During COVID, nations struggled to access essential items including painkillers and PPE. According to Prof. John Manners-Bell, this has been the main reason for re-shoring. In this podcast interview, and as part of our Made in Policies podcast series, John discusses how these policies have been driven by COVID and championed by Italy.
Kirsty Adams (KA): John, what are Made in Policies, and why are they becoming widespread?
Prof. John Manners-Bell (JMB): Made in policies are becoming critical to political and economic policies, and are being implemented by a whole range of countries, not only in the rest of the world, but also in the EU. Italy’s is very well known. Certainly in India, already in China, Turkey and the USA. The real acceleration of this policy came throughout COVID, because we saw global supply chain dependency on countries in far-off remote parts of the world. It showed a real fragility or lack of resilience in terms of supply chains, and the supply of strategic goods.
Drugs such as paracetamol, or ibuprofen, at the heart of the Pandemic, were in short supply in the West. And part of the reason behind that, was an export ban placed on those drugs coming out of India. It had huge supply chain implications. So governments started to look at – on a supply chain by supply chain basis – which supply chains were critical to health organizations or their societies. And that’s really where the main push has come for re-shoring.
Some politicians would like to see certain industrial sectors being rebuilt in parts of the world where manufacturing has been off-shored for the last 20 or 30 years. Some of this is realistic, some of it is unrealistic, but that’s certainly the main push and that’s why these Made in Policies have become so much more important over the last year, backed up by subsidy and protection
KA: And can you share some information John, about the Made in Italy brand, and how Prime Minister Georgia Meloni is developing it?
JMB: Of all European politicians, she’s been seen as the poster child for the Made in brand, or in her case, the Made in Italy brand. On day one, she came in and changed the name of the key commerce department to a Made in Italy Department, which shows how serious she was about it, building on Italy’s already-strong manufacturing sectors, particularly in luxury brands and fashion textiles, but also pushing into the technology sectors.
There are limits to what she can do because Italy is part of the EU. There are laws on how much you can subsidise your own economic sector. But increasingly, what we’re seeing is that that rule book is being torn up. And there’s been far more state subsidy in Europe over the last couple of years than there has been over the last 20. That’s the reality of the situation.
KA: Can you tell us more about the impact of these subsidies?
JMB: Back in 2015, there was just over one hundred billion euros of EU approved state subsidy. Across the whole of Europe by 2021 – so in the middle of the COVID Pandemic – this rose to 334 billion euros.
And in the last 18 months, this has jumped to 733 billion euros of approved state aid. That’s a source of frustration to many people within the EU, which of course has been trying to reduce all these state subsidies because they create an un-level playing field. So it’s not a fair competition, especially for manufacturers, or for some of the smaller members of the EU, who are disadvantaged by, for example, German or French governments which have very deep pockets…
Listen to the full interview below or on your podcast platform of choice
