Under the general equilibrium framework, this paper examines how the industrial policies such as tax benefits, credit subsidy and R&D subsidy will influence the independent innovation’s performance and the economic growth on the balanced growth path by the theory model and numerical simulation. The result shows that the direct governmental R&D subsidy may squeeze the private sector’s R&D expenditure and cannot enhance the economic growth rate, otherwise the indirect industrial policy such as tax benefits, credit subsidy can do it, especially does the credit subsidy. Therefore, the future industrial policy should focus on the whole technological innovation field and foster an innovation atmosphere rather than judging and interfering the direction of emerging technology or emerging industry, that is, return from “selective industrial policy” to “strategic industrial policy”.
