Capabilities and industrial policy: Lessons from the New Zealand movie industry

Abstract

This article examines the New Zealand government's creation of an internationally successful industry. The activities of the New Zealand Film Commission are examined with regard to the effect they had on the entrepreneurs they nurtured. Factors that contributed to success include the market-driven nature of the policy and an emphasis on capability building. Support is found for the suggestion that government agencies should act like venture capitalists. Negative aspects of government intervention included political capture and smoke-stake chasing.