324
R. S. Muhongo
Local content policies do not thrive in such economies. The following
are the advantages and disadvantages of local content policies.
10.4.1 The Advantages of Local Content Policies
Local content policies create regional clusters and pool resources: Clusters encourage the transfer of technology which results in high rates of
innovation by creating competent channels to public goods and other
market determinants that would have been expensive to acquire. Norway
established indigenous supplier clusters that were involved in the oil and
gas industry.
45 These established clusters in Norway employed approximately 114,000 people in the indigenous market and sales worth $32
billion in the indigenous economy.
46 Local content policies through
cluster creation can reduce the expenditure margins on R&D and
improve productivity.
a. Economic Diversification
Local content policies facilitate the diversification of the economy.
This is possible through public-based and market-based inputs, that
create development channels for other industries other than the oil
and gas industry. For example, in Trinidad and Tobago the government through their local content policy chose to create incentives for
inward investments and joint ventures between indigenous and foreign
market participants.
47 This facilitated the capital-linkage from the oil
and gas industry to other industries with limited domestic competitiveness. Equally, through their 2010 Economic Transformation Plan,
45 Knop, Lilla, and Marzena Kramarz. “Attractiveness of the region in connection with intermodal transport development.” In Sustainable logistics and production in industry 4.0. Springer,
Cham, 2020. 197–217.
46 Ibid.
47 Boopsingh, Trevor M., and Gregory McGuire, eds. From oil to gas and beyond: A review of the
Trinidad and Tobago model and analysis of future challenges. University Press of America, 2014.
R. S. Muhongo
Local content policies do not thrive in such economies. The following
are the advantages and disadvantages of local content policies.
10.4.1 The Advantages of Local Content Policies
Local content policies create regional clusters and pool resources: Clusters encourage the transfer of technology which results in high rates of
innovation by creating competent channels to public goods and other
market determinants that would have been expensive to acquire. Norway
established indigenous supplier clusters that were involved in the oil and
gas industry.
45 These established clusters in Norway employed approximately 114,000 people in the indigenous market and sales worth $32
billion in the indigenous economy.
46 Local content policies through
cluster creation can reduce the expenditure margins on R&D and
improve productivity.
a. Economic Diversification
Local content policies facilitate the diversification of the economy.
This is possible through public-based and market-based inputs, that
create development channels for other industries other than the oil
and gas industry. For example, in Trinidad and Tobago the government through their local content policy chose to create incentives for
inward investments and joint ventures between indigenous and foreign
market participants.
47 This facilitated the capital-linkage from the oil
and gas industry to other industries with limited domestic competitiveness. Equally, through their 2010 Economic Transformation Plan,
45 Knop, Lilla, and Marzena Kramarz. “Attractiveness of the region in connection with intermodal transport development.” In Sustainable logistics and production in industry 4.0. Springer,
Cham, 2020. 197–217.
46 Ibid.
47 Boopsingh, Trevor M., and Gregory McGuire, eds. From oil to gas and beyond: A review of the
Trinidad and Tobago model and analysis of future challenges. University Press of America, 2014.