The Rationale for Industrial and Innovation Policy

Abstract

The evolution of industries in the last two centuries in all countries has been closely supported by a wide range of public policies addressing the patterns of capital accumulation, trade rules, the organisation of markets, innovative efforts and the process of knowledge creation and diffusion. Specific institutions have been created supporting such developments and have played a key role in economic growth. The protection of infant industries, the definition of trade and intellectual property regimes, the distribution of rents and the coherence with macroeconomic policies are key elements of such policies. The current challenges of industrial and innovation policies are discusses in the light of recent experiences in emerging countries.Keywords: secondary sector, public policy, industrial policy, market/commercialpolicy, industrialization, international trade, intellectual property, macroeconomics