Is the size of industry so important? A comparison of Germany and France

We compare Germany and France to find out whether having a large industry is as important as it often claimed. In principle, there are well-known advantages to having a large industry: A higher number of skilled and well-paid jobs; accordingly, a higher number of intermediate jobs, a less polarised labour market and lower inequality; normally a higher average income; If it is difficult to transform manufacturing jobs into services jobs, a large industry ensures a high employment rate; No trade deficit problem ; A higher education, research, innovation and corporate modernisation effort, and therefore higher productivity gains. But there are also conceivable problems related to the presence of a large industry: A tight cost-competitiveness constraint, which may also drive down the tax burden and lead to low wages in services (industry consumes a lot of services), leading also to inequality; Greater dependence on the global economic cycle; Greater dependence also on fossil fuels. Interestingly, a comparison between Germany and France reveals all the expected advantages but also all the expected disadvantages associated with Germany’s large industry .