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Escaping the middle-income technology trap: A comparative analysis of industrial policies in China, Brazil and South Africa

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  • Andreoni, Antonio
  • Tregenna, Fiona

Abstract

Instead of catching up with advanced economies, most middle-income countries have remained stuck in a middle-income trap. We identify and analyse the triple challenges of ‘breaking into’ the global economy, ‘linking up’ into global value chains while ‘linking back’ to the local production system, and ‘keeping pace’ with technological change and innovation. We focus specifically on what we term the ‘middle-income technology trap’: specific structural and institutional configurations that are not conducive to increasing domestic value addition and to sustained industrial and technological upgrading. We explore this through case studies of China, Brazil and South Africa and the analysis of the evolution of their industrial policies and specific institutions, specifically InnoFund model in China, the Embrapa system in Brazil, and the Manufacturing Competitiveness Enhancement Programme in South Africa. Industrial policy implications for middle-income countries in particular, and for developing countries more widely, are finally discussed.

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  • Andreoni, Antonio & Tregenna, Fiona, 2020. "Escaping the middle-income technology trap: A comparative analysis of industrial policies in China, Brazil and South Africa," Structural Change and Economic Dynamics, Elsevier, vol. 54(C), pages 324-340.
    • Handle: RePEc:eee:streco:v:54:y:2020:i:c:p:324-340
    DOI: 10.1016/j.strueco.2020.05.008
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    6. Nomaler, Önder & Spinola, Danilo & Verspagen, Bart, 2021. "Demand-led industrialisation policy in a dual-sector small balance of payments constrained economy," MERIT Working Papers 2021-038, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
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    18. Decheng Fan & Kairan Liu, 2021. "The Relationship between Artificial Intelligence and China’s Sustainable Economic Growth: Focused on the Mediating Effects of Industrial Structural Change," Sustainability, MDPI, vol. 13(20), pages 1-15, October.
    19. R, Rekha & M, Suresh Babu, 2022. "Premature deindustrialisation and growth slowdowns in middle-income countries," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 377-389.
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