Innovation and the State: Political Choice and Strategies by Dan Breznitz PDF

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Extra info for Innovation and the State: Political Choice and Strategies for Growth in Israel, Taiwan, and Ireland

Example text

They argue not only that innovation is the main source of long-term economic growth but also that there is a major role for policy in R&D and science. Government has such a major role, they argue, for two reasons: first, the innovation process itself is iterative and cooperative in nature; hence there is a significant role for public actors (Braczyk et al. 1998, Cooke and Morgan 1998, Lester and Piore 2004, Morgan 1997, Piore et al. 1994, Piore and Sabel 1984, Teubal 1996, 2002). Second, building on Arrow’s seminal paper, they argue that scientific research, especially industrial R&D, represents a clear case of market failure.

An example of that kind of a failure would be the state’s ignoring the industry, largely refusing to participate in its growth or to channel the resources necessary to that effect. A second kind of failure occurs when the state actively participates in the creation of the network but then resists relinquishing its power, trying instead to retain its position of power and control, aiming to maintain hierarchical relationships with private industry. Overcoming these dangers is not easy and requires much more than state will.

1985). In order to understand how different policy choices lead to different industrial systems, we need to merge our insights about the plurality of embeddedness models with an understanding of rapid innovation–based industrial production. Although the neo-developmental-state writers claim to explain growth in post-Fordist industries, their argument proceeds without attention to the radical ways in which industrial production has changed since World 19 20 Plurality, Choice, Politics War II. Recall that the old developmental school was built around the coherent Gerschenkronian institutional theory of industrial development in relatively backward societies, and it was built on an understanding of industrial technology and production management.

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