Creating the competitive edge: A new relationship between operations management and industrial policy

Spring, Martin; Hughes, Alan; Mason, Katy; McCaffrey, Paul

Abstract

Policy interventions by governments to alter the structure of economic activity have either been dismissed or ignored by operations management (OM) scholars. However, in recent years, such ‘industrial policy’ measures have gained increasing support in developed economies, particularly in relation to manufacturing. This paper argues that contemporary manufacturing in high-cost economies is rooted in technological innovation. As such, it can be enhanced by industrial policy interventions that prevent systems failures in the process of turning technological innovation into commercially viable products. In particular, we argue that this can be achieved by establishing non-firm, intermediate research organizations and by other measures to change the institutional architecture of an economy. We disagree with claims in earlier OM literature that industrial policy is all but irrelevant to manufacturing firms and to OM. Instead, we argue that OM must broaden its conceptual scope so as to encompass active engagement with non-firm network participants such as government-supported intermediate research organizations, and that, as well as learning to be effective users of industrial policy, OM practitioners and academics
should engage actively in the development of industrial policy. In this way, high-value, high-productivity manufacturing can be viable in high-cost economic environments.

• Journal Article Type: Article
• Publication Date: 2017-03
• Deposit Date: Feb 4, 2025
• Journal: Journal of Operations Management
• Print ISSN: 0272-6963
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 49-51
• Issue: 1
• Pages: 6-19
• DOI: https://doi.org/10.1016/j.jom.2016.12.003
• Additional Information: This article is maintained by: Elsevier; Article Title: Creating the competitive edge: A new relationship between operations management and industrial policy; Journal Title: Journal of Operations Management; CrossRef DOI link to publisher maintained version: https://doi.org/10.1016/j.jom.2016.12.003; Content Type: article; Copyright: © 2017 Elsevier B.V. All rights reserved.