The Competition Authority emphasises the importance of effective competition in the formulation of industrial policy.

The Competition Authority has reported Review on the government's plans for an employment policy for the next ten years. The review places special emphasis on the fact that effective competition is a fundamental prerequisite for a successful employment policy that promotes value creation, innovation, productivity and sustainable economic growth.

The Competition Authority points out that the government needs to bear the following points in mind when formulating its industrial policy:

• A competitive assessment shall be enshrined in law and implemented as a permanent feature of all policy-making and the preparation of legislation and regulations.
• The design of employment policy should be based on seven criteria proposed by the OECD in a new report.
• Utilise the experience of other countries in regulatory simplification and reform.
• Avoid specific support that distorts competition.
• Ensure a level playing field and an effective regulatory framework that facilitates market access for new entrants.
• Strengthen the framework for public procurement as one of the most powerful tools to make better use of taxpayers' money, increase effective competition and support innovation.

The Competition Authority also draws attention to the risk factors that the OECD has pointed out in connection with industrial policy, including that governments generally lack sufficient information to pick „winners“, that powerful vested interests can exert too much influence on policy for their own benefit, and that state support can reduce incentives for innovation. Furthermore, some countries lack the administrative capacity to implement industrial policies; such policies have also led to protectionism towards foreign countries or to support that is not needed where investment would have taken place anyway („windfall effects“).

„The Competition Authority considers it important that the consultation process now underway for the proposed industrial policy is carried out with due care, as it will have a long-term impact on the business environment and the development of industry. In this context, it is important for the government to be aware that effective competition is the foundation for most of the objectives set out in the draft plan.“ the review says.