Industrial policy: new technologies and transformative innovation policies?

Editorial by David Bailey (Birmingham Business School, UK), Amy Glasmeier (Massachusetts Institute of Technology, USA), Philip R. Tomlinson (University of Bath, UK; Birmingham Business School, UK) and Peter Tylerd (Department of Land Economy, Cambridge, UK) published in Cambriudge Journal of Regions, Economy and Society Volume 12 Issue 2 (July 2019)

Industrial Policy and industrial strategy

Deep history

In many parts of the world, stagnant economies, rising inequality and sluggish regional growth have renewed interest in and experimentation with industrial policy. This reflects a longstanding trend in economic history, where economic downturns have invariably led to follow-on attempts of some form of state-led economic revival and subsequent policy cycles, usually accompanied with regime change to contain some type of shock (Williams, 2012). Examples abound.

In the late 18th century, in the USA, the first evidence of industrial policy—largely through the efforts of Alexander Hamilton (the First US Treasury secretary) and his 1791 Report on the Subject of Manufactures—accompanied the nation’s hard-fought economic independence which energised the nation’s elite to emulate features of European industrialisation in pursuit of modernisation; policy instruments included closed borders and import substitution, frequently aided by piracy and industrial espionage (see Irwin, 2004). These ideas were strongly supported by the German–American economist Frederick List (1841), who provided one of the first theoretical treatises for industrial policy by arguing that policymakers should take a long-term view of economic development and intervene accordingly, especially to promote domestic manufacture and commerce (see Chang, 2002).

Full text (PDF 9pp)

Hazel’s comment:
And finally I read something that makes sense to a lay person with an interest in global economics, namely me.

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