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Heavy and chemical industry drive

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Frame of Image e.g., machinery & equipment). Close consultation between the government and the private sector is key to solving information and incentive problems in this stage, when countries try to upgrade their comparative advantage.
1
The Product Space and the Wealth of Nations
• Product space can be arranged like a forest:
– A sparse periphery where products connect poorly with others – A dense core where products are produced with capabilities used in other products as well
•
Development involves producing new things – Countries tend to move through the product space by developing goods they currently produce – Countries can move from the periphery to the core “only by traversing empirically infrequent distances”
Source: Hidalgo, Klinger, Barabasi, and Hausmann (2007)
Industrial Policy: Literature Review
Sc h o o l s Developmental state (Johnson 1982; Amsden 1989; Wade 1990) Rent-seeking (Krueger 1974) Self-discovery (Rodrik 2007) New structural economics (Lin and Monga 2010) Product space (Hidalgo et al. 2007) Strategic risk-taking Insights on sector identification and promotion Government picks winners (in consultation with business). Government can’t and shouldn’t pick winners. (Self-fulfilling incompetence and corruption?) W inners pick themselves, with help from search and problem-solving networks. Latecomers can pick winners in mature industries by benchmarking early movers (based on CA). W inners are readily identifiable, but how do we go from the periphery to the core? W inner


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Title Heavy and chemical industry drive
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Material Type Proceedings
Author(English)

Lim, Wonhyuk

Author(Korean)

임원혁

Publisher

[Seoul]:KDI

Date 2012-08
Pages 9
Subject Country South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Industry and Technology < Science/Technology
Holding KDI

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