Assessing the Performance of Infant Industries

Book excerpt: This paper reports findings from a literature survey to learn about the performance of infant industries in less developed countries. Remarkably little direct evidence was uncovered about the costs and benefits of developing these industries. But the findings indicate that infant firms have experienced relatively slow productivity growth. Thus many infants started some time ago apparently have so far failed to achieve international competitiveness. The findings suggest tentative conclusions about the causes of the failure. Insufficient productivity growth to achieve and maintain competitiveness seems to reflect the absence of sustained efforts to acquire and use the capabilities necessary for continuous technological change. Far more than stemming from experience alone, these capabilities appear to increase to needed levels only through consciously allocating resources to acquire them.