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Industrial Policy and Development: Time for Disciplined Action

Author

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  • Oliver Kovacs

    (Ludovika University of Public Service)

Abstract

This essay seeks to answer one of the key paradoxes of the fourth industrial revolution (Industry 4.0) that has been unfolding since 2011: Despite the multitude of dedicated industrial policy strategies and policy interventions put in place since then, why have we not seen spectacular success? Using the US and EU industrial policy landscape, I argue that, although it will take time for the effects of Industry 4.0 to materialise, the strategy of "patience is a virtue" (respice finem) cannot be sustained indefinitely, i.e. until certain systematic industrial policy paradoxes are resolved, because only a systemic and primarily resilience-driven industrial policy can be expected to yield results.

Suggested Citation

  • Oliver Kovacs, 2023. "Industrial Policy and Development: Time for Disciplined Action," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 22(4), pages 5-30.
    • Handle: RePEc:mnb:finrev:v:22:y:2023:i:4:p:5-30
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    More about this item

    Keywords

    Industry 4.0; industrial policy; USA; Europe;
    All these keywords.

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods

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