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Industrial Policies seek to change a country’s production structure, which necessarily implies the creation of new industries (ECLAC 2007). In Latin America import-substitution industrialization (ISI) prioritized the creation of new sectors and the diversification of the production structures, with the objective of changing the prevalent specialization pattern and increasing the weight of technology-intensive activities in the production structure. ISI also responded to the need of endogenizing the effects of domestic demand growth, channelling it to productive investments and avoiding fuelling imports, which would have deteriorated the trade balance. In the 1970s most industry analysts highlighted that investment had two complementary effects on the economy. On the one hand, there was a supply effect through the creation of production capacity (capital accumulation). On the other hand, there was a demand effect on the production of capital goods. Given that the domestic supply of these goods was insufficient, the demand effect was mostly transferred abroad through increasing imports. Such processes generated stop-and-go cycles derived from recurring trade imbalances. This, together with the recognition of potential knowledge and productivity spillovers derived from technical progress embedded in capital goods production, were the rationale behind programmes to foster the domestic production of such goods in the largest countries of the region, mainly Brazil and Mexico.