ABSTRACT
The drive for greater local competitiveness in a globalizing economy has become the subject of constant discussion in both government and corporate circles. As C. Bellack and J. Cantwell note in their study of latecomer economies, globalization provides countries with new opportunities and new constraints and demands that government learns more about how to develop internal environments within a clear framework of international standards and expectations. The state has a crucial role in helping provide the environments that foster innovation and enable rapid progress. The race to accumulate competitive resources is creating new conditions for partnership between the state and the firm. The ability of the state to influence multinationals' investments is a function of target specificity, policy credibility, and the institutional arrangements necessary to operationalize and manage the policies. Because the state has to focus on the overall development of the economy, the incentives and disincentives on offer depend on its strategic goals.
