Tony Cockerill and Peter Johnson INTRODUCTION This book examines the structure, behaviour and performance of some key industries in Europe. It does so because of the importance of these aspects of industrial activity for international competitiveness and the standard of living. It is the purpose of this introductory chapter to place these individual industry studies in the context of the European economy as a whole and the key policy issues that aﬀect EU industries. Section II looks at recent trends and current patterns in EU industry. The third section explores the policy dimension. An important preliminary issue for the analysis of industrial activity is the deﬁnition of an ‘industry’. What should be the underlying rationale for grouping productive units into a single entity? Groupings based on similarities on the supply side – the techniques used, the technical nature of the product, the materials employed, the distribution channels – may not always generate the same boundaries that demand-side considerations – for example, the degree of product complementarity or substitutability – might suggest. Whether supply or demand criteria are applied, there will always be issues of where to draw the line. For example, the use of cross elasticities of demand to identify close substitutes inevitably raises the question of what ‘close’ means. Historically, supply-side factors have played a major role in deﬁning the industries on which most published statistics – including most of those used here – are based, whereas ‘markets’ are usually considered in terms of the demand side. The two deﬁnitions may...
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