Іnternational experience of state policy in the field of industrial development .pptx

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1. Іnternational experience of state policy in the field of industrial development

2. ‹#› Іnternational experience of state policy in the field of industrial development Lesson objectives: Understand the key elements of industrial policy used in different countries. To analyze examples of successful government support for industrial development in Japan, South Korea and Germany. To determine the possibilities of adapting international experience for Kazakhstan.

3. ‹#› Basic concepts of industrial policy Industrial Policy is defined as the strategic effort by the state to encourage economic transformation, i.e. the shift from lower to higher productivity activities, between or within sectors. Specifically, industrial policy refers to “any type of selective government intervention or policy that attempts to alter the structure of production in favour of sectors that are expected to offer better prospects for economic growth in a way that would not occur in the absence of such intervention in the market equilibrium” ( Pack and Saggi, 2006 ). Key tools : Financial support (subsidies, tax incentives, grants). Tariff and non-tariff measures to protect domestic markets. Support for R&D (research and development). Government investments in infrastructure and education.

4. ‹#› Basic concepts of industrial policy Vertical Policy : Targeted support for specific industries or companies (e.g., the automotive sector, technology). Horizontal Policy : Broader measures aimed at improving the business environment for all sectors (e.g., innovation promotion, improving regulations). Types of Industrial Policy:

5. ‹#› Basic concepts of industrial policy https://youtu.be/73DR1TOKcLA?si=wZALA8baigJ5FU1G

6. ‹#› Japan’s Industrial Policy: MITI and Industrial Growth Japan's industrial policy was a government strategy designed to promote economic growth and international competitiveness after World War II. The government worked closely with private companies to identify promising industries and provide them with support, such as loans, tax breaks, and government contracts. Targeted Industrial Development : MITI identified strategic industries (e.g., automobiles, shipbuilding, and electronics) and directed resources toward their development. Japan became known for focusing on long-term goals. Technology Promotion : Japan encouraged domestic firms to adopt cutting-edge foreign technologies, and the government invested in R&D to improve these technologies. Export-Led Growth : MITI helped Japanese companies become competitive internationally by promoting exports and ensuring that industries developed with a global market in mind.

7. ‹#› Japan’s Industrial Policy: MITI and Industrial Growth Labor Relations and Workforce Development Industrial Protectionism and Trade Regulation. Japan used trade protection to shield emerging industries from foreign competition. The government employed tariffs, quotas, and import restrictions to allow domestic firms to grow before exposing them to global market forces. Japan limited imports of goods that competed with its developing industries, allowing domestic firms time to become competitive. As industries matured and became competitive, Japan slowly opened up its economy, integrating with global markets Japan’s industrial policy included a strong focus on building a highly skilled and loyal workforce. The country developed a culture of lifelong employment, particularly in large firms, and promoted worker training and education. STEM Education and Cooperative Labor Relations.

8. ‹#› South Korea’s Industrial Miracle: The Role of Chaebols South Korea’s rapid economic growth is often called "The Miracle on the Han River." The government played a pivotal role in this transformation by fostering the growth of large, family-owned business conglomerates known as chaebols . The word ‘chaebol’ (재벌) translates literally to ‘rich family’ or ‘money faction’. A s much as 80% of South Korea’s GDP is derived from chaebols. One need look no further than Samsung, the largest of the chaebols, for more evidence of this fact: it is solely responsible for 20% of South Korea’s exports.

9. ‹#› South Korea’s Industrial Miracle: The Role of Chaebols Role of Chaebols: Large-Scale Investment Diversification and Vertical Integration Export Leadership Innovation and Global Expansion Role of the Government: Strategic Direction and Planning (Five-Year Economic Development Plan) Strategic Financing and State Control of Resources Diplomatic and trade support R&D and Education Investment South Korea’s industrial success is the result of coordinated efforts between the government and chaebols. The success of this model lies in the close alignment of national policy and corporate objectives, which allowed South Korea to transition from a developing nation to a global economic powerhouse.

10. ‹#› https://youtu.be/aqMM7GM5alw?si=XuZbZzOz7_jBJ1tG

11. ‹#› Task: Interactive Policy Simulation for Kazakhstan: Five-Year Industrial Plan Scenario: Kazakhstan’s government is launching a new industrial plan aimed at boosting economic growth, diversifying the economy, and reducing dependency on natural resources. The goal is to create a balance between supporting large industries and fostering innovation in small and medium-sized enterprises. Each student group will represent a different stakeholder and propose policies that contribute to this plan. The class will negotiate to create a final policy mix that best suits Kazakhstan’s economic structure.

12. ‹#› Ministry of Economy Ministry of Education Large Businesses Small and Medium Enterprises Each group must research and propose policies based on the industrial strategies of South Korea and Japan, applying them to Kazakhstan’s unique context. Address both positive and negative effects and provide justifications for why certain policies would work or face challenges in Kazakhstan.

13. ‹#› Ministry of Economy Goal: Create policies that boost GDP and diversify Kazakhstan’s industrial base. Key Considerations: - Export-Oriented Growth : How would focusing on exporting manufactured goods and services work for Kazakhstan? What industries (e.g., mining, agriculture, energy) could benefit from this approach? - Industrial Clusters: Would creating specialized industrial zones help develop manufacturing or technology sectors in Kazakhstan?

14. ‹#› Ministry of Education Goal: Develop policies that improve STEM education, R&D, and workforce capabilities to support industrial development . Key Considerations: - STEM and R&D Investment: How can Kazakhstan replicate Japan’s focus on technology-driven industrial growth? - Workforce Development: What initiatives can Kazakhstan undertake to develop a highly skilled workforce?

15. ‹#› Large Businesses Goal: Advocate for policies that support the growth and global competitiveness of large industries in Kazakhstan. Key Considerations: - Chaebols: How can large conglomerates in Kazakhstan be supported to drive economic growth and global competitiveness? - Government Support for Large Enterprises: What financial incentives (e.g., subsidies, low-interest loans) can be offered to large businesses to boost productivity?

16. ‹#› Small and Medium enterprises (SMEs) Goal: Advocate for policies that foster the growth of SMEs, driving innovation and regional economic development. Key Considerations: - Innovation Ecosystems : How can Kazakhstan create innovation hubs and start-up ecosystems similar to Japan, encouraging entrepreneurship and SME growth? - Support for SMEs: What kinds of financial support or regulatory easing can help SMEs scale their operations?