How Nations Succeed: Manufacturing, Trade, Industrial Policy, and Economic Development

A Note on Conventions Used
Acknowledgements
Contents
Abbreviations
List of Figures
List of Tables
Prologue
Part I
	Chapter 1: The Old World Order: Trade Before the Empires on which the Sun Never Set
		1.1 Eurasian Trade: Reverse Flows of Merchandise from Asia Versus Gold from Europe
		1.2 Economics and Commerce in Medieval Europe Prior to European Geographical Explorations
		1.3 The Silk Road and the Spice Route in Medieval Times: The Mediterranean as Part of Global Trade
		1.4 Venice Reaches the Zenith of Power in the Mediterranean
		References
	Chapter 2: The Pre-Industrial New World Order: Colonial Empires on Which the Sun Never Set
		2.1 Winners, Losers, and Definite Losers of the New World Order
		2.2 For Spices and Christians: Portuguese Trade Deficit and Colonization
			Portugal’s Global Expansion
		2.3 Spanish Expansion into the Americas
		2.4 The Colonizer of the New Age: Britain’s Ascendance to a Global Power
			Britain’s Merchant Adventurers: Pioneers of British Global Expansion
			The First Phase of English Global Expansion: Colonization of North America
			The Joint Stock Company, the Crown’s Charter, and the Colonies
			The Second Phase of British Global Expansion: The British East India Company and the Colonization of India
				Britain Gaining Full Control of India
			The Dutch: England’s Friend and Also Foe in the Quest for Domination of Global Trade in the Seventeenth Century
			The Simple Economics of the British Colonies in America
		References
	Chapter 3: British Colonial Empire and Industrial Policy: Protection, Monopolized Trade, and Industrialization
		3.1 Britain’s Trade Prior to the Industrial Revolution
		3.2 The Industrial Revolution and the Expansion of Trade in the Eighteenth Century
		3.3 British Industrial Policies as the Driver of British Industrialization
			Inviting Textile Masters to Britain: Learning and Technology Transfer Before the Industrial Revolution
			Import Substitution and Infant Industry in the Fourteenth Century: Shifting England’s Exports from Raw Wool to Textiles
			British Navigation Acts: Development of British Shipping and Shipbuilding Industries
			Monopolizing the International Trade of Colonies: Running Current Account Surpluses by Prohibiting Manufacturing in the Colonies
			The Triangular Trade
		3.4 India Before and After British Invasion
			Manufacturing ‘Good’ Indians
		3.5 The Story of Cotton: Slaves, India, and British Industrial Revolution
			Banning Imports of Efficient Indian Cotton Textiles
			Turning Britain into a Cotton Textiles Manufacturer
			USA Becomes the Source of Raw Cotton
			Cotton: The Critical Commodity
			Cotton and Slavery
		3.6 Free Trade Agreements, Free Trade of Opium, and the Collapse of China
			Britain Extends Beyond India
			China and Britain
		References
	Chapter 4: How Industrialized Nations Industrialized
		4.1 Hats, Tea, and Liberty: The American Quest for Manufacturing
			What the Colonial Laws Meant for the Colony
			Bad Finance at Home, Bad Taxes in the Colonies
			Founding Fathers of American Manufacturing and the USA
		4.2 Japan’s Industrial Policy and Late Industrialization in the Nineteenth Century
			Frightening Black Ships in Edo
			The Unfair Treaties
			The Coal …
			Japanese Industrialization in the Meiji Period
			Industrial Policies in the Meiji Period
			Japan as an Industrialized Nation
		4.3 French Way of Picking the Winners: Colbert’s Industrial Policies in the Seventeenth Century
			Making France a Textile and Glass Country
			Educational Reforms
			France as an Industrialized Nation
		4.4 Germany: Another Late Industrializer
			Economic Unification, Patriotism, and Industrialization
			Germany as an Industrialized Nation
		4.5 Beginning of Russian Industrialization: Peter the Great’s Great Technology Transfer Story in the Eighteenth Century
			Peter’s Crusade for Inward Technology Transfer
			Russia as an Industrialized Nation
		References
Part II: Manufacturing
	Chapter 5: The ‘Why’ of Manufacturing
		5.1 The ‘Fall’ of Manufacturing
		5.2 Is Manufacturing a Poor Man’s Business?
		5.3 World Trade and Manufactures: What Do Rich and Poor Countries Export?
		5.4 Manufacturing and Growth2
		5.5 Linkages of the Manufacturing Industry
		5.6 Why Then Does the Share of Manufacturing in Output Falls as Economies Grow?
		5.7 The Smile Curve and the ‘New’ Product Cycle: Does All Manufacturing Always Make Money?
		References
	Chapter 6: Global Imbalances: Export-Led Growth Versus Import-Led Slowdown
		6.1 Trade and Macroeconomics
		6.2 Germany and Its Export-Led Growth
		6.3 Why Do Imports Lead to Economic Slowdown and Unemployment: A Simple Explanation by the Macroeconomic Identities
			Employment Effects of Imports
		References
	Chapter 7: Value Added and GDP: The Smart Versus the Donkey
		7.1 Value Added, GDP, Factor Accumulation, and Productivity
		7.2 How to Increase the Value Added and the GDP: The Donkey Work Does Not Do the Work
		7.3 How to Increase the Value Added: The Smart Work
		7.4 Industrial Policy: South Korea’s Smart Work
		References
Part III: Industrial Policy
	Chapter 8: The Industrialization Process: A Streamlined Version
		8.1 The Scientific Revolution and Its Precursors
		8.2 Industrialization
			The Evolution of Industrialization: From ‘First’ to the ‘Fourth’ Industrial Revolution
		8.3 A Streamlined Process of Industrialization3
			Where Is Your Country Located in the Industrialization Process?
		References
	Chapter 9: The Industrial Layer
		9.1 The Industrial Entrepreneur
			The Entrepreneur and Economic Development in the Economic Literature
			The Commercial Entrepreneur and the Industrial Entrepreneur: The Same Breed?
			The Industrial Entrepreneur: Three Case Studies
				The Founder of Sony, Akio Morita (1921–1999)
				Krupp: The Steel Empire of the Nineteenth and Twentieth Century
				The Next Giant: Samsung and Lee Byung-chull
		9.2 Industrial Labour
		9.3 Industrial Finance
		References
	Chapter 10: Industrialization as Capacity Building: Skills, Technical Progress, and Technical Capabilities
		10.1 The Latecomer Industrial (Manufacturing) Firm, Technical Capabilities, and Learning
		10.2 The Industrial Firm as a ‘Learning Firm’
		References
	Chapter 11: The State and State Capacity
		11.1 State Capacity and the Developmental State
		11.2 Steering Capacity
		11.3 Market Failure Versus Government Failure
		11.4 The Educational System
			German Educational System: A Good Case of How Education Supports Business and Industry
		References
	Chapter 12: The ‘How\' of Manufacturing: Industrial Policy
		12.1 Why Industrial Policy in Developing Economies? The Middle-Income Trap
		12.2 Is a Country Certain to ‘Naturally’ Industrialize in the Full Range? General and Sectoral Industrial Policy Along the Industrialization Process
		12.3 How to Pick the Winner? Strategic Manufacturing Sectors
			Economic Value Added Potential
			Learning Depth (Potential): The Firm as a Repository of Knowledge, Skills, and Institutional Capacity
			Technological Depth
			Linkages
		12.4 Sequencing Industrial and STI Policies
		12.5 Development-Based Public Procurement
		References
	Chapter 13: Industrial Policy: Some Case Studies from Today’s World
		13.1 The Nuclear Power Programme: How South Korea Developed Its Indigenous Capabilities in Nuclear Power Generation and Converted It into an Export Industry
			Stage I: The Beginning: Introduction of Nuclear Energy Research and Building Up Manpower and Infrastructure (1956–mid-1960s)
			Stage II: Introduction of Turnkey Power Plants (mid-1960s–mid-1970s)
			Stage III: Localization of Engineering Services and Equipment (mid-1970s–1985)
				Engineering Capabilities
				Manufacturing Capabilities
			Stage IV: Learning by Doing: Furthering the Localization by the Acquisition of Core Technologies (1985–2009)
				Coordination of the Localization Process
				Detailed Design Capabilities
				Furthering the Capabilities
			Stage V: Learning by Exporting (2009 Onwards)
		13.2 How South Korea Developed Its Indigenous Automotive Industry
			Stages of the Development of S. Korea’s Indigenous Automobile Industry: The First Attempts (1960s)
			Long-Term Automobile Industry Promotion Plan (1970s): Local Production and Export Starts
			1980s Onwards: The Global Player
		13.3 Sweden’s Industrial Policy in the Aviation Sector: Saab as a National Champion
			The Driving Force: Industrial Policy in the Defence Sector Spurring the Domestic Industrial Capacity in the Aviation Sector
			Founders of Saab: The Second Driver of Swedish Indigenous Aviation Industry
			Earlier Aircraft Manufactured by Saab
			Venturing into Other Areas: Civilian Aviation, Automotive Sector, and Rifles
		13.4 Airbus: Europe’s Industrial Policy Response to the Domination of the Civilian Aircraft Market by America’s Boeing
			The Background
			The Genesis and the Rise of Airbus
			The Tribulations of Multinational Shareholding
			Economic Impact of Airbus on Europe
		References
	Chapter 14: Putting It All Together: How Nations Succeed Through Industrial Policy?
Correction to: Industrial Policy: Some Case Studies from Today’s World
Correction to: How Nations Succeed
Subject and Place Index
Name Index