The sources of industrial leadership: A perspective on industrial policy

This essay reports on a historical study of the evolution of seven major hi gh-tech industries. The aim was to identify key factors leading to the emer gence of industrial leadership. A few lessons have come to the fore. First, firms that become dominant on world markets first became strong in their h ome market. Second, important sources of comparative advantage often reside in sectoral support systems e.g. a university especially strong in organic chemistry. As to the debate about industrial policy, history shows many in stances that support the case for targeted support. On the other hand, we s hould not ignore that the success of industrial policy depends to a large e xtent on the interaction between firms and the relevant government agencies .