Driving Competitiveness: An Integrated Industrial Strategy for Sustainable Employment and Growth

This document adopts the DPE's assumption that competition will almost inevitably ensure more efficient and effective service delivery. The principal insight underlying the DTI's industrial strategy is an acknowledgement of the power of market forces - that the market is a force for low prices and extended choice, for innovation and for new entry into the economic arena. Ensuring the introduction of feasible levels of competition into historically state-controlled sectors is thus vital. Like the DPE, the DTI calls for regulation, without specifying its content or assessing whether the state has the capacity to implement it.The DTI's industrial strategy recognises that the market needs to operate under a clear and enforceable set of rules. In its absence, the market runs the risk - indeed the certainty - of capture by the most powerful participants. The DTI sees state ownership as justified only in the case of natural monopolies, that is in industries where the unit cost is lowest when one enterprise meets the entire market demand. However, the DTI argues that technological advances imply that the conventional justification for natural monopolies has fallen away. By extension, natural monopolies should be privatised and regulated.