Global patterns of production support

Global patterns of production support

The importance of creating a conducive environment for production and government support is not hidden from anyone, but the important question is how and in what framework this support should be formed. Global experience has shown that the choice of government support in determining the fate of the manufacturing sector of countries is crucial and can lead to the destruction or prosperity of the manufacturing sector.

A new survey of 70 manufacturing executives around the world, presented in a report entitled “Production for Growth” to be presented to the World Economic Forum, found that government policies play the most important role in supporting production. The Parliamentary Research Center has also examined the secret of reviving businesses in Iran by examining the strategic model of supporting production. Evaluations show that in order to prepare a policy package to effectively support productive investments in Iran, instead of direct financial assistance to some producers, a suitable business environment should be created for all of them. The results of studies show that in order to boost and transform production in the country, direct support for production should be abandoned; Because it is often not only unsuccessful, but also likely to become a target. The Global Production for Growth Report also notes that government policies that simplify tax systems and promote free and fair trade, in addition to strengthening energy and infrastructure policies and focusing more on frameworks. Labor training determines the fate of countries’ production sectors. World leaders have also stressed that policies in the fields of science, technology and innovation can bring advanced manufacturing prosperity to countries.

There are many experiences of oil exporting countries, including Iran, which show that direct support for production will have many consequences, including “expansion of the public sector”, “rent-seeking and corruption”, “non-optimal land management”, ” “Unbalanced development” and “waste of government and banking funds”. Instead, creating a favorable business environment leads to private sector expansion, balanced development, and improved productivity and efficiency in the economy, while at the same time, government officials are less prone to corruption and mismanagement. Meanwhile, a “stable macroeconomic environment” is one of the components of a suitable business environment that allows entrepreneurs to plan and ensure their growth and development. In contrast, unstable macroeconomic environment increases the risk and cost of products and ultimately their failure and change in nature. The average macroeconomic instability index during the last 23 years (1991-14) shows the macroeconomic instability in Iran (11.2) much higher than the world average (6.4) and the average in all groups of countries, even developing exporting countries. Oil (7.4). Studies and statistics show that developing oil-exporting countries have more volatile real inflation and exchange rates than other countries, and Iran has had far worse conditions in this area over the past 23 years; So that the instability caused by the real exchange rate and inflation rate of Iran has been about three times the world average and more than twice the average of developing oil exporting countries. The damage caused by the instability of the real exchange rate is very severe for entrepreneurs and businesses and requires serious attention of the authorities, and the solution to stabilize the appropriate fiscal, monetary and exchange rate policies. Of course, it is not possible to have a single version to support production in all countries of the world, and policies must be tailored to the gender of each country’s economy, but a look at the world experience in this field can be enlightening.

Germany
The engine of German production, this largest European economy has found its way to prosperity through policies to support innovations and new technologies, but at the same time it is facing challenges in areas such as energy and rising labor and material costs. To address these challenges, manufacturing executives have suggested to policymakers that Germany needs to take a more realistic approach to the energy transition, focusing on high-tech innovation, and reducing the inflexibility of its labor laws to support the manufacturing sector.

Japan
Japan is one of the largest economies in the world and is recognized internationally as one of the most successful countries in the field of production, but it also faces problems such as declining population, high levels of taxes and limited access to natural resources. Japanese government officials first identified these weaknesses as barriers to production in their country, and are now trying to stabilize the value of their money and counter inflation by formulating corrective policies and providing appropriate monetary policies. Reducing tax pressures, formulating labor policies tailored to the demographic situation, and long-term supportive policies in the field of science and technology are among the policies on the Japanese government’s agenda.

India
Production is one of the key sectors of the Indian economy, and the Indian government intends to revolutionize production with its new reform policies. The use of new technologies in schools and universities and the strengthening of in-service training to acquire more skills in the workforce, support for R&D centers and the identification of areas of production that can be pioneers of advanced production are on the agenda of the Government of India. In this country, prizes are also awarded to those production units that, during the transition from traditional to advanced production, innovate and innovate and apply advanced production methods.

Canada
Strengthening Canada’s manufacturing sector is one of the most important missions of the current government because manufacturing is one of the most important drivers of the Canadian economy. About 11 percent of Canada’s gross domestic product comes from high technology and skills, which have created 1.7 million jobs and indirectly covered another 3 million jobs.

Between 2008 and 2009, despite the global recession and the loss of many jobs worldwide, Canada’s manufacturing protection policies saved 52,000 jobs from the effects of the global crisis. Production protection policies are still on the agenda in Canada, including tax cuts, opening the door to new markets for Canadian exports, increasing production skills training, supporting advanced technology, and research and development. .

A quick look at the experience of other countries shows that each country chooses a set of policies to support production according to the weaknesses and strengths of its economy. In none of the global models, however, is direct payment of cash to production units observed except in the form of awards for progress in a specific field, such as production using advanced technologies. Therefore, it seems that the first step to support production is to identify the weaknesses and challenges facing the country’s production.