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INDUSTRY ANALYSIS 2012 problems, Spain has also identified key sectors for development, although its vaunted high-speed rail program does not seem to be one of them, as the gov- ernment also announced cuts of more than 25% to rail investments. For the European Union as a whole, the European Commission's Director- ate General of Enterprise and Industry systematically analyzes, sector by sec- tor, country by country, the economic competitiveness of the whole region on a regular basis. Its most recent analysis assessed developments in key indus- trial sectors and identified upcoming challenges. It focused particular atten- tion on the following issues: • Regulatory framework and barri- ers, including environmental protec- tion and competition. • Position of each sector in the inter- national trade. • The role of government policies and funding in research, development and innovation, and knowledge and skills development. In this analysis, advanced trans- portation technologies received some particular focus. The analysis recom- mended that the European Commis- sion will "undertake a feasibility study on demonstration projects on rail en- ergy storage and the hybridization of diesel traction, enabling demonstra- tion and further research projects to in- crease energy efficiency and strengthen competitiveness." It plans to issue a call for proposals next year. This initiative followed on additional infrastructure investments that it recommended in 2011 and 2012 in advanced transpor- tation technologies and infrastructure development. "But for [many] reasons…develop- ment requires more than a good night watchman," wrote Dani Rodrik, pro- fessor of international political econ- omy at Harvard University's Kennedy School of Government in a 2007 pa- per on international comparisons of national industrial policies. "The lit- erature on development gives us good 8 < mETRO mAGAZINE FACT BOOK 2013 In August 2010, The Economist noticed a renewed interest in more vigorous industrial policies throughout the world, particularly in developed countries. conceptual and empirical reasons to believe that market imperfections hin- der the full … returns in growth-pro- moting investments. He says that even when institutions are improved to en- courage market development all of the barriers to industrial development may still not be overcome, and that there is a government role. "Good governance has to be seen in part as the ability to generate and implement the policy initiatives needed to alleviate the consequences of market imperfections," he concludes. "Countries such as South Korea, Taiwan, China have developed not by suddenly perfecting their institutions, but by coming up with policies that overcame the market obstacles that their investors faced." CROSSROADS DECIDED IN THE ELECTION Like many issues in the November election, the outcome of industrial-type policies currently being implemented or even past practices could be decided by who wins. President Obama has campaigned on a variety of interven- tions in the economy he has said were needed not only to stave off a repeat of the Great Depression of the 1930s but also to lay the groundwork for an "economy built to last." Many of the proposals in his 2011 American Jobs Act as well as Buy America and research provisions in MAP-21 are designed to boost domestic public transportation equipment manufacturing. His challenger, former Massachusetts Gov. Mitt Romney, has vowed to scale back much of these initiatives, however. For example, he has called the House- passed 2012 budget resolution, which called for the elimination of New Starts funding and Amtrak, "marvelous," and named its author, Rep. Paul Ryan, as his running mate. If they are elected, new federal involvement in public transportation seems virtually impossible, unless they reverse their campaign positions. We will thus know very soon wheth- er U.S. industrial policy in public trans- portation will emulate the efforts of other nations, or be the exception to what is becoming the rule throughout the global economy. Cliff Henke is a senior analyst at Parsons Brinckerhoff. He is based in Los Angeles. metro-magazine.com