ABSTRACT
This chapter examines the role and contribution of transnational corporations in promoting industrial progress in developing economies. It reviews the macro-economic context of institutions, and the state as agent of economic change in industrial progress, both in static and dynamic contexts. The chapter examines dynamic learning, adaptation and innovation as keys to industrial progress. The triad of institutions, public policy and the enterprise sector can play a leading role in mitigating market failures within and between firms as well as in the development and diversification of industrial clusters. Co-ordination between individuals and institutions and between institutions themselves under strategic uncertainty is often either developed through conventions, as in standards of practice, or socially enforced. The competitive ability of national industries depends on endowed factors such as infrastructure, human resources, and scientific and technological research and development, and the existence of related industries, especially the capital goods industries.
