infant industry

Infant Industry Argument

A policy position stating that new industries developing in a country need government protection. That is, the infant industry argument states that a government must subsidize these industries and/or protect them through tariffs. Proponents of this argument note that several East Asian tigers used this policy following World War II with a great deal of success. Critics maintain that these policies are capital intensive and not all states can afford them. It could also lead to retaliatory moves in countries to which a country seeks to export. See also: Import-substitution industrialization.

infant industry

a newly established industry developed either by private-enterprise interests or set up by governments, often in DEVELOPING COUNTRIES, as part of their INDUSTRIALIZATION programmes. New industries are often subsidized by the government and/or protected from import competition in the hope that in due course they can exploit economies of scale and thus eventually withstand foreign competition. Infant industries are often cited as a legitimate’ area for the application of PROTECTIONISM, but policy in this area is often open to abuse. See ECONOMIC DEVELOPMENT.
References in classic literature ?
The fable with Goethe so affectingly relates under the title of "The Erl- King" was known two thousand years ago in Greece as "The Demos and the Infant Industry." One of the most general and ancient of these myths is that Arabian tale of "Ali Baba and the Forty Rockefellers."
Markey (D-Mass.) introduced legislation to strengthen and expand the Small Business Innovation Research (SBIR) program, which provides instrumental funding to infant industry research and development where obtaining private capital is not yet an option.
Despite repeated calls from economists of all stripes to move toward lower and more uniform protection, to tie incentives to more efficient use of capital, and to adhere to the original infant industry prescriptions by gradually reducing government support, most policymakers studiously ignored these recommendations.
These include the infant industry clause and the anti-dumping measures.
Islamic finance is no longer an infant industry and Bahrain next year will celebrate the 40th anniversary of the establishment of the first Islamic bank in the country.
Japan's Honda will invest $2.75 billion in the autonomous vehicle unit run by the US's General Motors, called GM Cruise, which is considered a leader in the infant industry.
"In 1946, considered an infant industry, there were 18 million passengers.
Those who believed in free trade came up with what came to be called the 'infant industry argument', according to which it was right to protect those enterprises that were in the early stage of development.
Local content policies have their origins in the writings which outlined the 'Infant Industry Argument', an argument that was first articulated in the 1790s.
When it started the IT-BPM [information technology and business-process management] industry was very much an infant industry, and the motivation back then with IBPAP [Information Technology and Business Process Association of the Philippines] was to give publicity to the industry,' Canadian Chamber of Commerce in the Philippines (CanCham) President Julian Payne said during the media launch of the event.
Infant industry type arguments might have inspired the adoption of liberal access policies apart from any price subsidy.
The infant industry argument had traditionally led our government to use high import tariffs to protect domestic producers from foreign competition.

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