Global Dimensions: Competition and Cooperation

COMPARISONS IN A GLOBAL ECONOMY

From an international perspective, understanding the benefits and challenges of programs to support industry is important insofar as they have been and remain a central element in the national development strategies of both industrial and industrializing countries.

Governments around the world believe the composition of their economy matters. Accordingly, they have shown a great deal of imagination in their choices of mechanisms designed to support high-technology industries. To support industries and industrial companies based on new technologies many governments have active R&D programs and incentives. Some countries provide major financial support directly to national firms. In some cases this is done overtly through substantial direct grants, loans, loan guarantees, and public equity investments. In other cases, support is provided more opaquely through mechanisms such as tax deferrals, regional aid, worker training, or infrastructure development.1 Some countries employ, as well, a wide range of trade policies from trade regulations designed to protect domestic products from foreign competition to tax rebates intended to stimulate the export of selected domestic products. The growing recognition of the role of science and high-technology industries in encouraging economic growth has led many governments to provide substantial R&D funding for enterprises of particular interest. In addition, as Figure 5 shows, many countries have substantially increased their overall national expenditures on R&D.

1  

For an overview of the policy goals and instruments, see National Research Council, Conflict and Cooperation, 1996, op. cit., Box B, pp. 39-40. See also Martin Brown, Impacts of National Technology Programs, Paris: OECD, 1995, especially Chapter 2.



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