Competitive Industries

In geometry, three points define a plane. In journalism, three events establish a trend. In public policy, three strategy forums might not conclusively confirm a consensus – but a recent think-tank trifecta suggests that a dramatic change is taking shape in the policy community’s thinking about economic competitiveness.

Thrice in recent weeks, activist strategies to inspire innovation and growth have been the front-and-center topic in major policy conferences – suggesting that an energetic new Competitiveness Consensus, applicable to developing and developed countries alike, is emerging among economic thought-leaders.

Judging by the three forums, not just academic scholars, but policymakers and lawmakers, now seem eager to apply the lessons from a slew of analyses  advocating industry-focused and productivity-driven growth strategies, taking pragmatic steps to invest in stronger competitiveness. In a global economy starved for growth  and desperate for job creation, the focus on activist policies – including targeted interventions at the industry level – is relevant to countries large and small, developed and developing.

One of the year’s largest conferences focusing on international development, European Development Days (EDDs) will be convened by the European Commission this week in Brussels, bringing together about 6,000 development professionals to discuss the theme, “Supporting inclusive and sustainable growth for human development.” A large contingent from the World Bank Group will take part in the array of EDDs panels and seminars – many of them to be livestreamed – on such topics as the global food crisis, environmental sustainability and resilience, women’s entrepreneurship and inclusive urbanization.

Success doesn’t just happen automatically – not in the economy, and not in any competitive arena of life. But by focusing your resources realistically in the areas of your greatest strength, you can maximize your chances of coming out on top. Perhaps in some long-vanished world of effortless monopolies and protected markets, passivity might once have been enough – but in a world of relentless global competition, a lazy laissez-faire abdication cannot deliver optimal results.

That lesson has come through clearly amid these elegiac end-of-summer days, as the world continues to bask in the Olympic afterglow of the Summer Games in London. The games lifted the spirits of sports-watchers worldwide – and the postgame analysis of just how the host country, Great Britain, ran up its highest medal count in 104 years has provoked some intriguing ideas about creating an “Olympic effect” for economic development.

Economic development succeeds best when public policy and the private sector work in harmony, not at cross-purposes. That’s the idea at the heart of the efforts by two former Chief Economists of the World Bank, Justin Lin and Joseph  E. Stiglitz, to promote a renewed embrace of Industrial Policy, as Tuesday’s blog post described. Exploring their ideas on how activist government policies can help shape development, their recent International Economic Association (IEA) roundtable and forum at the Bank was a reminder that there are many variations on the Industrial Policy theme.

Industrial Policy practitioners, learning from experience, have adjusted many of their old tactics and techniques. Using a modernized, market-sensitive policy toolkit, a promising new approach is now being implemented by the Competitive Industries Practice within the Bank’s Financial and Private Sector Development Network.