Industrial policy has a poor track record in the West, where governments once provided support to sectors that had no viable path to profitability. Now that it's making a comeback, governments should regard industrial policy more as knowledge policy and prioritize diffusion over innovation.
TURIN – Industrial policy is back in vogue. After decades of eschewing the use of market-shaping policy tools like tariffs and subsidies, many Western governments have embraced them, spurred by the COVID-19 pandemic, which exposed vulnerabilities in global supply chains, and by broader fears about Chinese technological and commercial dominance, which could cost the West countless well-paying jobs. If these efforts are to succeed, however, an emphasis on knowledge is crucial.
TURIN – Industrial policy is back in vogue. After decades of eschewing the use of market-shaping policy tools like tariffs and subsidies, many Western governments have embraced them, spurred by the COVID-19 pandemic, which exposed vulnerabilities in global supply chains, and by broader fears about Chinese technological and commercial dominance, which could cost the West countless well-paying jobs. If these efforts are to succeed, however, an emphasis on knowledge is crucial.