A toolkit for R&D policy choice with an application to Chilean mining

Governments across all developing countries aim to improve firms’ productivity with a wide array of initiatives that support R&D investments, provide public goods and foster technology transfer. Decisions on implementing public policy programs are frequently guided by ad hoc criteria on a case by case basis. However, public programs often fail or do not have the expected impacts. Therefore, the provision of a general framework that guides the implementation of initiatives is a must for academics performing research on innovation and industrial development. In this paper, we provide a theoretical framework, a toolkit, to help satisfy this need. In this article, we postulate that industrial organisation of firms and their suppliers and firms’ corresponding economies of scale are the main aspects to be considered when analysing policy alternatives. We apply the prescriptions of our toolkit to the case of the Chilean mining industry over its various stages of maturity during the last three decades.