Lost in transition: systemic innovations and the new role of the state in industrial policy


We argue that the present economic crisis reflects the on-going transition towards a networked, knowledge based, globalised economy, and this transition affects the role of industrial policies. From this perspective, we suggest that the State should intervene along three main lines. First, action is needed to make the quality and innovative potential of territories recognisable. Second, substantial investments should be targeted to human capital formation, and to communication skills and infrastructures. Third, policies should be designed to maintain and upgrade skill intensive activities, and to attract high value added foreign investment. A bottom up approach should be adopted in the design of policies, as to favour the self-organization of individuals, creative clusters and communities.

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  1. 1.

    The analysis of changes in techno-economic and institutional paradigms has been initiated by Freeman (1984), Perez (1983), and Dosi (1982) and emphasises the role of fundamental clusters of innovations identified as: “changes in key factors” (Perez 1983), “general purpose technologies” (Helpman 1998) or “disruptive innovations” (Downes and Nunes 2014). Changes in paradigms induced by the generation and diffusion of such technologies have historically provided broad avenues that help identify priorities, and hence, influence the direction and intensity of, and co-evolve with, other technical, organisational and institutional innovations that will eventually take place (Nelson 1994; Arthur 2009; Stiglitz and Greenwald 2014).


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Correspondence to Antonello Zanfei.

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Rullani, E., Cozza, C. & Zanfei, A. Lost in transition: systemic innovations and the new role of the state in industrial policy. Econ Polit Ind 43, 345–353 (2016). https://doi.org/10.1007/s40812-016-0045-6

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  • Industrial policy
  • Innovation
  • Transition
  • Knowledge economy
  • Globalisation

JEL Classification

  • E6
  • L5
  • O4