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This book is the fruit of a European Studies Workshop held in 1992 at Nuffield College, Oxford, to consider how large-scale enterprises in Western Europe, and their host governments, have been coping with global competition and with European unifying pressures. There are three sets of contributions: on the distinctive styles and experience of the four lead economies; on five key sectors in which national ownership or direction had hitherto prevailed - electricity, telecoms, air transport, aerospace and the Channel Tunnel collaboration; and on the restructuring and regulatory roles of the European Commission. In his introduction, Jack Hayward puts two main questions. Will the successors to the old national champions have a European identity? And what scope is there for national industrial policy, and, since Maastricht, for European?

The changes that Europe's largest companies have responded to, and which they themselves helped to cause, have two principal drivers. The loss of local, de facto monopoly privilege has obliged them to become ever more stateless in outlook and more attuned to world capital and product markets. At the same time, they have been subject to insistent pressures to reorganise and restructure, to combine, and to ally in order to compete in the Triad and beyond. Governments look to entice investment and jobs from whatever source. There are no favourites now. The location of the headquarters bestows no advantage. The 1980s saw the withering of the distinctively different policy approaches of Germany (broadly corporatist), Britain (earlier financially supportive), Italy (dynastic) and France (veering away from dirigisme). All tended to converge, by the end of the decade, towards a reliance on unfettered competition to sort out the winners and losers. A deeper question that the book puts but cannot answer is this: if the member states maintain a detached approach, and if the power that the commission now has, on paper, to develop a common industrial policy remains in abeyance, which, if any, of the old national champions will become global title-holders? The local identities of the leading companies in Europe have almost disappeared. Mergers take no account of borders. Knowledge is shared with partners worldwide. One's closest neighbour in market space is often American or Japanese.

For all this seeming rapprochement, one of the striking features of the book is the witness it provides to the individuality of the main economies, (trained as each is by its peculiar history), and to the diversity even among sectors that share the experience of natural monopolies, thrown into a new gear by privatisation. The book is at its least successful when it searches for generalisations across this spread. For example, the "paradigm shift of the 1980s must be sought in the complex interaction of international, European Union and domestic pressures and in the interplay of ideological, financial, political, institutional and technological elements". No doubt. But what are the mechanisms through which the fresh competitive challenges and opportunities impinge on corporate strategy, on industrial policy and on market structure?

The essays are a treasure trove of detail on the main events. But they report, rather than explain. The reason may be that, apart from an excellent chapter by Cox and Watson on European restructuring, there is very little economics in the book. The absence is felt when a question such as "how much more industrial concentration is likely to be called for?" is addressed. In one place, it is assumed that more mergers will be required - perhaps to generate scale economies from the wider exploitation of costly R & D. Elsewhere, it is maintained, but without evidence, that scale economies have generally run out. Only the Andrew Cox and Glyn Watson chapter distinguishes between industries where market entry threat calls for further mergers, and where not, and spreads the net wider than the high-tech and largest-scale end of industry.

Overall, this is a fascinating account, but it is one that invites us to attribute an implausible future continuity to the present policy stances. How long, in point of fact, is the present fashion of state disengagement and reliance on market forces likely to last? European industrial policy currently concentrates on the encouragement of the wider application of new technology by means of the successive Framework Programmes. National policies are now tending to focus on bidding for favourable location decisions by global companies. That can be self-cancelling and wasteful. Furthermore, as the book shows, multinationals are engaged in a power game of influencing standard setting and supranational regulations as far as they can to their own advantage - a sort of "competition among rules". May both these tendencies lead to a larger future EU policy role? And what is the process by which foreign companies become naturalised "home" players?

The book is full of useful observations on the recent history of large-scale European enterprise and of the shades and mutations of national enterprise policy. One hopes it is followed up, extending the context to cover the impact of the non-nationals in Europe, and foreseeing the further changes in industry policy needed to guarantee the fuller use of European human resources and knowledge.

David Stout is director of the Centre for Business Strategy, London Business School.