The pursuit of innovation for transition to a knowledge economy: new challenges of industrial policy-making
by Andrew L.S. Goh
International Journal of Technology, Policy and Management (IJTPM), Vol. 4, No. 3, 2004

Abstract: In most developing economies, industrialisation has constituted a major objective of development strategy and government policy. Through industrialisation, developing nations aspire to attain higher levels of economic prosperity and to eventually achieve developed nation status. However, despite having enacted industrial policies with the objective of stimulating economic growth, it remains doubtful whether the approach of industrial policy-making in developing countries has indeed succeeded in transforming their economies. While policy critics, industrial macro-economists and technocrats are in support of innovation-driven industrial policy that fosters skills upgrading, enhances industrial growth and produces world-class exports, several lessons can be drawn from the developed world. This paper discusses why industrial policy-making, to be effective in transiting to a knowledge economy, must address the pursuit of innovation as a prime mover in economic development. It outlines the role of governmental facilitation to put the importance of an innovation-driven industry policy in the right perspective. It also provides evolutionary perspectives of Singapore's industrial policy-making in relation to how it has helped build the nation to its current state of economic development. Finally, it concludes with the new challenges of industry policy.

Online publication date: Mon, 31-Jan-2005

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