Industrial policy is a highly controversial issue. The European Union (EU) justifies its industrial policy on the grounds of common problems across countries, its capacity to coordinate and reduce duplication of efforts, its capacity to control and limit member-state subsidies to industries, and its mandate for foreign trade and competition policy. Technology policy has been relatively successful in certain fields such as telecommunications or traffic control systems. In other fields, such as microelectronics and computers, the results have been mixed. Formulating a coherent industrial policy remains a highly complicated venture because there are a number of conflicts that are difficult to resolve. This article attempts to review the role and the implementation of industrial and innovation policies in the EU. Moreover, it will attempt to examine and analyze the effects of these policies on convergence and cohesion for the European member-states.
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