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The Effect of Catching Up and Surpassing Industrial Policy on National Technology Development

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DOI: 10.25236/edssr.2020.050

Author(s)

Xianke Li

Corresponding Author

Xianke Li

Abstract

Based on the principle of comparative advantage, developing labor-intensive industries in latecomer countries is conducive to their rapid integration into the international division of labor system. However, it is easy to lead the latecomer countries to fall into the capture type international division system dominated by the technology leading countries. By constructing a simplified game model of technological competition strategy between the two countries, this paper reveals the important role of industrial policy in technological catch-up of latecomer countries. With the increasing contribution of knowledge economy to economic growth, the latecomer countries must formulate industrial policies against comparative advantage, promote the growth of their own independent innovation ability, accelerate the pace of technological upgrading of traditional industries, and enhance their added value in the global value chain.

Keywords

Latecomer countries, Industrial policy, Technology catching up