This book highlights the continuous relevance of industrial development and industrial policy in countries' development strategies. In the early post-war years it seemed that the recipe for development was a relatively straightforward one. Countries had to achieve structural change, shifting resources from agriculture to industry. Success in manufacturing was considered to be the key to economic development. Some countries have achieved economic success in this fashion. They started out with labour-intensive manufacturing invested heavily in human and physical capital accumulation. In due cour ... More

This book highlights the continuous relevance of industrial development and industrial policy in countries' development strategies. In the early post-war years it seemed that the recipe for development was a relatively straightforward one. Countries had to achieve structural change, shifting resources from agriculture to industry. Success in manufacturing was considered to be the key to economic development. Some countries have achieved economic success in this fashion. They started out with labour-intensive manufacturing invested heavily in human and physical capital accumulation. In due course they also achieved technological upgrading and succeeded as industrial exporters. In the course of two generations, some countries have transformed themselves from low-income to high-income economies. What about the prospects for the future? The research here implies that manufacturing will continue to be important in the 21st century. This is the case in Brazil, China, and India and in a great variety of countries in Asia, Latin America, and Africa. There is also a rediscovery of the importance of manufacturing in the advanced service economies. There are many reasons for this: technological progress, economies of scale and scope, learning and industrial innovation in industrial activities. The importance of the many inter-sectoral linkages in industry is crucial in terms of the development of human capital. Industry is characterized by numerous knowledge spillovers both upstream and downstream in terms of research, skills, and the continuous upgrading of inputs ranging from raw materials, equipment to services. Industry will continue to play a key role in most countries' development.