Key industry
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Key industry is an industry within the economic system which impacts the whole system in direct and indirect ways [1]:
- is the most strategic,
- generates crucial inputs,
- generates profits,
- provides capital,
- provides goods,
- provides production resources,
- affects directly rest of system by decreasing levels of average costs,
- affects indirectly rest of the system by delivering new knowledge and driving technological developments (because by implementation of new technologies it influences also other sectors).
For example, over century ago, maritime transport was considered as the world's key industry. Then as technology changes happened, it impacted for example iron and steam sectors[2]. Nowadays telecommunication and information services are[3].
System without key industry
If the economic system does not have key industry it will impact negatively the whole system, because[4]:
- cost of importing duties increases,
- cost of transportation increases,
- relative prices increase,
- production cost increase,
- profitability level decrease,
- adaptation of new technologies is delayed,
- adaptation of new knowledge is delayed.
Example of key industries development policy
On the example of Shaghai government, there are following steps which might be taken to influence development strategy by providing policies [5]:
- Establishing institutions responsible for economic development strategy (in 1984),
- Establishing purposes (goals) such as: energy savings, waste reducing, technology developments, material savings and high value added,
- Choosing range of industries that will have the highest impact on the chosen goals: automobile, steel, petrochemical, tyre, power plain equipment, consumer electronics,
- Choosing ten crucial industries that will be covered with the new policy: automobile, telecommunication, computer, equipment, chemical, petrochemical, steel, electrical machinery, consumer electronics, chemical refining, power plain equipment,
- Establishing relevant policies (in 1990),
- Developing criteria for key industries such as: market size, input-output relations, technologic intensiveness, productivity growth etc.(in 1994),
- As consequence there was observed rapid increase of development for chosen industries (in years 1995-2000).
Author: Weronika Burzawa
Footnotes
References
- Antonelli C. (2014), The Economics of Innovation, New Technologies and Structural Change. Routledge Studies in Global Competition. Studies in global competition, Routledge
- DaSilva A. (2016), 2016 Top Markets Report Media and Entertainment. A Market Assessment Tool for U.S. Exporters, U.S. Department of Commerce, International Trade Administration
- Gu N., London K. (2010), Automation in Construction, in "Automation in Construction 19 (2010)", Australia
- Hanle L. J. (2004), CO2 Emissions Profile of the U.S. Cement Industry, U.S. Environmental Protection Agency
- Harlaftis G., Valdaliso J., Tenold S. (2012), The World's Key Industry: History and Economics of International Shipping, Palgrave Macmillan
- Ken M., Yun C. (2010), Transition, Regional Development And Globalization: China And Central Europe, World Scientific
