategy papers to substantiate our argument.
The article proceeds as follows: The next section discusses advancements in transformation research that emphasize phase-out
policies and structural reforms to destabilize unsustainable industries. These provide important insights for analysing industrial
policies and are followed by a summary of the historical evolution of industrial policy in Europe and the key features characterising its
revival. Based on a case study of the Austrian automotive (supplier) industry, Section 4 analyses the specific transformation trajectories
that the current industrial policies support in the automotive industry. Based on this analysis, Section 5 derives entry points for a
transformative social-ecological industrial policy beyond ecological modernisation. The article contributes to the renewed interest in
industrial policy in transformation and transition studies, and advances it through an empirical case study and an explicit focus on
environmental and social challenges.
2. Innovation, phase out and industrial policy in transformation research
The complex relationship between stability and change is a core analytical focus of transformation research (Brand, 2016a; Görg
et al., 2017; Köhler et al., 2019, p. 2; Wells and Nieuwenhuis, 2012). In transition studies – one important research strand in trans
formation research – socio-technical regimes (Geels, 2002) are identified as a central concept to account for relatively stable conditions
of certain socio-technical configurations. With regard to mobility, transition researchers have identified a socio-technical automotive
regime that is dominated by the passenger car and individual mobility (Geels, 2005, 2002). Production systems, fuel and road infra
structure, transport systems, markets, user behaviour, regulations and policies, science, research and development as well as cultural
and symbolic connotations stabilise the socio-technical automotive regime (Geels, 2012, 2005; Köhler et al., 2020; Krenmayr and
Wawerda, 2020; Mattioli et al., 2020). Innovation is seen as a key lever for challenging the unsustainable features of the automotive
regime. Nykvist and Whitmarsh (2008) have developed a model of innovation areas to account for gradual changes in the automotive
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sector. The model consists of three ideal-type innovation areas. Innovation area 1 focuses on new technologies, which include both
efficiency improvements of existing technologies as well as new vehicle technologies and alternative drive engines. The extent to
which the current automotive regime will be challenged depends on the extent to which new infrastructures, technological de
velopments and behavioural changes are shaped. Innovation area 2 entails a shift from a product-based to a service-based mobility
system. New forms of mobility like car sharing and carpooling enable a more efficient consumption of resources and energy. Innovation
area 3 describes a new mobility management and more local and greener lifestyles that reduce mobility needs and resource con
sumption. Proposed measures towards slower and active mobility include road tolls, taxes on vehicles and fossil fuels, a new kind of
urban and spatial planning and the development of public transport.
In describing drivers of change, transition studies have focused mainly on niches, pioneers of change and voluntary instruments to
guide transitions (Köhler et al., 2019, p. 9, 2009). Niches are protected spaces that serve as places for radical innovation, or behav
ioural patterns and action that deviate from the existing regime (Köhler et al., 2019). In the mobility sector, such niches include, for
example, cycling/walking mobility lifestyles (Köhler et al., 2020), autonomous driving (Müller and Frenzel, 2020) or Fuel Cell Vehicles
(Köhler et al., 2009). Many transition researchers advocate for strengthening niche innovations rather than exerting political or
economic pressure, since stricter regulations can be introduced more easily if alternatives, such as new technologies or other modes of
transport, are available (Geels, 2012).
In recent years, however, transformation research – including transition studies – has criticised that in times of accelerating climate
crisis and intensifying globalisation (despite recent protectionist economic policies), new technologies, innovation and the scale-up of
niches may not be enough to reach emission reductions, as vested interests, power relations, growth imperatives and incumbent forces
of inertia prevent transformative change (Brand, 2016b; Feola, 2020; Leach et al., 2012; Park et al., 2012; Mattioli et al., 2020).
Therefore, transformative strategies have to actively challenge mature and strong but highly unsustainable technologies, industries
and infrastructures (Alkemade et al., 2011; Foray, 2019; Hausknost and Haas, 2019, p. 12; Heyen et al., 2017; Turnheim and Geels,
2012; Köhler et al., 2019, p. 21). Lütkenhorst et al. (2014) call this feature of transformative change “disrupting old pathways”. Heyen
et al. (2017) introduce “exnovation” – in contrast to innovation – “as the purposive termination of existing (infra)structures, tech
nologies, products and practices” (p. 326). With an explicit focus on policies and governance instruments, Kivimaa and Kern (2016)
propose “policy mixes for the explicit destabilisation of regimes” (p. 207). These include, for example, control policiesto manage the
environmental impacts of the existing regime, structural reforms that target regime rules beyond environmental impacts, or new
governance networks to break up incumbent actor-network structures (Kivimaa and Kern, 2016, pp. 209–210). In a similar vein,
Rosenbloom et al. (2020) call for “sustainability transition policy” that targets both “innovation and decline” (p. 8667). These policy
instruments for destabilization include divestment strategies, removal of fossil fuel subsidies, carbon pricing, or stronger environ
mental standards” (Rosenbloom et al., 2020, p. 8667). With regard to policy design, Weber and Rohracher (2012) show that “policies
for transformative change” should integrate principles of directionality, policy coordination, demand-articulation and reflexivity (see
also, Foray, 2019; Schot and Steinmueller, 2018). Hence, social-ecological transformations require more interventionist policy re
sponses that transcend individual behavioural change and niche innovation in order to change – eventually even phase out – un
sustainable sectors like the highly profitable automotive industry. (Supra)national political institutions are important in such
transformations as they can direct innovation processes, structure decisions on alternative developments pathways and therefore
destabilise the dominant automotive regime (Hausknost and Haas, 2019).
Industrial policy has been an important policy field for structural economic change that has received limited attention in trans
formation research (for exceptions, see Busch et al., 2018; Giordano, 2015; Mazur et al., 2015; Wesseling, 2016). In general terms,
industrial policies are “government policies which aim at affecting the structure of an economy” (Eder et al., 2018, p. 8; see also,
Rodrik, 2008). The literature differentiates between horizontal industrial policy (general framework conditions for the economy, e.g.,
investments in education and basic research) and vertical (or selective) industrial policy (targeted strategies that support specific
activities, sectors or technologies). Furthermore, researchers distinguish between strategic industrial policy (actively promoting spe
cific industries) and reactive or defensive industrial policy (mainly aiming at orderly adjustment and restructuring in the light of
de-industrialisation and the new international division of labour) (Andreoni and Chang, 2016; Stiglitz et al., 2013).
Industrial policy has generally aimed at the creation of favourable conditions for economic growth (Buch-Hansen and Wigger,
2010; Moussa, 2017). This account has been true for classical industrial policy based on top-down investments and subsidies after
World War II through more horizontal, competition-oriented forms focusing on innovation and R&D since the 1980s. The resurgence of
industrial policy, particularly promoted by Rodrik’s (2008) study on Normalising industrial policy, has revolved around how to best
address information failures by markets in developing countries, provide adequate incentives to steer economic activities and avoid
‘government failure’ through a specific institutional design of industrial policy as well as by ‘letting losers go’ instead of ‘picking
winners’ (Kemp and Never, 2017; Rodrik and Hausmann, 2006). In industrialized countries, research and policy has started to interlink
industrial policy with environmental concerns to call for “green industrial policies” (Altenburg and Rodrik, 2017; Giordano, 2015;
Pegels and Lütkenhorst, 2014), a “low carbon industrial strategy” (Busch et al., 2018) or a “green entrepreneurial state” (Mazzucato,
2015). New industrial policy also broadens the policy scope to cover both the production and consumption system in an attempt to
increase legitimacy for transformative change (Pontikakis et al., 2020). Furthermore, a variety of economic policies de facto constitute
industrial policies in the sense that they aim at changing the structure of the economy without being explicitly labelled as such. These
policies may account for implicit industrial policy or general regulatory policy. This holds true for environmental and climate policies
such as specific emission targets.
Whereas these industrial policy approaches take environmental concerns seriously, most of the interventions stay within the
framework of ecological modernisation and green growth (for cautious exceptions, see Lütkenhorst et al., 2014; Pianta and Lucchese,
2020), that is, they expect an increase in GDP with a reduction of emissions and resource use at the same time. Ecological economists
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and degrowth scholars have, however, pointed to the lacking empirical evidence of efficiency and decoupling in reducing absolute
emissions and resource use (Haberl et al., 2020; Hickel and Kallis, 2019). While there is indeed evidence for relative decoupling (i.e.,
GDP increases more than emissions and resource use), there is no evidence that absolute emission reductions are possible with existing
economic growth rates and in the limited time frame of remaining 30 years that are set in the Paris Agreement. As we will argue in the
remaining sections, this also pertains to EU industrial policy and its specific manifestation on the Austrian automotive industry.
3. Paradigm shifts and characteristics of EU industrial policy
In Europe, industrial policy as an instrument for economic (trans)formation dates back to the post-WWII period (Buch-Hansen and
Wigger, 2010). Back then, industrial policy was mainly directed towards selective interventions to build up markets, eliminate
intra-European market barriers and protect specific industries from international competition. Both the individual European states and
the predecessor institutions of the EU (e.g., the European Coal and Steel Community in 1951) targeted the European industry. From
early on, the French industrial policy was directed towards sectoral planning and the support of ‘national champions’ whereas Ger
many focused on competition policy and the horizontal creation of more general framework conditions. The joint ‘threat’ from US
companies on the world market encouraged Europe to tolerate (if not openly encourage) the concentration of strategic industries and
vertical industrial policy in the member states. In a famous example, European governments in the 1960s decided to support the
strategic development of the large transport aircraft Airbus to compete with Boeing in the US (Klepper, 1994). From the 1980s,
however, the European Commission has started to actively enforce EU competition law, thereby significantly curtailing policy space
for vertical industrial policy on the national level, particularly through state aid rules (Buch-Hansen and Wigger, 2010; Landesmann
and Stöllinger, 2020; Pianta et al., 2016, p. 18). Instead of interventionist industrial policy, the Maastricht treaty in 1992 defined the
role of the EU to create “a system of open and competitive markets” (Art. 130 to foster the competitiveness of the European industry)
(Ambroziak, 2014). In the course of the following European integration, horizontal mechanisms (e.g., investments in education and
innovation) have formed the basic pillars of industrial policy to increase competition and competitiveness (Aiginger and Sieber, 2009,
p. 12; Moussa, 2017). Likewise, the Lisbon strategy increasingly geared EU cohesion policy and structural funds that have long relied
on industrial policy instruments towards innovation and competitiveness (Becker, 2009; Landesmann and Stöllinger, 2020). Thus,
whereas EU institutions effectively banned industrial policy from official discourse and policy in the neoliberal era, they have
selectively always deployed implicit industrial policy, especially in the domains of defence or agriculture and through European
regional policies (Foray, 2019, pp. 1388–1389).
After three decades of neoliberal reform, the 2008 financial and economic crisis has triggered a revival of industrial policy, both in
political debates and actual policy interventions (Eder et al., 2018; Rodrik, 2008; Wigger, 2019). In 2010, industrial policy became one
of the seven flagship initiatives of the “Europe 2020” strategy. The European Commission (2010) published a report on “An Integrated
Industrial Policy for the Globalisation Era”, which was two years later followed by a strategy for “A Stronger European Industry for
Growth and Economic Recovery” (European Commission, 2012a). Since then, the renewed interest in industrial policy has resulted in
several national and EU strategy papers (Bundesministerium für Wirtschaft und Energie, 2019a; European Commission, 2014b, 2017,
2020a), supplemented by a myriad of communications and initiatives by the EU Commission. In the following, we carve out three
characteristics of a revived EU industrial policy and trace their contested evolution.
Economic growth and competitiveness through European champions
The promotion of economic growth remains the overarching goal of EU industrial policy, although the focus tends to shift from
‘competition-only’ in the Single Market to competitiveness at the world market. Insofar, current debates reactivate a long-standing
conflict between neomercantilist and neoliberal strategies over European market integration (Van Apeldoorn, 2003, p. 117).
Whereas neomercantilists support state interventions to increase competitiveness at the world market (e.g., through the support of
European champions), neoliberals refuse such interventions and frame competition in the Single Market as the best strategy to foster
competitiveness at the world market. Following three decades of neoliberal hegemony, the European Commission and dominant
member states like Germany and France have started to push for more active industrial policy interventions to account for the
increasing competition from China on the world market. Already in 2010, the European Commission (2010) started to advocate for
“bringing together a horizontal basis and sectoral application” (p. 4) which points towards more selective industrial policy in
terventions. The establishment of the so-called “Important Projects of Common European Interest” (IPCEI), for which competition and
state aid rules are suspended, are a crucial step in this direction. Along the same lines, the European Commission has recently put
forward new exemptions from state aid where national funding and EU programmes are combined (European Commission, 2020b).
However, the revival towards more active interventions is still contested. For example, political tensions between the European
Commission (and especially the DG Competition) and member states, namely France and Germany, have recently culminated in the
controversy around the Siemens-Alstom merger which was ultimately prohibited (European Commission, 2019b). While the DG
Competition seeks to prevent concentration processes that further compromise competition in the Single Market, the governments of
Germany and France have joined forces in arguing that competitiveness on the world market requires large corporations in strategic
areas that can exert a market-dominant role.2 Consequently, Germany and France are currently exploring a revision of EU competition
2
This joint strategy between France and Germany has become possible due to a considerable shift in the German position towards more active
industrial policy which has come to the fore in 2019 (Zettelmeyer, 2019).
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law to allow for the active creation of ‘European champions’ (Bundesministerium für Wirtschaft und Energie, 2019b). This joint effort
shows a shift in power relations towards more active industrial policy.3
Focus on innovation and reluctance to disrupt unsustainable industrial pathways
Despite these controversies, EU competition rules, in particular its restrictions for state aid, continue to constrain policy space for
active industrial policy. State aid for research and innovation forms one of the few exceptions from the strict competition rule
framework (European Commission, 2014c). Therefore, targeted interventions continue to focus predominantly on innovations, as
opposed to strategic financial investments which had characterised industrial policy after WWII (Aiginger and Sieber, 2009, p. 17). An
investigation of actual amounts spent on industrial policy in the EU shows that support for research & development, innovation and
technology still account for the bulk of EU industrial policy, with Horizon 2020 as the main policy vehicle (Landesmann and Stöllinger,
2020). The most recent EU industrial strategy reemphasises this orientation towards innovation, proclaiming it “to be an industrial
innovation strategy at heart” (European Commission, 2020a, p. 10).
Innovation policy is less horizontal than often claimed as any support for specific innovations favours selective industrial sectors
over others. Nevertheless, broad-based innovation policy remains weak with regard to transforming powerful and profitable – yet
unsustainable – industries as it refuses to actively discriminate these sectors. Whereas industrial strategies acknowledge that “certain
sectors will have to make a bigger and more transformative change than most “(European Commission, 2020a, p. 7), actual in
terventions refuse to actively disrupt unsustainable industrial pathways. Instead, they focus on additional innovative investments “in
the industry of the future” (European Commission, 2017, p. 11) that complement and modernise rather than disrupt and transform
unsustainable sectors like the automotive industry. In its most recent industrial strategy, the European Commission (2020a) not only
reaffirms this position, but even sets out the goal to “ensure that EU mobility industries maintain their global technological leadership”
(p. 8) through research and innovation as well as through rolling out necessary infrastructures.
Ecological modernisation through efficiency
Compared to post-WWII industrial policy, environmental concerns feature prominently in current strategies. In doing so, the
integration of environmental goals into industrial policy focuses mainly on efficiency and shifts towards low-emission technologies
that boost competitiveness and economic growth. Along these lines, the new industrial strategy aims for the EU to “become more
competitive as [industry] becomes greener and more circular” as well as to “create lead markets in clean technologies and ensure our
industry is a global frontrunner” (European Commission, 2020a, p. 3). With “putting [both] competitiveness and sustainability at
centre stage” (European Commission, 2010), the EU industrial policy, however, covers up potential conflicts between the goal of
sustainability on the one hand and competitiveness and economic growth on the other hand. Such conflicts may arise where inter
nationally competitive industries that drive GDP growth (e.g., the production of high-end ICE cars) need to be scaled down to meet
emission targets. This conflict is also visible in the introduction of stricter emission standards in EU industrial and environmental
policies. Germany, for example, has actively opposed a tightening of the emission standards and pleaded for excluding the automotive
industry from the European Green Deal (Tatje, 2020).
In sum, the revival of industrial policy in the EU is characterised by an orientation towards green growth and competitiveness that
targets the ecological modernisation of the EU industry but fails to promote structural industrial transformations required to achieve
the Paris Agreement. The proposals to loosen EU competition rules to join forces for European champions as well as the introduction of
IPCEIs aim to promote strategic green technologies. The dominance of innovation further emphasises this focus on addition to rather
than disruption of existing unsustainable industries.
4. Industrial policy implications and transition trajectories for the Austrian automotive industry
Due to its wider economic and industrial importance and the sales reductions in the course of the 2008 financial crisis, the
automotive industry has played a major role for the revival of EU industrial policy. In 2012, the European Commission (2012b)
presented “CARS 2020: Action Plan for a competitive and sustainable automotive industry in Europe” as “the first concrete example of
the application of our updated vision for industrial policy in a sectoral setting, i.e. the automotive industry” (p. 4). Based on the
evolution of EU industrial policy and its characteristics, in this section we discuss the implications of EU industrial policy on the
Austrian automotive industry and analyse the transition trajectories that result from its specific setup. We complement the document
analysis with illustrations from our interviews with automotive clusters and workers as well as state representatives and researchers in
Austria. In the course of these interviews, the transnational interdependence of the automotive industry as well as the – consistently
brought up – impulse from EU regulations led us to take a closer look at EU policy drivers in the automotive sector and, eventually, at
the specific role and prospects of industrial policy interventions. Before turning to these, we start the next section with a synopsis of the
3
To be sure, European merger control has in part already facilitated concentration processes and the creation of ‘European champions’ by
reducing legal complexity and effectively abolishing member states’ veto power in merger control (Buch-Hansen and Wigger, 2010, p. 36).
Nonetheless, the current debate shows a new quality and an open conflict over whether concentration processes and targeted investments for
specific sectors and technologies should be promoted by effectively weakening EU competition law and the European Commission’s regulatory
authority.
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structural features of the Austrian automotive industry that influence its transformative potential.
We characterise the Austrian automotive industry around four interconnected features (Wissen et al., 2020). First, the Austrian
automotive industry is a growth sector with high economic significance. In the last 20 years, the production volume tripled while total
industrial production ‘only’ doubled.4 Since 2000, employment increased at 55 % (with only 2 % in total industrial production). The
sector accounts for 8 % of industrial production and employs more than 10 % of industrial employees, that is, 76,700 people. Second,
the high dependence on the ICE technology makes the industry strongly rooted in the automotive regime. From 15 billion euros of total
revenues, ICE and gears accounted for four billion euros in 2017. Third, Austria mainly serves as an automotive supplier industry.
Worldwide, Original Equipment Manufacturers (OEMs) dominate globalised production networks that – due to their strategic position
in the market – can control and play off suppliers and their workforce. In Austria, the Austro-Canadian group Magna is the only
company that produces complete cars, but only for foreign OEMs, which makes the corporation and its business model an exceptional
case. Most of the other companies are either suppliers for OEMs (e.g., BMW, PSA) or are subsidiaries of large transnational supplier
corporations (e.g. Bosch, ZKW) with headquarters outside of Austria. Thus, the Austrian automotive industry is, forth, highly expor
t-oriented and externally dependent, especially on the German automotive industry. With an export quota of almost 90 %, more than a
third of the exports are directed towards Germany. BMW, MAN (VW) or Opel5 have important branches in Austria that produce and
develop components for the German headquarters, mostly ICE. These branches implement detailed production plans but refrain from
strategic decisions in Austria. Almost 70 % of the employees in the automotive supplier industry work for subsidiaries of transnational
corporations. Despite these external dependencies, Austria is different from other dependent European automotive regions (e.g., in
Central Europe or Eastern Germany) due to the high R&D quota. With 3.5 % of the operation revenues, the Austrian automotive
industry ranks fourth in the EU in this regard. More than 70 % of the supplier companies have local R&D services (PwC 2018). Through
investments in R&D, the family business AVL in Styria, for example, has become a leading developer of electric and hybrid drive
systems. Oinas et al. (2018) characterise such industries as “intermediate nodes”. Whereas they have strong and innovative companies
and a qualified workforce, they have limited decision making power to structure new industrial pathways as they depend on de
velopments and decisions in “core nodes”.
4.1. Selective interventions in the course of the European Battery Alliance
In general, EU industrial policy’s horizontal focus on competition and growth is reflected in the firm economic competition in the
automotive industry that impedes targeted transformation. Companies are set in constant competition to each other. As an example for
a range of similar statements in our interviews, a workers’ council of an automotive supplier company confirms the competitive setup –
even within their own corporate group – that prevent more coordinated change.
Every company that was bought by [our parent company] works autonomous. Of course bound by the parent company but […]
we are competitors. They do this on purpose. […] It’s not that this was reasonably coordinated but they rather setup
competition. (military vehicles producer, 19 Mar 2019)
In an industrial setup that is highly dependent and profitably specialised on the ICE, horizontal and non-discriminatory industrial
policies tend to deepen the status quo and benefit the improvement of the ICE as “the producer [just] earns more money with a mature
combustion engine than with e-mobility” (Mobility Cluster ACstyria, 6 Dec 2018). Hence, Austrian administrators confirm that na
tional authorities would rely on supranational policy directions:
Local authorities hesitate to invest in a certain technology too early when they don’t know where the journey is going. Do you
have a journey where you have all technologies broadly diversified and applied in the future? Or do you have, similar to a
Darwinian evolutionary process, one technology that replaces all the others.” (Austrian Ministry for Transport, Innovation and
Technology, 4 Dec 2018)
The European Battery Alliance, launched by the European Commission in the course of the IPCEIs in 2017, represents a cautious
shift from this horizontal approach towards more selective industrial policy interventions. The Battery Alliance is a strategic alliance,
which includes companies, fourteen member states, the European Commission and the European Investment Bank. The Alliance aims
to establish a complete domestic battery value chain in the EU (Bundesministerium für Wirtschaft und Energie, 2019b; European
Commission, 2018). A Fact Sheet from 2018 reads: “The EU has invested a lot of money to support research and innovation in batteries.
Now it is time to capitalize on these investments and create the partnerships and factories to produce the batteries Europe needs”
(European Commission, 2018). In 2019, the European Commission approved billion-euro subsidies from seven EU countries, including
France and Germany, to drive innovation in the battery value chain (European Commission, 2019c). Given the scale of the joint in
vestments, observers have already compared the efforts with the creation of Airbus (Morgan, 2019). While competition remains a
central policy feature, the Alliance exemplifies a shift from internal competition to external competitiveness. In other words, the Alliance
aims to build a strategic cartel of companies that distorts competition within the EU but is more likely to react to the increasing global
competition, especially from East Asia – which is particularly pronounced in the field of electromobility (European Commission,
2019c). As a state representative puts it:
4
The long-term implications of the slump in sales due to the COVID19 crisis are yet to be seen, yet, the massive state interventions point to a
recovery of the branch rather than a transformative reset.
5
The French PSA group absorbed Opel only in 2017.
145
Asian producers [of electric vehicles] entered a niche […] because there was less competition. They didn’t have to compete with
the mature automotive companies from the US and Europe. They had a protected life for a certain period of time. And this
pressure from outside of Europe – new and young companies that have grown exponentially and have a huge domestic market
[in Asia] – is now slowly pushing into Europe and the US. (Austrian Ministry for Transport, Innovation and Technology, 4 Dec
2018)
4.2. Addition to rather than phase-out of the ICE
While the European Battery Alliance may constitute a more active policy intervention to promote the production of electric ve
hicles, industrial policy strategies still refrain from directly targeting and disrupting the traditional automotive industry with a strong
focus on the ICE and the production of ‘big, heavy and profitable’ cars. Although there are emergent statements on the phasing out of
the ICE by 2030–2050, neither the most recent industrial strategy (European Commission, 2020a) nor the announcements for the
Comprehensive Strategy for Sustainable and Smart Mobility (European Parliament, 2020) – that is expected for the end of 2020 –
contain signals in this direction. Furthermore, while the European Green Deal explicitly targets the phase out of the coal industry
(European Commission, 2019a, p. 6), there is no clear target for the phase out of the ICE. In the European Battery Alliance, the leading
German and French car manufacturers Volkswagen, Daimler, BMW, Renault and PSA/Opel are expected to drive the sustainability
transition (Manager Magazin 2019). Where industrial policy interventions incentivise research and innovation, the concrete decisions
on the “how” and the “what” of industrial production are left to these private and incumbent actors (Gaddi and Garbellini, 2019;
Hildermeier and Villareal, 2011). Industrial policy interventions, thus, do not provide for the “exnovation” (Heyen et al., 2017) of the
ICE but largely support electric cars (and mobility as a service) as an addition to the ICE. A representative of one of the automotive
clusters in Austria confirms this strategy. Instead of an exnovation, he indeed expects the demand for ICE to rise:
We are at about 100 million new passenger car registrations [per year worldwide]. This number will rise to 130 million in the
next decades. That means, there gonna be a larger share of electric vehicles, also hydrogen, but the demand for combustion
engines will nevertheless rise. (Mobility Cluster ACstyria, 6 Dec 2018)
A labour representative confirms this addition and incremental change that also relates to the employment significance of the
industry:
This [alternative drive systems] is the goal; that’s written everywhere. And at the same time, you still protect the automotive
industry and in part you still support it […]. Nobody really dares, also because there are a lot of jobs involved when this happens
too fast. […] The company would be dead when you kill the most important pillar [the ICE]. […] So it’s about improvement of
the conventional. (Austrian Chamber of Labour, 19 Feb 2019)
Hence, politicians refrain from disruptive pathways as long as there are no transition plans for the workforce from EU policies and
as long as there are no coordinated efforts to account for the competitive loss of the companies. As ICE and gears account for almost a
third of annual revenues, the Austrian automotive industry heads towards an additional support of electric vehicles, whereas the phase-
out of the ICE and the transformation of mobility services away from passenger cars would challenge core economic interests. As long
as such industrial policy interventions do not directly target these unsustainable industrial pathways, companies have few incentives to
change this direction.
4.3. Ecological modernisation through vehicle fleet emission standards
Sustainability is a major justification of the revived industrial policy (Altenburg and Rodrik, 2017). Despite this commitment in the
industrial policy papers, however, the concrete instruments tend to prioritise „jobs and the long-term competitiveness of industrial
sites” whereas environmental concerns remain a marginal issue (Austrian Chamber of Labour, 19 Feb 2019). Thus, and as a result of
missing phase-out policies for the ICE, the most important incentive for the ecological modernisation of the EU automotive industry
comes from a policy element that is not directly linked to industrial policy but has important implications for the automotive industry:
the EU vehicle fleet emission standards. We frame this environmental regulation as implicit industrial policy as it may strongly affect
the structure of the economy but is not seen as industrial policy in the traditional sense. The new Regulation (EU) 2019/631, replacing
past regulations from 2009 and 2011, was subject to intense negotiations and lobbying, and will be effective from 2020. On average,
European automotive manufacturers have to keep CO2 emissions from new passenger cars (and light commercial vehicles) within 95 g
CO2/km (and 147 g CO2/km respectively). From 2025 and 2030 onwards, the average CO2 emissions of new passenger cars must be
reduced by 15 % and 37.5 % compared to 2021 levels. To reach the target, flexible mixes in the car fleet instead of absolute limits for
individual cars are possible. That is, the more low- and zero-emission vehicles a company sells, the more CO2-intensive cars it can sell at
the same time: “If they sell 5 million vehicles, they have to sell 2.5 million electric vehicles with 0 g and then they can sell 2.5 million
big SUVs” (Austrian Ministry for Transport, Innovation and Technology, 2018). In addition to the average number, the regulation
grants other flexible mechanisms. Traditional CO2-intensive car manufacturers may form pooling arrangements with low-emission
vehicle manufacturers to meet the emission savings more easily (Article 6). Despite the introduction of penalty payments for excess
emissions (Article 8), these flexible mechanisms allow manufacturers to reach emission savings without structural and too abrupt
changes in their business models.
According to unisonous statements from the interviews, the fleet emission standards are the single most important reason for the
production of electric vehicles: “We work on it because there are ever stricter laws” (leading automotive specialist, 5 Jun 2019). Hence,
the standards support a gradual modernisation of the vehicle fleet but do not systematically challenge the automotive regime. This is
146
because the regulation focuses on flexible mechanisms (average emissions) instead of absolute reduction (maximum emissions). The
Austrian example illustrates the case. In 2018, Austria presented the “#mission2030. The Austrian Climate and Energy Strategy” as a
contribution to the EU Policy Framework for Climate and Energy in the Period from 2020 to 2030 (COM/2014/015). For the transport
sector, and in line with the Paris Agreement, the Strategy sets an emission reduction of about 7.2 million tons of CO2 (Federal Ministry
for Sustainability and Tourism and Federal Ministry for Transport, Innovation and Technology, 2018, p. 21). Based on these accounts,
the Environment Agency Austria calculated that emission savings from the current EU vehicle fleet emission standards account for
0.7–1.2 million tons by 2030 (Umweltbundesamt, 2019, p. 21): “The limits bring one million, so we need 7 million more” (Austrian
Ministry for Transport, Innovation and Technology, 4 Dec 2018). Hence, the current developments clearly show that industrial and
environmental policies that focus on efficiency alone with not suffice to reach current climate targets by 2030, let alone decarbon
isation by 2050.
4.4. Transition trajectories for the automotive industry
The case study of the Austrian automotive supplier industry shows that EU industrial policy promotes technological innovation in
order to increase external competitiveness (especially with regard to China) and boost economic growth rather than social and
environmental goals to sustainably transform the automotive sector. Recent joint efforts to establish a European Battery Alliance will
support an increase in electric vehicles. Due to the vested interests and economic significance of traditional automotive companies,
however, these policies refrain from actively disrupting – and phasing out – the highly productive and profitable ICE path. The vehicle
fleet emission standards represent the most important “control policy” instrument (Kivimaa and Kern, 2016, p. 209) that drives the
ecological modernisation of the European car fleet through efficiency-oriented targets. The flexible mechanisms – in the form of
average emission standards – are, however, insufficient to radically reduce emissions by 2030 and decarbonise the mobility sector by
2050. More radical efforts to generally reduce individual passenger cars and shift mobility patterns towards non-motorised and public
transport – compatible with climate policy goals – are absent from both industrial and mobility-related environmental policies. Thus,
environmental concerns have indeed gained prominence in EU industrial policy discourse and in the recent European Green Deal but
they are translated into industrial strategies that align with competitiveness and economic growth. Whereas policy makers can agree
on the additional support of electric vehicles, the phase-out of the ICE and the transformation of mobility services away from passenger
cars would challenge core economic interests in the EU and would indeed threaten many jobs. Politicians thus refrain from more
“structural reforms” (Kivimaa and Kern, 2016, p. 209) to destabilize the automotive regime as long as there are no coordinated efforts
to account for the competitive loss of the companies and no transition plans for the workforce from EU policies.
Following the three innovation areas introduced by Nykvist and Whitmarsh (2008) more than a decade ago, the current transition
trajectories are still located at innovation area 1, comprising new vehicle technologies and alternative drive engines. While they
identify new infrastructures, technological development and behavioural change to shape transitions, we argue that the analysis of
industrial policy helps to explain the stability and path dependency of the automotive regime. More generally, these meso-level
policies indeed “help to explain the conditions for the reproduction of existing capitalist socio-technical regimes and the possibil
ities for, and barriers to their transition to sustainable configurations” (Feola, 2020, p. 247).
Current EU industrial policies at best support the ecological modernisation of the European car fleet and at worst contribute to
reproduce the unsustainable structure of the automotive sector. At the same time, meso-level policies may also function as an entry
point for more radical social-ecological transformations. Without such overarching regulations that provide strategic guidance for
phasing out unsustainable industrial pathways, technological lock-ins impede transformative change. This is all the more important for
the ICE technology that remains highly profitable and is powerfully entangled with economic interests. These meso-level and su
pranational guidance is also all the more important for countries like Austria that have a strong automotive industry but rely heavily on
developments and decisions elsewhere.
5. Entry points for a transformative social-ecological industrial policy
Based on the analysis so far, insights from our interviews and selected literature, this section cursory reflects on entry points for a
transformative social-ecological industrial policy, that is, an industrial policy that takes environmental and social challenges seriously
and goes beyond the primacy on competitiveness, innovation and economic growth.6 We identify some – preliminary – characteristics
of a social-ecological industrial policy that may effectively transform instead of conserve and modernise unsustainable trajectories in
the automotive sector and briefly discuss conflicts and dialectics that may challenge the stability of the automotive regime. In line with
our conceptual assumptions rooted in transformation research, these characteristics align to policy mixes for destabilizing the auto
motive regime.
5.1. Active industrial policy beyond competitiveness and economic growth
Against the trend of reviving industrial policy for the sake of competitiveness and economic growth, transformative industrial
6
These suggestions are not a coherent outcome of our empirical research (since the research question was different) and we are aware that radical
social-ecological transformations are currently not on the political agenda. Critical research can, however, identify key (policy) components and
strategic visions for such transformations that need further elaboration and research.
147
policy has to encourage coordinated (policy) collaboration in order to enable political decisions and economic investments for future
mobility that go beyond efficiency gains and ecological modernisation.7 Such cooperative efforts may not only be normatively
desirable from a social-ecological transformation point of view, but might ultimately become necessary to avoid an unmanaged and
disruptive decline of the automotive industry (Fasse, 2019). Importantly, these efforts have to go beyond the individual transport
system and integrate the public transport sector as an important pillar for an alternative mobility regime. In May 2009, for example,
environmentalists, citizen groups, researchers and union representatives from all over Europe met in Germany to discuss plans for a
sustainable transportation system. They issued the Cologne Declaration against rail privatisation and put forward “RailEurope2025”, a
concrete plan to transform European transport systems in 15 years in order to cut their CO2-emissions by 75 per cent” (Henriksson,
2013, p. 83). Altering ownership models towards public ownership – as discussed during the huge state aid and bail-out programmes in
the course of COVID-19 – may be an important lever to steer structural reforms in the automotive regime (Mazzucato and Andreoni,
2020).
Obviously, such a transformation implies conflict, especially when incumbent actors and companies are economically affected
(Andreoni and Chang, 2016, p. 28; Heyen et al., 2017, p. 328; Raza et al., 2016). But these conflicts may serve as entry points to
publicly negotiate about the terms and conditions of these transformations. As an interview partner put it: “We could have more
courage. […] And the lobbies […] should move away from saying no, to saying yes, but I need this and that” (Austrian Ministry for
Transport, Innovation and Technology, 2018). Critical analysis needs to ask which stakeholders and potential beneficiaries – and their
respective power resources – stand behind certain industrial policies, in what way are they able to influence or hinder the formulation
and implementation of concrete policy proposals and what their respective social and environmental implications are (Raza et al.,
2016).
5.2. Absolute emission caps and the just phase-out of unsustainable industries
As the discussion of current transition trajectories for the automotive industry has shown, the integration of industrial policy and
environmental regulation through control policies is indispensable. Transformative governance may therefore include the disruption
of unsustainable industries and their respective technologies and infrastructures (e.g., ICE and private cars) through democratically
negotiated phase-out or exnovation policies. Instead of relative efficiency gains, such instruments may be able to regulate absolute
emission caps. For the automotive industry, these may include sales prohibitions for high-emission cars and the eventual ban of ICE
cars but also driving bans for cities (Brand and Anable, 2019; Creutzig et al., 2011).
Historical experiences, for example, the coal phase out in the UK, show that such structural transformations often have detrimental
effects for workers and communities (Johnstone and Hielscher, 2017). Phase-out policies, therefore, require regional, national and
supranational strategies to prevent for large-scale job loss and deal with the destructive ‘jobs-versus-environment dilemma’ (Barca,
2019; Brand and Niedermoser, 2019; Räthzel and Uzzell, 2011; Wissen, 2019). Green New Deal and Just Transition frameworks have
introduced important proposals in this direction, for example, through suggesting a job guarantee for workers that are currently
dependent on fossil fuel industries. In the course of such a just transition programme, public investments would pay for “(1) income,
retraining, and relocation support for workers facing retrenchments; (2) guaranteeing the pensions for workers in the affected in
dustries; and (3) mounting effective transition programs for what are now fossil-fuel-dependent communities” (Pollin and Callaci,
2019, p. 93). Additional instruments may, for example, include a redistribution of work through worktime reduction (King and Van
Den Bergh, 2017). As important components of a social-ecological industrial policy framework, such guarantees and restructuring can
raise broader support for phase out policies and establish transformative coalitions between environmental movements and workers
(Rosemberg, 2010).
5.3. Democratic participation and engagement of workers
In order to further extend the inclusiveness and legitimacy of industrial transformation (Raza et al., 2016), industrial policy may
support new forms of workers’ participation and community involvement. This includes workers in the respective companies but also
people that are negatively affected by industrial production (e.g., through pollution, noise, other hazard) (Barca and Leonardi, 2018;
Bierbaum, 2011; Schumann, 2011). Overall, such participatory processes guarantee that transformations – and respective industrial
policies – move from ‘technology-driven’ towards ‘society-driven’ processes that include deliberative and conflict-driven decisions on
future industrial pathways (Hausknost and Haas, 2019; Heyen et al., 2017; Pichler et al., 2018). Regional transformation councils that
include workers and unions, environmentalists, politicians and citizens may serve as nodal points to guide industrial conversion
(Blöcker et al., 2020, p. 13;46). In learning from current lock-ins, these forms of cooperation have to go beyond consortia of existing
companies to break up incumbent actor-network structures and unfold transformative potential (Kivimaa and Kern, 2016, p. 2010).
Furthermore, the participation of workers in transforming industries incorporates their comprehensive expertise in production pro
cesses. This knowledge helps to reduce the risks of information failures and political capture that have been identified as major
challenges of selective industrial policy (Haley, 2017; Rodrik and Hausmann, 2006).
As our research shows, automotive companies access proposals for change from employees mainly when they improve existing
products and processes but wary from involvement in more transformative decisions. This tendency has also been visible in the well-
7
Under conditions of capitalist competition, efficiency gains tend to result in lower prices and – consequently – the consumption of bigger or even
more cars, or the ability to spend the saved money on other products (e.g., an additional electric car) (Santarius, 2016).
148
known strategies to improve quality and productivity through the Toyota Production System or “job enrichment” at Volvo (Gibson,
1973; Hampson, 1999). Our interviews show that although employees tend to be more concerned with immediate working time and
wage arrangements, they occasionally do come up with more transformative ideas that are most often rejected with regard to
competitiveness. Alleviating these pressures through active industrial policy interventions could provide deliberative space for
transformations from below. As a workers’ council in one of the major supplier industries told us: “There is an overall intelligence that
the people [workers] always make the best out of it. How you proverbially say, they make butter out of shit” (automotive supplier for a
German OEM, May 2019). More specifically, employees in a military vehicle company even told us about their ideas to produce
firefighting vehicles that could be used to extinguish forest fires – “but no one was ever interested in that” (military vehicles producer,
19 Mar 2019). Proposals for alternative products are often inspired by a broader workers’ movements, proposing the conversion of
military production in the course of the Cold War. In the 1970s, for example, workers at Lucas Aerospace in the UK developed the Lucas
Aerospace Shop Steward Plan to propose alternatives to military production. Although the Labour Government eventually dismissed
the plan, it still constitutes one of the most famous examples for workers’ engagement in transformation processes (Mc Loughlin,
2017). Such proposals for alternative products may form an entry point for broadly accepted industrial transformations that benefit
societal needs. The preparation and strategic intervention of union and worker representatives in such purposive change would be a
prerequisite and also a shift in their mandate. Industrial policy could promote this by making public financial support conditional upon
extending workers’ participation (Eder and Schneider, 2018, p. 122).
6. Conclusion
In this article, we analysed the specific role of industrial policy for sustainably transforming the automotive regime. We showed
that meso-level governance like industrial policy are neglected but highly relevant components that help to explain barriers and
potentials for transformative change. Advancements in transformation research, especially with regard to the destabilization of un
sustainable regimes, have directed the analysis. We traced the history of EU industrial policy since the post-WWII period and carved
out characteristics of a revived industrial policy in the aftermath of the 2008/09 economic crisis. We identified (1) economic growth
and competitiveness, (2) a disproportionate reliance on innovation rather than exnovation policy as well as (3) an ecological
modernisation through efficiency and low-emission technologies as basic pillars that characterise current industrial policy in
terventions. We illustrated these characteristics with regard to the Austrian automotive supplier industry. The case study of the
Austrian automotive supplier industry shows that EU industrial policy promotes technological innovation in order to increase external
competitiveness (especially towards China) and boost economic growth rather than social and environmental goals to sustainably
transform the automotive sector. Recent joint efforts to establish a European Battery Alliance will support an increase in electric
vehicles. Due to the vested interests and economic significance of traditional automotive companies, however, these policies refrain
from more structural reforms that actively disrupt – and phase out – the highly productive and profitable ICE path. The vehicle fleet
emission standards represent the most important control policy instrument that drives the ecological modernisation of the European
car fleet through efficiency-oriented targets. The flexible mechanisms – in the form of average emission standards – are, however,
insufficient to radically reduce emissions by 2030 and decarbonise the mobility sector by 2050. At best, they aim for an ecological
modernisation of the European car fleet but fails to incentivise more transformative change in the automotive sector.
In the final section of the article, we therefore discussed some tentative entry points for a transformative industrial policy that takes
environmental and social concerns seriously and overcomes the primacy of competitiveness and economic growth. These include
active and coordinated industrial policy interventions that introduce absolute emission caps and correspondingly phase out the ICE
technology. Importantly, however, industrial policy enables the integration of workers’ perspectives and rights to increase legitimacy
for transformation and develop alternative income and safety nets. Such radical transformations are currently not on the political
agenda and need both research and political mobilisation to gain momentum.
Declaration of Competing Interest
The authors report no declarations of interest.
Acknowledgements
This research was funded by the Austrian Climate Research Program (ACRP) under grant number GZ B769968. We thank Markus
Wissen, Danyal Maneka and Heinz Högelsberger for assistance during the research process and valuable comments on an earlier
version of the paper. We are also grateful to three anonymous reviewers for their constructive feedback.
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EU Industrial Policy Between Modernization and Transformation

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Environmental Innovation and Societal Transitions 38 (2021) 140–152

Contents lists available at ScienceDirect

Environmental Innovation and Societal Transitions

EU industrial policy: Between modernization and transformation

2. Innovation, phase out and industrial policy in transformation research

3. Paradigm shifts and characteristics of EU industrial policy

Economic growth and competitiveness through European champions

Focus on innovation and reluctance to disrupt unsustainable industrial pathways

Ecological modernisation through efficiency

4.1. Selective interventions in the course of the European Battery Alliance

4.2. Addition to rather than phase-out of the ICE

4.3. Ecological modernisation through vehicle fleet emission standards

4.4. Transition trajectories for the automotive industry

5. Entry points for a transformative social-ecological industrial policy

5.1. Active industrial policy beyond competitiveness and economic growth

5.3. Democratic participation and engagement of workers

Declaration of Competing Interest

The authors report no declarations of interest.

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