Rethinking industrial policy

Industrial policy has a bad name: â??picking winnersâ?? and thus distorting competition, while exposing government to capture by vested interests. But there are reasons for a rethink. First, climate change: without government intervention to jump-start massive private investment in clean technologies, governments, by default, encourage investment in dirtier technologies. Second, a new post-crisis realism: laissez-faire complacency by many governments has led to mis-investment in the non-tradable sector at the expense of growth-rich tradables. Third, China â?? and some other emerging economies â?? are big deployers of growth-enhancing sectoral policies. The challenge for Europe is how it can design and govern sectoral policies that are competition-friendly and thus growth-enhancing.

Industrial Policy and Competition Law and Policy

This afternoon - and it\u27s nearly evening - I would like us to try to rethink industrial policy. I think it makes no sense to speak of industrial policy and competition policy as distinct, one from the other, let alone as antagonistic policies. I would rather define industrial policy as one which frames the structural conditions necessary to ensure economic success in a globalizing economy. I therefore have no qualms in saying that competition policy should form a central plank in any industrial policy. As a member of the European Commission, I will focus my comments on the interconnect between industrial and competition policy in the European Union. But these issues are not just relevant for Europe. Our challenges are not so different from those facing other economies in today\u27s world. I will first explain why embracing open markets and renouncing protectionism, or what might be characterized as old-fashioned industrial policy, is not only desirable, but imperative. I will then go on to set out some essential ingredients of a modern industrial policy, at least as I see it, and explain why competition policy, in the widest sense, if you allow me, should play a central role in shaping this

RETHINKING INDUSTRIAL POLICY

Despite the hold of the neoliberal orthodoxy on policy making in developing countries, industrial policy remains important for the promotion of industrial development. However, the context for the design of industrial policy has profoundly changed as a result of new rules governing international trade, the rise of global value chains and marketing networks, and other aspects of globalization. Traditionally, the case for industrial policy has been framed in terms of “market failures” but the paper argues that that is not a sufficient basis. After addressing the traditional points of criticism, an attempt is made to outline the “domains” of industrial policy in the current circumstances, especially for industrially lagging countries. As country contexts differ widely there are no satisfactory blueprints for policy making that countries can readily adopt. As in production decisions, considerable ingenuity and innovation is needed in designing policies. This is all the more necessary as the WTO rules have become increasingly stringent and the rise of international trading networks has created new barriers for young firms to enter the world market. These developments have changed the context but not the importance of policy in industrial development. The paper identifies areas where government intervention is needed and can still make a positive difference.

Industrial policy for the medium to long-term

This report reviews the market failure and systems failure rationales for industrial policy and assesses the evidence on part experience of industrial policy in the UK. In the light of this, it reviews options for reshaping the design and delivery of industrial policy towards UK manufacturing. These options are intended to encourage a medium- to long-term perspective across government departments and to integrate science, innovation and industrial policy

THE MAIN OBJECTIVE OF TURKEY’S INDUSTRIAL POLICY TOWARDS EU MEMBERSHIP:IS IT REALISTIC OR NOT?

Generally, “industrial policy” can be defined as government interventions to promote industrial development beyond what would be realized by free market conditions. In the globalisation processes, physical-resource-based industries are declining, while high-tech industries and services are fastly increasing. In the new techno-economic paradigm based on information & telecommunications technologies, innovative activities such as absorption-reproduction of new technologies and industrial research and development (R&D) have become key to international industrial competitiveness. So that, Turkey’s industrial policy that integreted with technology policy should realize the technological competence and industrial deepening (structural change) as a shift from labour and resource-based products to high-tech-based products. In 2003, T.R Prime Ministry, State Planning Organization published a document is titeled Industrial Policy For Turkey (Towards EU Membership). The aim of this paper is to criticize “Industrial Policy For Turkey”. The objectives and principles of Industrial Policy For Turkey will be reviewed in the context that either theoretical framework or Turkey’s industrial structure, institutional framework, incentive instruments and legal-administrative measures.Industrial and Technology Policy; EU Industrial Policy; Turkish Industrial Policy

Industrial Policy and Growth

The paper highlights how the rationales and instruments of industrial policy have changed since the 1960s. It finds that theories of industrialization have come full circle, as many of the assumptions behind the market failure paradigm have made a comeback. The policy implications of these theories, however, have not been similarly resurrected. It makes an explicit comparison between the strategies of East Asia and Latin America, and reviews the explanations for their divergent performance. It identifies a “back to the future” quality of Latin America’s situation, pointing to the region’s balance of payments constraint and dependence on commodity-like industrial products.Industrial Policy, Competitiveness, East Asia, Latin America

Chapter 4: Industrial policy

This chapter argues against using industrial policy to protect European firms from international competition because of the long-run costs that are likely to arise. Industrial policy should be horizontal rather than sector-based and it should be located mainly at the regional and EU level, but cut back at the national level.

Development Trends and Economic Assessment of the Integration Processes on the Metals Market

In the present paper, reasons for the increased interest in industrial policy in both developed and developing countries are explained. The systematisation of the results of the development of Russian industry from 1989 to 2014 showed a lack of systematic selection of its priorities, preventing the formation of a strategic vector of industrial policy. The target diversity of the industrial policy is established at the different economic development stages of the country. In the context of economic sanctions against Russia, it is shown that the emergence of a new industrial policy vector is connected to the need for import substitution and concomitant changes in the development model of the domestic economy. The dynamics and characteristics of the industrial development area are shown by the example of a highly developed region like the Central Urals. The total level of organisational innovation activity continues to be low and composes only 12%, although in the manufacturing sector this index is higher than the regional economy index by four absolute percentage points. The industrial policy of the Central Urals is analysed and innovation drivers of the industrial sector of the regional economy are established. The possibilities of the defence, civil engineering, mining, chemical/pharmaceutical and forestry complexes of the Sverdlovsk Region to implement its import substitution policy are explained. The most significant investment projects that will reduce the import dependence of the regional economy are presented. The possibilities of the research sector and created innovation infrastructure of the region in solving this problem are shown. It is necessary to develop the regional laws on the elaboration of industrial policy according to the basic regulations of the Federal Law “On Industrial Policy in the Russian Federation.”This article was prepared with support of the Grant of the Russian Foundation for Humanities No. 14-32-01030

The Flowchart Model of Cluster Policy: The Automobile Industry Cluster in China

This paper proposes a general model of the flowchart approach to industrial cluster policy and applies this model to Guangzhou's automobile industry cluster. The flowchart approach to industrial cluster policy is an action plan for prioritizing policy measures in a time-ordered series. We reached the following two conclusions. First,we clarified the effects of Honda, Nissan, and Toyota on agglomeration in Guangzhou's automobile industry cluster. Second, we established that local governments play a crucial role in successful industrial cluster policy, and that the mayor of the local government should be offered incentives in order to target industrial clustering and implement cluster policy.Prioritization of cluster policy, Linearization of policy measures, Flowchart model, Inductive method, Anchor firm, Capacity, China, Industrial estates, Industrial policy, Automobile industry