How can governments identify good candidates for infant industry protection? Can you suggest some key characteristics of good candidates? Why are industries like computers not good candidates for infant industry protection?

Infant industry protection refers to the economic policy of protecting young industries from foreign competition until they become mature enough to compete effectively in international markets. This can be achieved through various means such as tariffs, import quotas, subsidies, or other forms of support.

Good candidates for infant industry protection are those that meet the following criteria: 1. Potential for growth: The industry should have the potential for significant growth and the development of economies of scale, which would make it competitive in the global market. 2. Technological progress: The industry should be one that involves new technologies or processes that improve productivity, quality, or innovation over time. 3. Strong domestic demand: A robust domestic demand should exist for the products of the infant industry, which would help sustain the industry as it grows and develops. 4. Potential for export: The industry should have the potential to develop export markets, which would provide additional sources of revenue and growth. 5. Fosters employment: The industry should be labor-intensive or create jobs, thereby contributing to economic growth and development. 6. Inter-industry linkages: The infant industry should have strong linkages with other sectors of the economy, promoting growth and development in related industries.

Industries like computers are not good candidates for infant industry protection for the following reasons: 1. Rapid pace of technological change: The computer industry is characterized by rapid technological change and innovation, which means that any domestic industry that is protected may quickly become obsolete if it doesn't stay at the forefront of technology. 2. Global supply chains: The computer industry is heavily reliant on global supply chains, making it challenging for a protected domestic industry to develop independently. 3. Economies of scale: Competing in the computer industry requires massive investments in research and development, infrastructure, and production. This makes it difficult for an infant industry to compete effectively with established multinational corporations unless they can achieve significant economies of scale. 4. Limited domestic demand: In many countries, the domestic demand for computers and related products may be relatively small, making it difficult for an infant industry to grow and become competitive just within the domestic market. 5. Foreign competition: The global market for computers and related products is highly competitive, with many well-established companies competing for market share. Infant industry protection may not be effective in such a market as new firms will struggle to overcome the competitive advantages of established players.