Infant Industry

Summary of Infant Industry

An industry that is not fully developed in a given country, resulting in a high susceptibility to foreign competition. This condition is often particularly acute in the case of basic industries, such as steel, where the expansion of the industry locally is important to economic development, but economies of scale and other efficiencies cannot be achieved because imports reduce the market share of the local producer. The customary response is to “protect”infant industries through the adoption of higher tariffs, quotas, or similar restrictions on imports.

(Main Author: William J. Miller)