What is new in the new industrial policy? A manufacturing systems perspective

Abstract

This paper explores the recent evolution of manufacturing-related policies in leading OECD economies-Germany, Japan, the United Kingdom, and the United States. A novel framework, the industrial policy matrix, is introduced and then used to illustrate and compare policy approaches in terms of factor inputs, intervention levels, and degrees of coordination. While approaches adopted in different countries vary, reflecting their respective contexts, there is some evidence of a convergence on the effectiveness of particular programmes and organizations as well as on the characteristics that support the competitiveness of national manufacturing systems, including coordination and alignment of related policies, partnerships with industry, and longer-term investment and planning.

Evaluation of Industrial Policy

“…The renewed interest in industrial policy around the world has a number of causes and manifests in different ways (O'Sullivan et al, 2013;Warwick, 2013;Stiglitz et al 2013). Many countries are being more explicit about industrial policy than in the past and there is renewed interest and debate about the appropriate role of Government in seeking to influence the evolution of the structure of the economy.…”

“…Examples can be found in the literature of success stories of more general industrial strategy programmes in both OECD and developing countries (Rodrik, 2004;Bianchi and Labory, 2011;O'Sullivan et al, 2013). But systematic evidence is harder to come by and many economists remain to be convinced.…”

Why and How Does Manufacturing Still Matter: Old Rationales, New Realities

“…For example, among the group of today's advanced economies, we observe two different groups of countries. There are those such as Germany and Japan which have maintained a strong manufacturing base and there are those such as the US and UK who have increasingly relied on services (O'Sullivan et al, 2013). The manufacturing development trajectories followed by China and India or Brazil are also very different.…”

The commoditisation of automotive assembly: Canada as a cautionary tale

“…In so doing, the paper situates itself within a body of research that examines the challenges that the governments of developed nations face in designing, implementing, and deploying 'new' industrial policies (see Livesey, 2012;MacNeill and Bailey, 2010;O'Sullivan et al, 2013;Vanchan et al, 2015). This literature emerged alongside debates regarding the intensified role of the state in supporting manufacturing following the economic crisis of 2008-2009.…”