ABSTRACT
The newly industrializing countries which have emerged in the 1970s have given an additional impulse to the development of industrial policy in the OECD area. Even with full employment and fast growth, public policy needs to help pay some of these costs and to facilitate the adaptation of our economies to the new patterns of industrialization in the world. With unemployment and slow growth, there are yet greater pressures toward industrial policy, both with the positive aim of adapting to new and more-viable economic structures and, negatively, in defending the old ones. Industrial policies concern the size and behavior of firms. The chapter focuses on labor-intensive and capital-intensive sectors, promotional policies are likely to relate not just to Research and Development (R and D) but also to incentives for new investments and job creation in general sectors. R and D-intensive industries are some, such as aircraft, nuclear power, and data processing, financed only with public support.
