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Do Selective Industrial Policies Cause Growth?

– Experiences from Sweden

Questions regarding economic growth are at the top of the economic and political agenda in Sweden today. This report provides an analysis of how selective policies supporting innovation and entrepreneurship have been implemented and their impact on firm performance, growth and competitiveness.

Every year, the Swedish Agency for Growth Policy Analysis (Growth Analysis) produces a book in Swedish under the heading Tillväxtfakta (Growth Facts). A topical issue of relevance for the agency, the government and society is chosen; that issue is then analysed and discussed.

The global slump in economic growth has placed questions regarding economic growth at the top of the economic and political agenda. This report is an English summary and synthesis of the sixth book in this series and provides an analysis of how selective policies supporting innovation and entrepreneurship have been implemented and their impact on firm performance, growth and competitiveness.

This analysis concerns both the role of the government and policies for growth. Like many other countries, Sweden has a range of tools for stimulating innovation and entrepreneurship. However, designing and implementing these interventions to have the desired effects has proven a daunting task.

In the report, we raise a series of questions regarding design and efficiency of selective policies towards innovation and entrepreneurship, paying special attention to policies that target innovative small- and medium-sized firms. How well do the various measures work? On what grounds can selective policies be motivated? What role do evaluations play in policy adaptation and innovation policy?

One conclusion is clear: Little is known about the real effects of how various support schemes actually work. This problem is not unique to Sweden. We therefore believe there is great potential for improvement. In particular, better micro data and more counterfactual evaluations are needed to ensure that feedback and lessons learned from earlier support schemes could be both used and passed on to decision-makers.

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Do Selective Industrial Policies Cause Growth? – Experiences from Sweden

Serial number: Report 2015:07

Reference number: 2015/027

Download the report Pdf, 1.9 MB.

A partial study of the project:

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