Podcast
Questions and Answers
What is an industrial cluster?
What is an industrial cluster?
Which region is mentioned as an example of an industrial cluster?
Which region is mentioned as an example of an industrial cluster?
What is a national industrial policy?
What is a national industrial policy?
Which country privatized state enterprises in the 1990s as part of its industrial policy?
Which country privatized state enterprises in the 1990s as part of its industrial policy?
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What are some initiatives that can be included in a national industrial policy?
What are some initiatives that can be included in a national industrial policy?
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Which city is mentioned as an example of a fashion cluster?
Which city is mentioned as an example of a fashion cluster?
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What type of policies did Singapore adopt as part of its industrial strategy?
What type of policies did Singapore adopt as part of its industrial strategy?
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Which industry does Silicon Valley North near Ottawa, Canada, represent?
Which industry does Silicon Valley North near Ottawa, Canada, represent?
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What are some characteristics of a strong industrial cluster?
What are some characteristics of a strong industrial cluster?
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What is one initiative that can be part of a national industrial policy?
What is one initiative that can be part of a national industrial policy?
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Study Notes
International Trade and Comparative Advantage
- Higher living standards for consumers due to lower costs, and greater prosperity in poor countries.
- Comparative advantage refers to a country's superior features that provide unique benefits in global competition, derived from natural endowments or deliberate national policies.
Examples of Comparative Advantage
- France has a climate and soil superior for producing wine.
- Saudi Arabia has a natural abundance of oil for producing petroleum products.
- Japan has acquired a superior base of knowledge and experience for producing cars.
- India has acquired a superior base of IT workers for producing computer software.
Competitive Advantage
- Refers to the distinctive assets, competencies, and capabilities developed or acquired by a firm, leading to superior performance.
International Product Life Cycle Theory
- Each product goes through three stages of evolution: introduction, maturity, and standardization.
- Introduction stage: inventor country has a monopoly in manufacturing and exports.
- Maturity stage: production becomes standardized, other countries start producing and exporting the product.
- Standardization stage: manufacturing ceases in the original innovator country, which becomes a net importer of the product.
New Trade Theory
- Economies of scale are important in some industries for superior international performance, even in the absence of comparative advantages.
- Example: The commercial aircraft industry has high fixed costs, requiring high-volume sales to achieve profitability.
Innovation and National Economic Success
- Innovation is a key source of competitive advantage, through developing new products, manufacturing methods, marketing strategies, and company operations.
- Many innovative firms in a nation lead to national competitive advantage.
Productivity and National Economic Success
- Productivity is a key source of competitive advantage for firms, referring to the value of output produced by a unit of labor or capital.
- Aggregate productivity is a key determinant of a nation's standard of living.
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Description
Learn about the stages of evolution - introduction, maturity, and standardization - in the international product life cycle theory. Understand how manufacturing processes and export patterns change throughout these stages.
