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The ‘How ’ of Manufacturing: Industrial Policy

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Abstract

This chapter discusses questions such as why industrial policy is needed (especially in developing countries)? What kinds of policy are needed at what stage along the industrialization process? What are the criteria in selecting the appropriate industrial policy? It also discusses the sequencing between industrial policy on the one hand and science, technology, and innovation (STI) policies on the other. Should they be used concurrently? Can STI policies be effective in a less industrialized country? Finally, the chapter presents a methodology for strategic sectors to be selected by policy makers from an industrial policy perspective. This is done for the first time globally. Do all manufacturing subsectors have the same developmental impact? Or, are some subsectors different from others? If so, how can these strategic sectors be identified?

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Notes

  1. 1.

    Mosconi (2006, 2015a, b).

  2. 2.

    Lucas (1993).

  3. 3.

    Pritchett (2000).

  4. 4.

    Aiyar et al. (2013).

  5. 5.

    Yeldan et al. (2012).

  6. 6.

    Eichengreen et al. (2012, 2013), Aiyar et al. (2013).

  7. 7.

    Yilmaz and Saracoglu (2016), Lee and Narjoko (2015).

  8. 8.

    Such as Amsden (1992), Johnson (1982), Westphal (1990).

  9. 9.

    Weiss (2015).

  10. 10.

    Various studies have examined the de-industrialization process such as Nickell et al. (2008), Lawrence and Edwards (2013), and Peneder and Streicher (2018). Dasgupta and Singh (2006) minted the term premature de-industrialization and Rodrik (2015) discussed it further.

  11. 11.

    Papanek (1962).

  12. 12.

    It can be said that there is one main line of criticism against the sectoral industrial policies: How can the government ‘select a sector’ better than the firms? Then, this line of criticism sets out to argue that general inefficiencies and failures of government action would extend to industrial policy.

  13. 13.

    Over time, the ‘strategic’ sectors also changed. For example, textiles, which was a targeted sector in Japan in late nineteenth and early twentieth centuries, lost its importance and share in GDP and exports against steel, automobiles, electronics, and so on.

  14. 14.

    Libicki (1989).

  15. 15.

    D’Hernoncourt et al. (2011).

  16. 16.

    Yülek (2016).

  17. 17.

    Yülek and Taylor (2012).

  18. 18.

    Yülek and Tiryakioğlu (2014).

  19. 19.

    Watermeyer (2012).

  20. 20.

    Yülek and Tiryakioğlu (2014).

  21. 21.

    Haines (2012).

  22. 22.

    Yülek and Taylor (2012), Yülek and Tiryakioğlu (2014), Haines (2012).

  23. 23.

    Yülek and Tiryakioğlu (2014).

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Authors and Affiliations

  1. Istanbul Commerce University, Istanbul, Turkey

    Murat A. Yülek

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Yülek, M.A. (2018). The ‘How ’ of Manufacturing: Industrial Policy. In: How Nations Succeed: Manufacturing, Trade, Industrial Policy, and Economic Development. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-13-0568-9_12

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  • DOI: https://doi.org/10.1007/978-981-13-0568-9_12

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  • Print ISBN: 978-981-13-0567-2

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