Public Investment, Resilience-Oriented Supply-Side Policy, and the Mental Multiplier
- olivierccoste
- Sep 28
- 1 min read
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Resilience Through Targeted Removal of Adjustment Barriers
Entrepreneur Oliver Coste has presented a compelling analysis of restructuring costs—what he calls the Cost of Failure—as a barrier to adjustment (Coste 2022; Coatanlem and Coste 2024). He examines how costly the failure of risky investments can be, especially when highly specialized workers have been hired. The focus is above all on the dismissal costs for highly qualified employees (the top 10% of the salary scale), which are largely determined by labor law. This barrier plays a major role in the tech industries, with their often disruptive innovations and therefore particularly risky investments. For Germany, France, and Italy in particular, Coste reaches sobering conclusions: here, restructuring costs are many times higher than, for example, in Switzerland, Sweden, and Denmark. If dismissals were made more flexible, the resilience of the tech industry—and thus its attractiveness for domestic and foreign private investment—would increase.
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