Industrial policy matters from "summary" of The Industrial Policy Revolution II by J. Esteban,J. Stiglitz,Justin Lin Yifu
Industrial policy matters because it is essential for shaping the economy in a way that promotes sustainable and inclusive growth. By guiding the allocation of resources, industrial policy can influence the development of key sectors and technologies that are crucial for long-term prosperity. This policy tool plays a critical role in addressing market failures and ensuring that the benefits of economic growth are shared more equitably across society. Moreover, industrial policy is not just about picking winners and losers in the market. It is about creating an enabling environment that encourages innovation, entrepreneurship, and investment. By providing targeted support to strategic industries and fostering the conditions for them to thrive, industrial policy can help drive productivity gains and enhance the competitiveness of the economy as a whole. At the same time, industrial policy is also important for addressing structural challenges and promoting structural transformation. By targeting specific sectors and regions that have the potential for growth and job creation, industrial policy can help to diversify the economy and reduce its vulnerability to external shocks. This can lead to more resilient and sustainable economic development over the long term. Furthermore, industrial policy is crucial for addressing the pressing social and environmental challenges that confront many economies today. By promoting the development of green industries and investing in social infrastructure, industrial policy can help to create a more sustainable and inclusive economy that meets the needs of both current and future generations. This approach can also help to build a more resilient economy that is better able to withstand global challenges such as climate change and pandemics.- Industrial policy matters because it is a powerful tool for shaping the economy in a way that promotes sustainable and inclusive growth. By targeting strategic sectors, fostering innovation and entrepreneurship, addressing structural challenges, and promoting social and environmental objectives, industrial policy can help to build a more resilient and prosperous economy for all.
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