Public Support to Business: An Overview

Abstract

It is difficult to find a precise and unambiguous definition to public support to business (see Aiginger, 2007 for a discussion). Economists often use the term ‘industrial policy’ instead of ‘public support’. In this book we use interchangeably the terms industrial policy and public support policy. In general, any economic policy which influences industry can be referred to as public support to business. In the broad sense, such a support encompasses public sector intervention aimed at changing the distribution of resources between economic sectors and activities (Caves, 1987). However, the concept of public support to business agreed upon by economists since the early eighties also includes issues linked to innovation, economic growth, technological progress, and entrepreneurship. Public support policy is, therefore, a sort of complement to market forces that reinforce or counteract the allocation that market forces would otherwise produce.