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Industrial and technological policy: Contributions from evolutionary perspectives to policy design in developing countries

  • Yoguel, Gabriel
  • Pereira, Mariano

In the recent years a renewed consensus about the crucial role of industrial and technological policy to economic development has been growing. Despite of that, strong theoretical differences still persist concerning why and how the government must intervene in the economy. Neoclassical approach proposes that the intervention is only justified by the presence of market failures which leads to an underinvestment on R&D expenditures with respect to a Pareto efficiently level (Arrow and Debreu, 1954). Contrary to this view, a heterodox position integrated by several theoretical approaches can be identified. This group of heterodox authors does not constitute a cohesive and homogeneous corpus. In this paper three different approaches are differentiated. Firstly, we have identified a literature centred on population thinking models (Metcalfe 1994 and 2002, Dopfer, Foster and Potts, 2004, among others) that focus their analysis on the mechanism of variation, selection and retention in the competition process . From this perspective, policy design should be centred on: i) improving firms’ capabilities to increase the system variety which lead to renewing the process of market selection, and ii) enhancing the institutions that regulate the market-selection process. Secondly, we have identified a literature centred on the concept of national systems (Lundvall, 1992; Freeman, 1987; Nelson 1992 and Edquist, 1997), sectorial system (Malerba, 2002) and local system of innovation (Boschma and Martin, 2011; Antonelli, 2011). According to these authors, the elements that block the virtuous-functioning of the system and lead to a low innovative performance are targets for policy maker. Hence, industrial and technological policies should be focused on: i) enhancing agents’ capabilities and ii) improve their interactions. Thirdly, we have identified a literature integrated by contributions from evolutionary authors interested on the role of demand and cumulative causation process (Dosi, 2014; Saviotti y Pyka, 2002; Antonelli, 2011). This contributions are complemented and extended by others contributions that comes from neo-Structuralist and post-Keynesianism framework (Cimoli, Dosi, Stiglitz, 2009; Cimoli y Porcile, 2011, 2013) and authors inscribed in both theoretical traditions (Lee, 2013; Dosi, 2014). This evolutionary approach is focused on the divergence between economies and considers that gap’s reduction requires policies aimed at promote the generation of non-related variety with the production structure (Saviotti y Pika, 2002). In this context, the main objective of this paper is to discuss the prescriptions of industrial and technological policy that can be derived from this broad group of heterodox authors; and taking into account the specificities of developing countries stressed by Arocena and Sutz (2000, 2002 y 2003), Dutrenit, Rodriguez and Vera-Cruz (2006) and Cassiolato and Lastres (2009), among others. The combination of the three evolutionary streams is the path that industrial and technological policy should follow in developing economies and especially in Latin America. So, incorporating a concern for the divergence and the need for instruments that strengthen both the coevolution between related and unrelated variety and the dynamic of micro, meso and macro dimensions are keys. These instruments would be enhanced even more if population competition and innovation systems approaches are considered. This requires i ) to consider in which scheme of population competition the generation of variety emerge, ii) to develop firm´s capacities, and iii ) to design tools to improve the selection conditions These related and unrelated variety processes have a sectorial and regional general affiliation. Therefore, the contribution of the literature of local and sectorial innovation systems is important to understand existing blockades to generate positive feedbacks and increasing returns. Finally, the national innovation system approach can add elements of policy focused on both the necessary institutions for generating unrelated variety processes in the interactions between institutions and firms, and the need to identify the blockages that impede the process of building capacities.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 56290.

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Date of creation: 29 May 2014
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Handle: RePEc:pra:mprapa:56290
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  1. Analia Erbes & Veronica Robert & Gabriel Yoguel, 2010. "Capacities, innovation and feedbacks in production networks in Argentina," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 19(8), pages 719-741.
  2. Pier Saviotti & Andreas Pyka, 2004. "Economic development by the creation of new sectors," Journal of Evolutionary Economics, Springer, vol. 14(1), pages 1-35, January.
  3. Dosi, G. & Marengo, L. & Pasquali, C., 2006. "How much should society fuel the greed of innovators?: On the relations between appropriability, opportunities and rates of innovation," Research Policy, Elsevier, vol. 35(8), pages 1110-1121, October.
  4. Mark Doms & Eric J. Bartelsman, 2000. "Understanding Productivity: Lessons from Longitudinal Microdata," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 569-594, September.
  5. John Foster, 2005. "From simplistic to complex systems in economics," Cambridge Journal of Economics, Oxford University Press, vol. 29(6), pages 873-892, November.
  6. Sandro Sapio & Alan Kirman & Giovanni Dosi, 2011. "The Emergence and Impact of Market Institutions: The Wholesale Market for Fish and Other Perishable Commodities," LEM Papers Series 2011/14, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  7. Bleda, Mercedes & del Río, Pablo, 2013. "The market failure and the systemic failure rationales in technological innovation systems," Research Policy, Elsevier, vol. 42(5), pages 1039-1052.
  8. Christian Schubert, 2009. "Darwinism in Economics and the Evolutionary Theory of Policy-Making," Papers on Economics and Evolution 2009-10, Philipps University Marburg, Department of Geography.
  9. J. Stan Metcalfe & John Foster & Ronnie Ramlogan, 2006. "Adaptive economic growth," Cambridge Journal of Economics, Oxford University Press, vol. 30(1), pages 7-32, January.
  10. Giovanni Dosi & Sébastien Lechevalier & Angelo Secchi, 2010. "Introduction: Interfirm heterogeneity--nature, sources and consequences for industrial dynamics," Industrial and Corporate Change, Oxford University Press, vol. 19(6), pages 1867-1890, December.
  11. Pier Paolo Saviotti, 2001. "special issue: Variety, growth and demand," Journal of Evolutionary Economics, Springer, vol. 11(1), pages 119-142.
  12. David Palfreyman, 2002. "Book Review," Higher Education Management and Policy, OECD Publishing, vol. 14(1), pages 127-133.
  13. Kurt Dopfer & Jason Potts, 2004. "Evolutionary realism: a new ontology for economics," Journal of Economic Methodology, Taylor & Francis Journals, vol. 11(2), pages 195-212.
  14. Malerba, Franco, 2002. "Sectoral systems of innovation and production," Research Policy, Elsevier, vol. 31(2), pages 247-264, February.
  15. Thorbj, rn Knudsen, 2002. "Economic selection theory," Journal of Evolutionary Economics, Springer, vol. 12(4), pages 443-470.
  16. Kurt Dopfer, 2006. "The Origins of Meso Economics - Schumpeter's Legacy," Papers on Economics and Evolution 2006-10, Philipps University Marburg, Department of Geography.
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