Mission-Oriented Policy for Innovation and the Fuzzy Boundary of Market Creation: the Brazilian Shipbuilding Case

Abstract

Recent literature has called attention to the significance of mission-oriented policies (MOPs) in setting the directions of change, market creation, and economic development. The aim of this article is to analyze and discuss the main challenges of setting MOPs in the context of developing countries. We do so by looking at the recent development of the Brazilian shipbuilding sector where an entire institutional setting was put in place to boost technological and industrial development. We investigate the policies set for the sector to create a market, stimulate the industry, and promote innovation. Results show that, while the set of policies emplaced was able to give an initial boost in the sector, coordination uncertainties and high capability-building costs precipitated the failure of the industry to catchup with international competitors. We argue that there is a fuzzy boundary between policy expectations for market creation and the actual possibilities of building an industry.