The relevance of new industrial policy thinking to Argentina

Abstract

This thesis generates insights into the re-conceptualisation and revaluation of industrial policy (IP) as a legitimate tool of economic policy in the context of developing countries. It draws upon what I call the New Industrial Policy (NIP) thinking, which is based on institutionalist and evolutionary economics concerned with both 'the innovation, learning and knowledge triad' and the spatialisation of IP The NIP thinking asserts the importance of learning and innovation, the 'power of economies of association' and 'the power of place' as key sources of competitive advantage. These three propositions are evaluated through empirical research which is based on the Argentinean experience in light of the failure of the last neoliberal programme implemented in the country (1991-2001). Specifically, the research focuses on a regional economy in which there exists both a cluster of SMEs and a group of institutions concerned with firm competitiveness. This thesis makes three main contributions to re-conceptualise the NIP thinking in the context of economies affected by economic decline. First, it identifies key factors that explain why the learning and innovation economy has less relative importance in these economies (if compared with firms in more developed economies), by arguing that the learning and innovation require a minimal threshold of resources and accumulated capabilities that the SMEs in development countries often do not have. Secondly, it explains why the powers of place and the economies of associations are only marginally exploited by firms due to the marked influence of restrictions at micro-, meso- and macro-economic levels. Finally, despite these restrictions, this research reveals that some emerging processes of change in individual firms and institutions have recently occurred which are in line with the assumptions forwarded by the NIP thinking. I conclude that in the interstices of the Argentine economic policy there is a case to consider the new IP ideas.