The global business revolution has rendered obsolete national industrial policy to support large indigenous firms. Discuss

British Government and their special trade agreements with former slave colonies , particularly those in the Caribbean . However , to an extent the WTO does permit members to adopt some amount of protectionism for their domestic industries . The circumstances and conditions under which such is permitted are also stipulated . Generally , while the WTO encourages liberalization , it also permits governments to adopt measures to cushion the effects on domestic labor and local business interests (Kennedy 411

This provision by the WTO , permitting a limited amount of government intervention , supports the position that there is

still a place for national industrial policies that protect large indigenous firms Governments , particularly those in developing countries , need to formulate protective policies to protect their local firms so that their transition to global competitiveness can be realized as smoothly as possible . On their own many indigenous firms cannot face up to the competition from giant corporations who have greater access to financial reserves

As Lenway Murtha point out . states have organizational capabilities to formulate and implement strategies that target home firms to build their international competitiveness (516 . Policy makers in countries such as China , Japan and South Korea have all acknowledged the inevitability of such governmental practices . In South Korea the industrial policy regime aims to encourage indigenous industry and has implemented a national strategy to catch up with developed countries (Lee 1998

International firms usually possess considerable advantages over local firms . Their access to financial resources and advanced technology over and above that are available to indigenous firms gives them the competitive advantage (Croft 101 . Large firms therefore use these advantages to outperform local firms (Croft 109

Furthermore many states have entered the industrialization game relatively late . This has meant that governments have to facilitate the process of technological improvements for their large firms by intervening...