Transition Economics meets New Structural

Economics

Prof. Slavo Radosevic

Concluding remarks to the workshop,

London, 25/26. June 2013

Context

• Structural reforms and horizontal policies: old man

• Big push and old style picking winners policies: straw man

• New industrial policy/new structural economics/smart specialisation: new man

Ideas, models and their limits

• Ideas rule the world?

• What about pre-mature ideas? We are in fertilisation period? Pre-paradigmatic stage?

• Policy process and institutional context /fragmented or cohesive policy space/ non-market articulation of market/ important to final outcomes,but models still matter

Neo-schumpeterian insight: policies should depend on distance of

country from technology frontier

• Maybe there is not one workable policy model?

• Countries at technology frontier: RD push policies at frontier

• Middle income countries: smart specialisation process

• New structural economics: flying gees model / tandem growth/

Issues for discussion

• Structural reforms and business environment: how to continue along this policy line? How much mileage is there?

• We are all structuralists now! Are we beyond transition economics?

• Complementarities rather than substitutes? Ukraine as example

So far, the policy focus in Ukraine has been on quadrants 1 and 2 i.e. on market enhancing governance reforms and on horizontal or

generic innovation policy measures

Policy choices for industrial upgrading Structural reforms Innovation policy measures Horizontal (generic) Market enhancing

governance reforms (1) (Property Rights; Rule of Law and Effective Contract Enforcement; Minimizing Rent Seeking and Corruption, and Transparent and Accountable Provision of Public Goods)

Horizontal (generic) innovation policy measures (2) (Generic innovation infrastructure; Innovation vouchers; Cooperative R&D programs; RTD tax measures)

Vertical (sector/technology specific)

Sector specific regulatory regimes (sectoral governance) (3) (Sector-specific privatisation rules; Sector-specific price subsides; Sector-specific regimes of licences; Sector-specific local content requirements; Sector-specific FDI promotion programs)

Sector or technology specific innovation policy measures (4) (Sector or technology specific infrastructure; Thematic R&D programs; Technology platforms Technology or sector specific vocational training programs)

Source: Radosevic Sl. (2013) Knowledge Generation and Absorption, Chapter 4 (extended author’s version) in preparation of ‘Ukraine: Innovation Performance Review 2012’, UNECE study, UN Economic Commission for Europe, Geneva