Challenges of industrial policy to enhance competitiveness



Abctract. This study explores how the traditional approaches of perceiving competitiveness and industrial policy could be enriched through a synthetic and evolutionary perspective. Competitiveness, in particular, tends to be studied in the literature in a relatively fragmented way, focusing either on the level of individual nations, or on the sectors of economic activity, or on the firm level. As a result, the evolutionary structures that define competitiveness in a unified socioeconomic way are usually bypassed. In this context, the traditional approach to industrial policy-making, which has as sole objective the strengthening of specific sectors, is inadequate to enhance the multilevel socioeconomic competitiveness in our days. Therefore, we suggest a comprehensive re-positioning of the concept of "organic competitiveness" in overall and synthetic socioeconomic terms (firms-sectors-socioeconomic systems) as useful for a redirected modern industrial policy.

Keywords. Competitiveness, Industrial policy, Evolutionary link between competitiveness and industrial policy, Globalization.

JEL. L52, B52, F63.


Competitiveness; Industrial policy; Evolutionary link between competitiveness and industrial policy; Globalization.

Full Text:


Aiginger, K. (2007). Industrial policy: A dying breed or a re-emerging phoenix. Journal of Industry, Competition and Trade, 7(3), 297-323. doi. 10.1007/s10842-007-0025-7

Aiginger, K. (2015). Industrial policy for a sustainable growth path. In D. Bailey, K. Cowling, & P. Tomlinson (Eds.), New perspectives on industrial policy for a modern Britain (pp.364-394). Oxford: Oxford University Press. doi. 10.1093/acprof:oso/9780198706205.003.0019

Altomonte, C., & Békés, G. (Eds.). (2016). Measuring competitiveness in Europe: Resource allocation, granularity and trade. Brussels, Belgium: Bruegel.

Aoki, M., Gustafsson, B., & Williamson, O.E. (Eds.). (1990). The Firm as a Nexus of Treaties. London: Sage.

Auzina-Emsina, A. (2014). Labour productivity, economic growth and global competitiveness in post-crisis period. Presented in Procedia - Social and Behavioral Sciences, 19th International Scientific Conference “Economics and Management 2014 (ICEM-2014), pp.156, 317-321. doi. 10.1016/j.sbspro.2014.11.195

Bailey, D., Cowling, K., & Tomlinson, P. (2015). New Perspectives on Industrial Policy for a Modern Britain. Oxford: Oxford University Press.

Baldwin, R.E. (1969). The case against infant-industry tariff protection. Journal of Political Economy, 77(3), 295–305.

Balkyte, A., & Tvaronavičiene, M. (2010). Perception of competitiveness in the context of sustainable development: Facets of “sustainable competitiveness.” Journal of Business Economics and Management, 11(2), 341–365. doi. 10.3846/jbem.2010.17

Bartelsman, E., Haltiwanger, J., & Scarpetta, S. (2013). Cross-country differences in productivity: The role of allocation and selection. American Economic Review, 103(1), 305-334. doi. 10.1257/aer.103.1.305

Baslé, M. (2008). Économie, Conseil et Gestion Publique: Suivi et Evaluation des Politiques Publiques et des Progammes. Paris: Economica.

Best, M.H. (1990). The New Competition: Institutions of Industrial Restructuring. Cambridge, Mass: Harvard University Press.

Bhawsar, P., & Chattopadhyay, U. (2015). Competitiveness: Review, reflections and directions. Global Business Review, 16(4), 665–679. doi. 10.1177/0972150915581115

Bošković, G., & Stojković, A. (2014). Industrial policy as the European Union competitiveness factor on the global market. Economic Themes, 52(3), 297–312. doi. 10.1515/ethemes-2014-0019

Bussiere, M., Gaulier, G., & Jean, S. (2014). La compétitivité-prix explique-t-elle les performances à l’exportation de la France et de ses partenaires? La Lettre Du CEPII, 349. 1-4.

Chang, H.-J. (2002). Breaking the mould: An institutionalist political economy alternative to the neo‐liberal theory of the market and the state. Cambridge Journal of Economics, 26(5), 539–559. doi. 10.1093/cje/26.5.539

Chang, H.-J. (2011). Industrial policy: Can we go beyond an unproductive confrontation?. Annual World Bank Conference on Development Economics, pp.83-109. [Retrieved from].

Chaudhuri, S., & Ray, S. (1997). The competitiveness conundrum: Literature review and reflections. Economic and Political Weekly, 32(48), M83–M91.

Chiappini, R. (2011). Comment mesurer la compétitivité structurelle des pays dans les équations d’exportation? L’Actualité Economique, 87(1), 31-57. doi. 10.7202/1006338ar

Cho, D.-S., & Moon, H.-C. (2000). From Adam Smith to Michael Porter: Evolution of competitiveness theory. New Jersey; London; Singapore; Hong Kong: World Scientific.

Cimoli, M., Dosi, G., & Stiglitz, J.E. (2009). Industrial Policy and Development: The Political Economy of Capabilities Accumulation. Oxford; New York: Oxford University Press.

Cirillo, V., Guarascio, D., & Pianta, M. (2014). Will Europe’s industry survive the crisis? Competitiveness, employment and the need for an industrial policy (No. 1408). University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini. [Retrieved from].

Colombo, A.W., Karnouskos, S., Kaynak, O., Shi, Y., & Yin, S. (2017). Industrial cyberphysical systems: A backbone of the fourth industrial revolution. IEEE Industrial Electronics Magazine, 11(1), 6–16. doi. 10.1109/MIE.2017.2648857

Committee of the Regions. (2011). An integrated industrial policy for the globalisation era: Putting competitiveness and sustainability at centre stage. Opinion of the Committe of the Regions No. 92nd Plenary Session. Brussels: European Union. [Retrieved from].

Davis, N. (2016, January 19). What is the fourth industrial revolution. Access: January 17, 2019. [Retrieved from].

Dopfer, K. (2006). The Evolutionary Foundations of Economics. Cambridge, UK; New York, NY: Cambridge University Press.

Dopfer, K. (2011). The origins of meso economics: Schumpeter’s legacy and beyond. Journal of Evolutionary Economics, 22(1), 133–160. doi. 10.1007/s00191-011-0218-4

Dopfer, K., Foster, J., & Potts, J. (2004). Micro-meso-macro. Journal of Evolutionary Economics, 14(3), 263–279. doi. 10.1007/s00191-004-0193-0

Dunning, J.H. (1993). Internationalizing Porter’s diamond. Management International Review; Wiesbaden, 33(2), 7–15.

Esser, K., Hillebrand, W., Messner, D., & Meyer-Stamer, J. (1996). Systemic Competitiveness: New Governance Patterns for Industrial Development. London: Frank Cass.

European Commission, & Directorate-General for Enterprise and Industry. (2011). A Policy for Industrial Champions: From Picking Winners to Fostering Excellence and the Growth of Firms. Saarbrücken: Dictus Publishing

Falck, O., Gollier, C., & Woessmann, L. (2011). Industrial Policy for National Champions. Cambridge, MA: MIT Press.

Farla, K. (2015). Industrial policy for growth. Journal of Industry, Competition and Trade, 15(3), 257-282. doi. 10.1007/s10842-014-0183-3

Farole, T. (2011). Trade and industrial policy 2.0–Facilitating firm-level competitiveness and economy-wide adjustment. Tepav, Ankara, pp.43-60. [Retrieved from].

Fernández, M.T.F., & Pablo-Marti, F. (2016). Industrial competitiveness in MENA countries: Current strategic directions of industrial policy. In M. M. Erdogdu & B. Christiansen, Handbook of Research on Comparative Economic Development Perspectives on Europe and the MENA Region (pp. 152-171). Hershey, Pennsylvania: IGI Global.

Ferracci, M., & Wasmer, E. (2011). État Moderne, Etat Efficace: Évaluer les Dépenses Publiques pour Sauvegarder le Modèle Français. Paris: Odile Jacob.

Fetscherin, M., Alon, I., Johnson, J.P., & Pillania, R.K. (2012). Export competitiveness patterns in Indian industries. Competitiveness Review: An International Business Journal, 22(3), 188–206. doi. 10.1108/10595421211229637

Froy, F. (2013). Global policy developments towards industrial policy and skills: Skills for competitiveness and growth. Oxford Review of Economic Policy, 29(2), 344–360. doi. 10.1093/oxrep/grt020

Galbraith, J. (2000). U.S. industrial competitiveness policy: An update. In P. Conceição, D. Gibson, M. Heitor, & S. Shariq (Eds), Science, Technology, and Innovation Policy: Opportunities and Challenges for the Knowledge Economy (pp.171–194). Westport, Connecticut, London: Quorum Books.

Garelli, S. (2006). Top Class Competitors: How Nations, Firms, and Individuals Succeed in the New World of Competitiveness. Chichester, England; Hoboken, NJ: John Wiley & Sons.

Gassmann, H. (1994). From Industrial Policy to Competitiveness Policies. No.187:17. Paris: OECD Observer.

Gavetti, G., Greve, H.R., Levinthal, D.A., & Ocasio, W. (2012). The behavioral theory of the firm: Assessment and prospects. The Academy of Management Annals, 6(1), 1-40. doi. 10.1080/19416520.2012.656841

Geus, A. de. (2002). The Living Company. Boston, Mass: Harvard Business School Press.

Gilli, M., Mazzanti, M., & Nicolli, F. (2013). Sustainability and competitiveness in evolutionary perspectives: Environmental innovations, structural change and economic dynamics in the EU. The Journal of Socio-Economics, 45, 204–215. doi. 10.1016/j.socec.2013.05.008

Gowdy, J. (1997). Introduction: biology and economics. Structural Change and Economic Dynamics, 8(4), 377–383. doi. 10.1016/S0954-349X(97)00021-0

Grabas, C., & Nutzenadel, A. (2014). Industrial Policy in Europe After 1945: Wealth, Power and Economic Development in the Cold War. Basingstoke: Palgrave Macmillan.

Gu, W., & Yan, B. (2017). Productivity growth and international competitiveness. Review of Income and Wealth, 63(s1), S113-S133. doi. 10.1111/roiw.12254

Haar, L.N. (2014). Do patterns of trade and international competitiveness support the case for industrial policy? Policy Studies, 35(3), 221-245. doi. 10.1080/01442872.2014.886680

Hafeez Siddiqui, S., & Mujtaba Nawaz Saleem, H. (2010). Services‐led industrial policy for inclusive growth and competitiveness. Competitiveness Review, 20(2), 166-181. doi. 10.1108/10595421011029875

Hatta, T. (2017). Competition policy vs. industrial policy as a growth strategy. China Economic Journal, 10(2), 162-174. doi. 10.1080/17538963.2017.1321216

Hirschman, A.O. (1972). The Strategy of Economic Development (3rd print edition). New Haven: Yale University Press.

Hodgson, G.M., & Lamberg, J.-A. (2018). The past and future of evolutionary economics: Some reflections based on new bibliometric evidence. Evolutionary and Institutional Economics Review, 15(1), 167-187. doi. 10.1007/s40844-016-0044-3

Iansiti, M., & Levien, R. (2004a). Strategy as ecology. Harvard Business Review, 82(3), 68–81.

Iansiti, M., & Levien, R. (2004b). The Keystone Advantage: What the New Dynamics of Business Ecosystems Mean for Strategy, Innovation, and Sustainability. Boston, Mass: Harvard Business School Press.

Ito, K., & Shimizu, J. (2015). Industry-level competitiveness, productivity and effective exchange rates in East Asia. Asian Economic Journal, 29(2), 181–214. doi. 10.1111/asej.12054

Köhler, J. (2012). A comparison of the neo-Schumpeterian theory of Kondratiev waves and the multi-level perspective on transitions. Environmental Innovation and Societal Transitions, 3, 1-15. doi. 10.1016/j.eist.2012.04.001

Kostadinović, I., Kostić, Z., & Ilić, I. (2015). Competitiveness and developmental trends of the new industrial policy of the Republic of Serbia. Facta Universitatis, Series: Economics and Organization, 12(2), 129-142.

Krueger, A.O. (1974). The political economy of the rent-seeking society. The American Economic Review, 64(3), 291-303.

Krueger, A.O. (1990). Government failures in development. The Journal of Economic Perspectives, 4(3), 9–23.

Krugman, P. (1994). Competitiveness: A dangerous obsession. Foreign Affairs, 73(2), 28-44. doi. 10.2307/20045917

Krugman, P. (1996). Making sense of the competitiveness debate. Oxford Review of Economic Policy, 12(3), 17-25. doi. 10.1093/oxrep/12.3.17

Kundera, J. (2015). Economic policy during the great depression and the crisis after 2008. Journal of Economics Library, 2(4), 301-320. doi. 10.1453/jel.v2i4.423

Labory, S., & Bianchi, P. (2014). The institutional framework of Industrial policies. No. 2014203 Working Paper. University of Ferrara, Department of Economics. [Retrieved from].

Lall, S. (2004). Reinventing industrial strategy: The role of government policy in building industrial competitiveness (No.28). G-24 Discussion Papers, United Nations Conference on Trade and Development. [Retrieved from].

Langley, A., & Sloan, P. (2011). Organizational change and dialectic process. In D.M. Boje, B. Burnes, & J. Hassard (Eds), The Routledge Companion to Organizational Change (pp.261–275). London; New York: Routledge.

Langot, F., & Petit, P. (2015). L’évaluation des politiques publiques. Une introduction. Revue française d’économie, 30(1), 3-11. doi. 10.3917/rfe.151.0003

Lauridsen, L.S. (2018). New economic globalization, new industrial policy and late development in the 21st century: A critical analytical review. Development Policy Review, 36(3), 329–346. doi. 10.1111/dpr.12299

Lin Yifu, J. (2013). The Industrial Policy Revolution I: The Role of Government Beyond Ideology. Basingstoke, UK: Palgrave Macmillan.

Loasby, B.J. (2015). Ronald Coase’s theory of the firm and the scope of economics. Journal of Institutional Economics, 11(2), 245–264. doi. 10.1017/S1744137414000265

Maincent, E., & Navarro, L. (2006). A policy for industrial champions: From picking winners to fostering excellence and the growth of firms. Office for Official Publications of the European Communities. [Retrieved from].

Mann, S. (Ed.). (2011). Sectors Matter! Exploring Mesoeconomics. Heidelberg: Springer.

Mazzucato, M., Cimoli, M., Dosi, G., Stiglitz, J. E., Landesmann, M. A., Pianta, M., … Page, T. (2015). Which industrial policy does Europe need? Intereconomics, 50(3), 120-155. doi. 10.1007/s10272-015-0535-1

Meyer, C., & Davis, S.M. (2003). It’s Alive: The Coming Convergence of Information, Biology, and Business. New York: Crown Business.

Meyer-Stamer, J. (1998). Industrial policy for competitiveness and sustainable development. CompETE: Competitiveness, Employment, Technology and Environment, Working Paper No.7. [Retrieved from].

Momaya, K. (1998). Evaluating international competitiveness at the industry level. Vikalpa, 23(2), 39–46. doi. 10.1177/0256090919980206

Moore, J. (1993). Predators and prey: A new ecology of competition. Harvard Business Review, 71(3), 75–86.

Morabito, J., Sack, I., & Bhate, A. (2018). The basics of design in the knowledge era: Dialectic and synthesis. In Designing Knowledge Organizations: A Pathway to Innovation Leadership (pp.74-77). New Jersey, US: John Wiley & Sons.

Myrdal, G. (1972). Economic Theory and Under-Developed Regions. London: Methuen.

Naudé, W. (2010). Industrial Policy: Old and New Issues, Working Paper No.2010, 106). World Institute for Development Economics Research. [Retrieved from].

Negoita, M. (2014). Globalization, state, and innovation: An appraisal of networked industrial policy. Regulation & Governance, 8(3), 371–393. doi. 10.1111/rego.12033

Nolan, P. (2014). Globalisation and industrial policy: The case of China. The World Economy, 37(6), 747–764. doi. 10.1111/twec.12197

Norrie, A. (2009). Dialectic and Difference: Dialectical Critical Realism and the Grounds of Justice. London; New York: Routledge.

OECD. (2009). Competition policy, industrial policy and national champions. Roundtable on Competition Policy, Industrial Policy and National Champions. Global Forum on Competition. [Retrieved from].

Olczyk, M. (2016). International competitiveness in the economics literature: A bibliometric study. Athens Journal of Business & Economics, 2(4), 375–388. doi. 10.30958/ajbe.2.4.3

O’Sullivan, E., Andreoni, A., López-Gómez, C., & Gregory, M. (2013). What is new in the new industrial policy? A manufacturing systems perspective. Oxford Review of Economic Policy, 29(2), 432–462. doi. 10.1093/oxrep/grt027

Pack, H. (1993). Productivity and industrial development in sub-Saharan Africa. World Development, 21(1), 1–16. doi. 10.1016/0305-750X(93)90133-T

Pack, H. (2000). Industrial policy: Growth elixir or poison? The World Bank Research Observer, 15(1), 47–67.

Peneder, M. (2017). Competitiveness and industrial policy: From rationalities of failure towards the ability to evolve. Cambridge Journal of Economics, 41(3), 829-858. doi. 10.1093/cje/bew025

Penrose, E.T. (1952). Biological analogies in the theory of the firm. The American Economic Review, 42(5), 804–819.

Pianta, M. (2014). An industrial policy for Europe. Seoul Journal of Economics, 27(3), 277-305.

Pitelis, C. (2014). Rejuvenating ‘old Europe’: Towards a strategy for reindustrialisation and sustainable competitiveness. Contributions to Political Economy, 33(1), 69-98. doi. 10.1093/cpe/bzu009

Porter, M. (1990). The Competitive Advantage of Nations. New York: Free Press.

Porter, M. (1998). Competitive Strategy: Techniques for Analyzing Industries and Competitors. New York: Free Press.

Porter, M., & Linde, C. van der. (1995). Toward a new conception of the environment-competitiveness relationship. Journal of Economic Perspectives, 9(4), 97–118. doi. 10.1257/jep.9.4.97

Prebisch, R. (1959). Commercial policy in the underdeveloped countries. The American Economic Review, 49(2), 251–273.

Ramos, J. (1997). Industrial Policy and Competitiveness in Open Economies. Economic Commision for Latin America and the Caribbean, United Nations: Division of Production, Productivity and Management, Santiago, Chile. [Retrieved from].

Robert, V., Yoguel, G., & Lerena, O. (2017). The ontology of complexity and the neo-Schumpeterian evolutionary theory of economic change. Journal of Evolutionary Economics, 27(4), 761-793. doi. 10.1007/s00191-017-0512-x

Rodrik, D. (2009). Industrial policy: Don’t ask why, ask how. Middle East Development Journal, 1(1), 1-29. doi. 10.1142/S1793812009000024

Rosales, O. (1994). Industrial policy and promotion of competitiveness. Cepal Review, 53, 59-80.

Rosenstein-Rodan, P.N. (1943). Problems of industrialisation of Eastern and South-Eastern Europe. The Economic Journal, 53(210/211), 202–211. doi. 10.2307/2226317

Rugman, A.M. (1992). Porter takes the wrong turn. Business Quarterly, 56(3), 59–64.

Scherer, A.G., Palazzo, G., & Matten, D. (2014). The business firm as a political actor: A new theory of the firm for a globalized world. Business & Society, 53(2), 143–156. doi. 10.1177/0007650313511778

Schwab, K. (2016). The Fourth Industrial Revolution. New York: Crown Business.

Scott, B.R., & Lodge, G. C. (1985). U.S. competitiveness in the world economy. The International Executive, 27(1), 26–26. doi. 10.1002/tie.5060270112

Siddiqui, K. (2017). Globalisation, trade liberalisation and economic development in the developing countries: An overview. Journal of Economics Library, 4(4), 514–529. doi. 10.1453/jel.v4i4.1486

Spulber, D.F. (2007). Global Competitive Strategy. Cambridge: Cambridge University Press. doi. 10.1017/CBO9780511841651

Storchevoi, M.A. (2015). The theory of the firm and strategic management. Problems of Economic Transition, 57(9), 1–19. doi. 10.1080/10611991.2014.1088357

Teece, D.J. (2016). Dynamic capabilities and entrepreneurial management in large organizations: Toward a theory of the (entrepreneurial) firm. European Economic Review, 86, 202–216. doi. 10.1016/j.euroecorev.2015.11.006

Teece, D.J. (2017). A capability theory of the firm: An economics and (Strategic) management perspective. New Zealand Economic Papers, 53(1), 1-43. doi. 10.1080/00779954.2017.1371208

Tiemstra, J.P. (1994). Competitiveness and industrial policy. International Journal of Social Economics, 21(8), 30–42. doi. 10.1108/03068299410065403

Valentinov, V. (2015). Demand, supply, and sustainability: Reflections on Kenneth Boulding’s evolutionary economics. Society & Natural Resources, 28(11), 1216-1232. doi. 10.1080/08941920.2015.1024369

Vlados, Ch., & Katimertzopoulos, F. (2018). Assessing meso and micro-competitiveness boosting policies, in Stra.Tech.Man Terms. International Journal of Business and Social Research, 8(9), 1-15. doi. 10.18533/ijbsr.v8i9.1127

Vlados, Ch., Deniozos, N., Chatzinikolaou, D., & Demertzis, M. (2018a). Perceiving competitiveness under the restructuring process of globalization. International Journal of Business and Management, 13(8), 135-153. doi. 10.5539/ijbm.v13n8p135

Vlados, Ch., Deniozos, N., Chatzinikolaou, D., & Demertzis, M. (2018b). Towards an evolutionary understanding of the current global socio-economic crisis and restructuring: From a conjunctural to a structural and evolutionary perspective. Research in World Economy, 9(1), 15-33. doi. 10.5430/rwe.v9n1p15

Vlados, Ch., Katimertzopoulos, F., & Blatsos, I. (2019). Innovation in Stra.Tech.Man (strategy-technology-management) terms. Journal of Entrepreneurship and Business Innovation, 5(2), 1–26. doi. 10.5296/jebi.v5i2.13477

Vlados, Ch. (2004). La dynamique du triangle stratégie, technologie et management: L’insertion des entreprises Grecques dans la globalisation. Thèse, Paris 10. [Retrieved from].

Vlados, C. (2005). The insertion of Greek firms into globalization: The dynamics of the triangle of strategy, technology and management. Presented at the Managing Global Trends and Challenges in a Turbulent Economy, University of the Aegean, Department of Business Administration. [Retrieved from].

Winter, S.G. (2017). Pursuing the evolutionary agenda in economics and management research. Cambridge Journal of Economics, 41(3), 721–747. doi. 10.1093/cje/bex009

Witt, U. (2006). Evolutionary concepts in economics and biology. Journal of Evolutionary Economics, 16(5), 473–476. doi. 10.1007/s00191-006-0034-4

Wolfe, N. (2011). The Living Organization: Transforming Business to Create Extraordinary Results. Vancouver, WA: Quantum Leaders Publishing.

Wolfe, N.S. (2012). The evolving corporate model—From machine to living organization. Employment Relations Today, 39(1), 23–30. doi. 10.1002/ert.21351

World Economic Forum. (2016). The future of jobs: Employment, skills and workforce strategy for the fourth industrial revolution. Global Challenge Insight Report. Geneva, Switzerland: World Economic Forum. [Retrieved from].

Yazdani, N., & Mamoon, D. (2018). The economics and philosophy of globalization. Journal of Economics Library, 5(3), 221-228. doi. 10.1453/jel.v5i3.1724

Zeleny, M. (1980). Autopoiesis: A theory of living organizations. New York, N.Y: Elsevier Science Ltd.

Żmuda, M. (2017). Towards a taxonomy of international competitiveness. Journal of Management and Business Administration. Central Europe, 25(2), 97-116. doi. 10.7206/jmba.ce.2450-7814.204



  • There are currently no refbacks.


Journal of Economics Library - J. Econ. Lib. - JEL -

ISSN: 2149-2379

Editor: Secretarial:   Istanbul - Turkey.

Copyright © KSP Library