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A Neutraceutical Industry: Policy Implications for Future Directions Open Access


Author or creator
Unterschultz, Jim
Lerohl, Mel
Peng, Yanning
Gurung, Rajendra Kumar
Additional contributors
functional food industry
research and development
Type of item
Canada, Alberta
The formation of new industries is an important economic phenomenon, and a driving force that propels industrial development and heralds economic growth. It is important to understand the fundamentals of new industry development in order to understand how industries start and grow. This is the main purpose of this review: In this paper, we seek to clarify the economic process of industry growth, in particular the growth of new industries or economic sectors in order to understand how the industries emerge, to assess whether substantial differences exist between infant and mature industries, and to delineate leading factors determining the performance of new industries. The purpose is to provide information on which to base industrial policy. This project is structured as follows: Part I: Growth and Development of New Industries, Part II: Growth and Development of Research Parks. Part I includes a literature review and theoretical study of infant industries, and presents models of infant industry development in terms of the effects of a new entrant on the price, cost and output of the industry. This sections discusses factors related to the development of new industry, including economies of scale, learning-by-doing, research and development, and spillovers. Empirical studies of infant industries are reviewed. A range of issues are reviewed but particular attention is given to research and development (R&D), spillovers, human resource development, and the roles of Research Universities in providing training and inducing industrial R&D. The main results of the theoretical and empirical discussions are then applied to policy implications for new industry development. Alberta has been identified as having good potential to develop new industries and business clusters in energy and mining, forest products and agriculture and food. The development of value-added agri-food and fibre products has attracted interest from both industries and government, and has been viewed as a new opportunity for boosting economic growth. The Government of Alberta has undertakan a value-added initiative and the University of Alberta has established a research centre for nutraceuticals and functional foods. Policy applications to Alberta value-added agri-food industries are identified. Part II reviews the literature on research parks and their role in infant industry development. Then a case study of the development of Innovation Place Research Park, a research park, is presented. Innovation Place has focussed primarily but not exclusively on agricultural technology and it is located near the University of Saskatchewan.
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