Innovation and Industrial Policies

1Industrial Policy and Competition

Economic historians generally agree that about nine thousand years ago, the world underwent a first mutation with the beginning of the first agricultural revolution characterized by the domestication of certain animals, which thus allowed mankind to transition from hunter-gatherers into farmers. From the second half of the 18th Century onwards, three industrial revolutions followed one another. The first, generally dated between 1760 and 1840, marked the era of mechanized production with, in particular, the invention of the weaving machine, the steam engine and the construction of the railways. The Second Industrial Revolution, between the end of the 19th Century and the Second World War, allowed mass production thanks to the control of electricity as well as coal and the creation of assembly lines. Finally, from the 1960s onwards, a third industrial revolution took place with electronics and information technology.

It is these developments that make it possible to live better in today’s world than at any other time in history. Today, people are doing better, are richer and live longer, as Angus Deaton (2013) points out. In a striking summary, he notes that “today in sub-Saharan Africa, children are more likely to survive to age 5 than were English children born in 1918” (Deaton 2013, p. 8). The historian David Landes (1988, p. 5) had already marked this progress by indicating the following trait: “The Englishman of 1750 was closer in material ...