Problems Encountered in Adapting the Industrial Policy to the New Economic Realities

The purpose of the study is to analyze industrial policies that have been practiced in various parts of the world over the past several decades, as well as the principles and structural components (e.g. scope, agents, priority-oriented approaches, incentives and outcomes) of a multi-level industrial policy adapted to the new economic realities. The study is focused on the levels at which the industrial policy is shaped and implemented from an individual manufacturing company level to the national one. The paper proves that it is critical that the national industrial development strategy is based on import substitution (the national industry cannot develop without manufacturing high-tech products with high added value). The authors analyze Russia's industrial policy regulations and look into the history of creating the legal framework for the national industrial policy. The methods proposed for implementing the industrial policy use a systematic approach, the concept of market agents' rational behavior and comparative analysis. Along with traditional methods of industrial policy making, structural and foresight methods are discussed. Special attention is given to import substitution, a type of economic strategy and industrial policy which is new to Russia. Import substitution is expected to result in higher competitiveness of Russian manufacturers and their products, which will be achieved by stimulating modernization of manufacturing processes, enhancing productivity and launching new competitive products with relatively high added value. The main conclusion drawn from the study is that the industrial policy should be shaped and implemented on four levels. For the individual company level, this approach suggests using a model that relates resources to outcomes. The article gives a detailed description of this model's structural elements and their relations. Considering that the management process tends to change, and changes in both international and domestic environment necessitate altering structural components or relations between them, or introducing new components, a list of issues to be discussed is proposed.