When is industry ‘sustainable’? The economics of institutional variety in a pandemic

Abstract

Industrialising economies today are characterised by a multi-level heterogeneity of customs, norms, guidelines, standards, regulations and other laws that provide the broad scaffolding and the technical context for industrial activity. This institutional variety (IV) leads to combinatorial challenges about which institutions are mixed and matched as technologies and sectors evolve. Gaps in evolutionary political economy and evolutionary institutional methods should explain when variety is ‘better’ for industrial development. Two health industry cases, oxygen production and Ayurveda, have come into the pandemic spotlight under high demand and high uncertainty, by patients, state, firms, experts and other stakeholders. Both cases reflect markedly different types of institutional variety with implications for manufacturing and services. A debate of sustainable industrial policies (SIPs) thus requires attention to institutional variety (IV) and a future agenda on healthcare.