Directing structural change: from tools to policy

Directing structural change: from tools to policy

Download PDF 555 KB

Altenburg, Tilman / Maria Kleinz / Wilfried Lütkenhorst
Discussion Paper 24/2016

Bonn: German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE)

ISBN: 978-3-96021-018-4
Price: 6 €

Structural change towards diversification and competitiveness is important to make our economies productive, wealthy and sustainable. In market economies, structural change is essentially driven by private entrepreneurs who challenge incumbents with new business ideas and take risks to implement them. While public policy cannot fully anticipate the outcomes of such market-driven search processes, it does have important roles in directing structural change: it can facilitate stakeholder processes meant to overcome coordination and information failure and thereby smooth the transformation; it can make pre-competitive investments in infrastructure and skills for the future; and it can help align structural change with broader societal objectives, such as environmental sustainability or job creation. To fulfil these roles, policymakers need to have an idea about future competitive patterns of specialisation. The challenge is to anticipate trends and facilitate action towards promising futures in ways that are as evidence-based as possible and effectively synchronised with market forces.
Our paper makes three essential contributions to addressing this challenge: (1) We identify five influential methodologies for anticipating future competitive advantages, analyse their strengths and weaknesses, and suggest ways to consolidate their most valu¬able features in one synthetic approach. (2) In doing so, we emphasise the importance of disruptive change, stemming in particular from decarbonisation as well as the digitali¬sation of economic processes and products. Such game changers are likely to affect virtually all economic sectors, thereby reducing the predictive power of methodologies that essentially extrapolate from the past. (3) We highlight the need to contextualise the various analytical tools, and caution against using them as technocratic blueprints. To be of practical use, evidence-based assessments of future competitive advantages need to be embedded into a political economy framework that takes account of both societal objectives (normative level) and implementation capabilities (institutional level).

About the author

Altenburg, Tilman

Economic Geographer

Tilman Altenburg

Further experts

Berger, Axel

Political Scientist 

Brandi, Clara

Economist and Political Scientist 

Lindenberg, Nannette

Economist 

Schwab, Jakob

Economist 

Current Publications

When and how can foreign aid slow migration?

Martin-Shields, Charles / Steffen Angenendt / Benjamin Schraven
Externe Publikationen of 14 December 2017

Die ökonomischen Auswirkungen von EU-Freihandelsabkommen auf Entwicklungsländer

Brandi, Clara
Externe Publikationen of 14 December 2017

Peacekeeping's digital economy: the role of communication technologies in post-conflict economic growth

Martin-Shields, Charles P. / Nicholas Bodanac
Externe Publikationen of 14 December 2017

Pension schemes in MENA: generous—but not to the poor!

Loewe, Markus
Externe Publikationen of 13 December 2017

The European Fund for Sustainable Development: changing the game?

Lundsgaarde, Erik
Discussion Paper 29/2017