Lead-analytics

Published on 12/06/2020

Covid-19: an invitation to reset French industrial strategy

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During the frantic rush to lower production costs, numerous companies did not hesitate to offshore French industry to China. The times when Serge Tchuruk, at the time CEO of Alcatel and proponent of the 'fabless', was advocating the ideal of the "company without factories" are yet to be consigned to history. The underlying belief of such convictions is that the added value of the company for shareholders would lay in our brainpower, not in industrial production, which should be dispatched to distant shores where salaries are lowest. With successive offshoring operations, equipment suppliers have become a group without factories... to the verge of disappearance. 
 
The same logic has led us to close our French mask production plants and a certain number of products of basic necessity. The catastrophe of the Covid-19 epidemic underlines the obvious: giving up our factories is a loss, with consequences not only for employment but also for security of supply of essential goods.
 
Is this health crisis the right time to consider the merits of bringing our industry back closer to home? And more, an invitation to cherish our industry, to recognize its essential value?
Are we prepared to counter the argument of Serge Tchuruk by saying: "We want companies with factories!"?
 
France in 2020 is not the country of Alcatel in 2001; another question arises alongside this invitation to relocate industrial production in France: what sort of factories do we want? What industrial structure should we favor to ensure its long-term competitiveness in France?
 

The reversal of a cycle

Beyond France, the crisis has clearly revealed a certain weakness in the global economic mechanism: its dependence on certain regions for procurement reflected in the exponential growth of international and intercontinental trade. 
By paralyzing trade, and in combination with environmental imperatives, Covid-19 has opened our eyes to the fragility of the current global economic architecture. Current global trade continues to target growth, always quantitative. By sweeping away the logic behind the system, the pandemic provides us with the opportunity to create a new global system based on qualitative criteria; quality of life, harmony with the environment, local production, seasonal availability… 
 

Which is the right model for post-crisis production?

With the announcement of the end of the "war", political and economic decision-makers must answer two fundamental questions: How can we reduce our dependency (for certain basic essentials and also for certain resources, such as rare metals)? How can we reduce the abuses of excessive international trade?
 
I am convinced that we must rebalance our economic model by favoring local production wherever we are located on the planet. There are numerous benefits to such an industrial strategy: producing locally reduces the environmental impact, generates employment, re-energizes the regions and offers responsiveness and agility in keeping with the evolution of industry 4.0. It is up to society to decide, but it is feasible as the technical solutions already exist to enable the rebalancing to take place.
 

Towards rational industry 

Industrialists having been preparing the ground for many years now. New technologies and new production processes have been developed. The Covid-19 crisis has revealed their pertinence on a much larger scale. Connected and collaborative smart industry, the expansion of competitive clusters, the development of blockchains, the spectacular advances in new technologies... everything that constitutes the fourth industrial revolution forms the foundation of our industrial strategy of tomorrow. All such innovations share the same objective: to increase the efficiency of industrial processes by optimizing the allocation of productive resources. 
 
Among these technologies, additive manufacturing (more commonly known as 3D printing) meets all the requirements: environmental, with a lower ecological impact and fewer stocks; economic, with a lower risk of price fluctuations and trade bottlenecks in raw materials; social, by creating local jobs. The development of additive manufacturing constitutes a response to the demands of our populations, companies and politicians by limiting our dependence on other countries, by reducing our environmental impact and by encouraging local, flexible and accessible production. 
 
Thanks to additive manufacturing, the companies in our region have been able to respond in just a few days to the urgent procurement demands for protective visors against Covid-19 for our carers, retail workers and those working in food-processing and industrial plants. If we had ordered these visors from China, we would still be waiting for delivery…
 
The crisis therefore calls on us to change our production model. The current turmoil represents an extraordinary opportunity to generate an industrial big bang. It is both an ending and a signal for renewal: the end of a system based on mass overconsumption replaced by smart industry and, more widely, by smart society. We can pare production down to the essentials by getting closer to the "active consumer", who will define the specifications of the product they really need. 
 
I appeal to political decision-makers. How can we support, accelerate and safeguard new forms of technological and innovative production? It is a safe bet that those countries managing to create the conditions ripe for their development will lead the race towards post Covid-19 re-industrialization Thousands of jobs can be created. Not only through additive manufacturing but through other innovations, such as in solar energy: tomorrow, France can become the leader in flexible photovoltaic films and create thousands of jobs. Saving the automotive and aeronautics industries is an absolute necessity. As is generating new forms of industrial production. 
 
The current health crisis reminds us that the economy is cyclical. Growth phases are borne out of techno-economic systems that fall into crisis and re-emerge after a new wave of innovation. Yet there exists a solution to avoid the destructive element of such cycles: come together, combine the strengths of the private sector company with those of the state in order to innovate, bring our essential industries back onshore and create new ones. It is up to entrepreneurs to take the lead down exciting new paths, attracted by the potential of new technologies. It is up to politicians to create the conditions required for a smooth transition that maintains private sector initiative and the physical and psychological safety of our people. And it is lastly up to our citizens to decide on the future they wish to live in.
 
Hubert de Boisredon
CEO of ARMOR