IDEAS home Printed from
   My bibliography  Save this paper



  • Richard G. Lipsey

    (Simon Fraser University)

  • Kenneth I. Carlaw

    (UBC Okanagan)


This paper reviews some of the myriad, often complex, ways in which the private and public sectors interact in the invention and innovation of the new technologies that are a major driver of economic growth. Several terms have been used to describe the public sector’s activities in these matters: technology enhancement policy, innovation policy, industrial policy, and national systems of innovation. We use the term Industrial Policies to cover all the public sector’s activities that, either directly or indirectly, encourage technological advance. We first outline some important concepts and definitions: two views of the place of the public sector in technological advance; the definition of technology and the facilitating structure; the main public sector organisations that encourage technological advance; the four evolutionary trajectories of a new technology: invention, efficiency, applications and diffusion; the growing importance of science in technological advance; and an overview of a successful industrial policy. In Section II we study 13 important technologies developed over the last century and a half, showing the extent that the public sector has provided finance for the various trajectories of these technologies. In Section III we consider nine public policies designed to encourage technological advance in general. Then in section IV, we discuss over 20 cases in which the government has attempted to pick and encourage specific winners, some of which were successes while others were failures. After each of our case studies in our three main sections, we offer at least one tentative lesson concerning the conditions that favour success and/or that tend to lead to failure. Section V offers a few concluding remarks ending with the statement that “The cases considered here reveal that those who would dismiss industrial policy with statements such as ‘Governments cannot pick winners’ are relying on an empty slogan to avoid detailed consideration of the actual complicated, multifaceted relationship between the private and public sectors in encouraging the inventions and innovations that are the root of economic growth.

Suggested Citation

  • Richard G. Lipsey & Kenneth I. Carlaw, 2020. "INDUSTRIAL POLICIES: Common Not Rare," Discussion Papers dp20-11, Department of Economics, Simon Fraser University.
  • Handle: RePEc:sfu:sfudps:dp20-11

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Lipsey, Richard G. & Carlaw, Kenneth I. & Bekar, Clifford T., 2005. "Economic Transformations: General Purpose Technologies and Long-Term Economic Growth," OUP Catalogue, Oxford University Press, number 9780199290895.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kariem Soliman, 2021. "Are Industrial Robots a new GPT? A Panel Study of Nine European Countries with Capital and Quality-adjusted Industrial Robots as Drivers of Labour Productivity Growth," EIIW Discussion paper disbei307, Universitätsbibliothek Wuppertal, University Library.
    2. Brett M. Frischmann & Christiaan Hogendorn, 2015. "Retrospectives: The Marginal Cost Controversy," Journal of Economic Perspectives, American Economic Association, vol. 29(1), pages 193-206, Winter.
    3. Ranfeng Qiu & John Cantwell, 2018. "The international geography of general purpose technologies (GPTs) and internationalisation of corporate technological innovation," Industry and Innovation, Taylor & Francis Journals, vol. 25(1), pages 1-24, January.
    4. Jeffrey Ding & Allan Dafoe, 2021. "Engines of Power: Electricity, AI, and General-Purpose Military Transformations," Papers 2106.04338,
    5. Clifford Bekar & Kenneth Carlaw & Richard Lipsey, 2018. "General purpose technologies in theory, application and controversy: a review," Journal of Evolutionary Economics, Springer, vol. 28(5), pages 1005-1033, December.
    6. Henri L.F. de Groot & Jacques Poot & Martijn J. Smit, 2007. "Agglomeration, Innovation and Regional Development: Theoretical Perspectives and Meta-Analysis," Tinbergen Institute Discussion Papers 07-079/3, Tinbergen Institute.
    7. Elena Castro-Martínez & Fernando Jiménez-Sáez & Francisco Javier Ortega-Colomer, 2009. "Science and technology policies: A tale of political use, misuse and abuse of traditional R&D indicators," Scientometrics, Springer;Akadémiai Kiadó, vol. 80(3), pages 827-844, September.
    8. Rita Strohmaier & Marlies Schuetz & Simone Vannuccini, 2019. "A systemic perspective on socioeconomic transformation in the digital age," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 46(3), pages 361-378, September.
    9. Broadberry Stephen, 2012. "Recent Developments in the Theory of Very Long Run Growth: A Historical Appraisal," Jahrbuch für Wirtschaftsgeschichte / Economic History Yearbook, De Gruyter, vol. 53(1), pages 277-306, May.
    10. Emmanuel Bovari & Victor Court, 2019. "Energy, knowledge, and demo-economic development in the long run: a unified growth model," Working Papers hal-01698755, HAL.
    11. Peter Howitt, 2007. "Innovation, Competition and Growth: A Schumpeterian Perspective on Canada’s Economy," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 246, February.
    12. Taalbi, Josef, 2017. "What drives innovation? Evidence from economic history," Research Policy, Elsevier, vol. 46(8), pages 1437-1453.
    13. Fabio Pieri & Michela Vecchi & Francesco Venturini, 2017. "Modelling the joint impact of R and D and ICT on productivity: A frontier analysis approach," DEM Working Papers 2017/13, Department of Economics and Management.
    14. Jan Lambooy, 2010. "The Evolution of Spatial Patterns over Long Time-Horizons: The Relation with Technology and Economic Development," Chapters, in: Ron Boschma & Ron Martin (ed.), The Handbook of Evolutionary Economic Geography, chapter 22, Edward Elgar Publishing.
    15. Peter Mayerhofer, 2013. "Wiens Industrie in der wissensbasierten Stadtwirtschaft. Wandlungsprozesse, Wettbewerbsfähigkeit, industriepolitische Ansatzpunkte," WIFO Studies, WIFO, number 57934.
    16. Monica A. Altamirano & Cees P. van Beers, 2018. "Frugal Innovations in Technological and Institutional Infrastructure: Impact of Mobile Phone Technology on Productivity, Public Service Provision and Inclusiveness," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 30(1), pages 84-107, January.
    17. Suenaga, Keiichiro, 2019. "The emergence of technological paradigms: The case of heat engines," Technology in Society, Elsevier, vol. 57(C), pages 135-141.
    18. Дементьев В.Е., 2013. "Структурные Факторы Технологического Развития," Журнал Экономика и математические методы (ЭММ), Центральный Экономико-Математический Институт (ЦЭМИ), vol. 49(4), pages 33-46, октябрь.
    19. A. Rainer & R. Strohmaier, 2014. "Modeling the diffusion of general purpose technologies in an evolutionary multi-sector framework," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 41(3), pages 425-444, August.
    20. Mario Coccia, 2017. "General purpose technologies in dynamic systems: visual representation and analyses of complex drivers," IRCrES Working Paper 201705, Research Institute on Sustainable Economic Growth - Moncalieri (TO) ITALY - former Institute for Economic Research on Firms and Growth - Moncalieri (TO) ITALY.

    More about this item


    policy; technology enhancement; innovation; industrial policy;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sfu:sfudps:dp20-11. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Working Paper Coordinator (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.