Industrial Policies and their Effect on Innovation

The ability of business innovation may be considered a source of sustainable competitive advantage. Despite the risks and uncertainties, innovation can produce a significant impact on companies' financial results. Government intervention, which is a source of market development and competitive advantage, is also related to innovation. This theoretical essay was designed to analyze the effect of Industrial Policies on Innovation. The relationship between the state and private companies may generate information to identify and remove constraints that hamper the development. The results of the empirical research are able to clarify the effectiveness of Industrial Policies when it comes to innovation and whether the Industrial Policie encourages a certain kind of innovation or promotes all kinds of innovation.