industripolicy

Industrial policy, sometimes referred to as industripolicy, is a set of government measures aimed at shaping the development and structure of a country's industrial sector. Its goals typically include raising productivity, diversifying the economy, fostering technological innovation, and creating skilled employment through targeted support for specific industries, firms, or regional clusters.

Policies are designed with clear objectives and may combine market-based mechanisms with direct interventions. Instruments include subsidies, tax incentives, public R&D funding, infrastructure investment, government-backed lending, procurement preferences, export promotion, tariffs or import protections, standards and regulations, and the creation of industrial parks or special economic zones. Some approaches rely on state-owned enterprises or public-private partnerships.

Historically, industrial policy has played a central role in developmental states, notably in East Asia, where coordinated industrial strategies emphasized export orientation and upgrading capabilities. In contrast, liberal market-oriented reforms in other regions led to different paths. The theoretical debate distinguishes developmental-state theories and new industrial policy, which emphasize innovation systems, coordination among actors, and resilience, from critiques highlighting risks of government failure and misallocation.

Evaluation of industrial policy focuses on productivity, export performance, diversification, and employment, but outcomes vary with design, political incentives, and external conditions. Critics warn of distortions, capture by interested groups, and unsustainable subsidies, while supporters argue that selective interventions are necessary to overcome market failures and to accelerate strategic transitions such as green and digital economies.

Today, industrial policy often centers on smart specialization, regional development, and innovation ecosystems, integrating with climate, energy, and digital agendas. International experience emphasizes the importance of exit strategies, performance audits, and flexible adjustment to avoid lock-ins and ensure policy learnability.