Private and Public Sector Interactions That Encourage Growth-Creating Technological Advance

This paper distinguishes four types of public policies that seek to encourage growth-creating technological advance: technology, R&D, industrial, and science policies. The first three are typically treated under the single heading ‘industrial policy’, which is a source of confusion since each is administered by different agents and in different manners. Evidence of the many failures of industrial policy, as defined here, is often incorrectly assumed by its critics to apply to technology and R&D policies. Evidence for the many successes of technology policy’s symbiotic relation between the public and the private sectors is outlined, although typically ignored by growth theorists. The massive influence of science policy on economic growth, also typically ignored by growth theorists, is a largely unintended byproduct of scientific advance