Shudder: The challenges to ‘industrial policies’ in the early 21st century in low- and middle-income economies

Abstract

Purpose

After some years in which industrial policy was frowned upon, it is now widely considered to be a legitimate arena for policy formulation. The danger is that policymakers will seek to return to previously implemented policies. However many elements of this historic policy agenda are not replicable because of changes in global governance regulations. But changing framing conditions in the global economy also mean that the historic agenda is no longer optimal.

Methodology/approach

This chapter discusses four disruptive structural changes which affect the industrial policy agenda – the changing manufactures-commodities terms of trade, the centrality of global value chains in world industrial production, the growth of environmental externalities which affect growth and development, and the need to develop more inclusive patterns of growth.

Findings

The key findings are that there is scope for industrial policies to successfully confront these challenges, but that this will be contextual and may require a mix of policies designed to meet multiple objectives.

Value/originality

Significantly, industrial policy should be seen as a process aligning the operations of key stakeholders and subject to change as conditions alter, rather than as an industrial policy roadmap of the sort which frequently characterised policy in the past.

Citation

Kaplinsky, R. (2014), "Shudder: The challenges to ‘industrial policies’ in the early 21st century in low- and middle-income economies", International Business and Sustainable Development (Progress in International Business Research, Vol. 8), Emerald Group Publishing Limited, Leeds, pp. 69-90. https://doi.org/10.1108/S1745-8862(2013)0000008019