Technical Change, the Shifting ‘Terrain of the Industrial’, and Digital Industrial Policy

Technical change is a major driver of structural transformation and industrial mutations within and across sectors of the economy. We show how, by deploying different concepts of sector—commodity/product, production/technology, or location-based taxonomies—we can better capture the heterogeneity of production activities, shifting sectoral boundaries, industrial mutations, sources of technical change, and non-linear patterns of structural change. These are important dimensions for industrial policy targeting. We analyse these technological dynamics with an industrial ecosystem framework structured around several sectoral value chains underpinned by different technology platforms. Within this framework, we highlight the role of digital technologies alongside other key enabling technologies and discuss technological change trajectories and cross-sectoral diversification patterns. Against this background, we discuss the specific challenges of deploying digital technologies effectively faced by developing countries. To address these challenges and capture windows of digital opportunity, industrial policy must be articulated along both sectoral and cross-sectoral mission-oriented strategies.

Business · Commodity · Digital transformation · Diversification (marketing strategy) · Economic growth · Economics · Emerging technologies · Industrial organization · Industrial policy · Industrial production · International trade · Product (mathematics) · Production (economics) · Productivity · Technical change · Technological change · Computer Science · Economic and Technological Innovation · Innovation and Knowledge Management · Marketing · University-Industry-Government Innovation Models