Development and Modern Industrial Policy in Practice
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Development and Modern Industrial Policy in Practice

Issues and Country Experiences

Edited by Jesus Felipe

Development and Modern Industrial Policy in Practice provides an up-to-date analysis of industrial policy. Modern industrial policy refers to the set of actions and strategies used to favor the more dynamic sectors of the economy. A key aspect of modern industrial policy is embedding private initiative in a framework of public action to encourage diversification, upgrading, and technological dynamism to achieve development in the twenty-first century. The book reviews key questions that policymakers ask about industrial policy, such as: who selects sectors; what is the rationale for sector selection; what are the main tools to promote sectors; what is the role of human capital; and what are the mechanisms for monitoring and evaluation? Expert contributors discuss how to undertake industrial policy effectively and examine the experiences of Australia, the EU, the Republic of Korea, Malaysia, and the US.
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Chapter 13: Industrial policy in the European Union

Kristine Farla, Francesca Guadagno and Bart Verspagen


Industrial policy is often used to spur economic development, which is driven by structural change. This is a process that, if in the right direction, results in the reallocation of resources toward more productive activities. It also entails the diversification and upgrading of the country’s production and export basket, as well as the emergence of some activities and the disappearance of others. The transformation of an economy includes shifts from farming agriculture into agribusiness and manufacturing, within manufacturing into more knowledge-intensive activities, and from manufacturing into modern services. More broadly, structural change enables modernization and raises living standards.

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