Thursday 22 September 2016

Is it possible to use aids to make a company great?

The WTO accuses the EU has failed to eliminate illegal aids to Airbus. It seems that Airbus has taken a great advantage of the aids, as it has made a contract with Iran. If the aids given towards Airbus are forced to be stopped, it will be a piece of good news for its rival Boeing.

The aerospace industry requires huge amounts of resources and investments and the ones who can provide such great amounts of resources and funds are merely the governments. In addition, these amounts of resources and investments can be effective to generate the innovations and inventions in the sector faster. Therefore, it is unfair if companies are provided with different amounts of aids. However, it is the truth that we do not always have the fairness.

Moreover, when we look back in history, we are not hard to find out that there were many industries that had been primarily driven by the government fundings. The Volkswagen was founded under the government scheme of People's car that aimed to provide each man with a car. Such project did not just create cars for the Germans at the time, but also created enormous jobs and one of the largest car makers in the world. In addition, the current space industry is heavily backed by the government fundings.

As we can see so many successful examples, it is fair to say that public funding can make one industry grow at an incredible pace. However, it may seem like a gamble when a poor government concentrates its budget in one sector, as it can potentially achieve enormous economic growth, but the probability of running the government into bankruptcy increases as well.


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