The Evolution of Global Shipbuilding: Innovation, Institution, and Industrial Transformation

Capt Ramji S Krishnan Sloan Fellow, London Business School

INTRODUCTION: THEORETICAL FOUNDATIONS AND GLOBAL CONTEXT

The paradox of the global shipbuilding industry presents a compelling case study in modern industrial economics. Classical economic theory, with its emphasis on comparative advantage, would predict that the location and success of industries are dictated by natural endowments. Yet, the reality of shipbuilding, where nations like South Korea and Japan have engineered their competitive dominance, challenges these traditional views. This phenomenon requires a theoretical framework robust enough to encapsulate both the visible hand of state intervention and the invisible hand of market forces. To address these complexities, this study introduces the Institutional Innovation in Shipbuilding (IIS) Framework. This model integrates economic theory with practical policy implications, aiming to guide India's shipbuilding sector towards global competitiveness. The IIS Framework will be unpacked through our analysis, offering a lens to view the strategic manoeuvres of leading shipbuilding nations.