**Introduction** Industrial policy has become more important among major economies because governments increasingly view industrial capacity, technological leadership, and supply chain resilience as essential to economic competitiveness and national security. Geopolitical tensions, supply chain disruptions, and the clean energy transition have encouraged states to intervene more actively in strategic industries through subsidies, investment incentives, and industrial planning. **Contextual background** For much of the post-Cold War period, many advanced economies relied heavily on market liberalization, global supply chains, and multilateral trade rules to allocate production efficiently. However, the global financial crisis, the COVID-19 pandemic, geopolitical tensions, and intensifying technological rivalry exposed vulnerabilities associated with excessive dependence on concentrated supply chains and foreign production networks. At the same time, competition increasingly shifted toward advanced manufacturing, semiconductors, clean energy technologies, critical minerals, and digital infrastructure. Governments consequently began treating industrial policy not only as an economic tool but also as a mechanism for strengthening resilience, strategic autonomy, and geopolitical influence[1][2]. **Why industrial policy has become more important** **1.** **Geopolitical competition and economic security concerns** Major economies increasingly see industrial capacity as linked to national power and security. Strategic sectors such as semiconductors, artificial intelligence, telecommunications equipment, batteries, and defense-related technologies are now viewed as critical to geopolitical competitiveness. This shift has encouraged governments to support domestic production capabilities and reduce dependence on geopolitical rivals. Policies now frequently combine economic and security objectives through subsidies, export controls, investment screening, and technology restrictions[1]. The growing use of economic security frameworks reflects a broader transition from efficiency-centered globalization toward resilience-centered industrial organization[2]. Competition between the United States and China has been especially important in accelerating this trend. Industrial policy is increasingly used to secure technological leadership, shape supply chains, and influence global standards in emerging industries[2]. **2.** **Supply chain vulnerabilities exposed by global disruptions** Major disruptions during the COVID-19 pandemic and subsequent geopolitical tensions revealed the risks associated with highly concentrated global supply chains. Shortages of semiconductors, medical products, energy inputs, and critical minerals demonstrated how external shocks could disrupt domestic production and economic stability. As a result, governments increasingly pursue industrial policies aimed at reshoring, near-shoring, and friend-shoring production networks. These strategies seek to diversify suppliers and strengthen domestic manufacturing capacity in strategically important sectors[3]. Industrial policy therefore became closely connected to resilience planning. Governments now prioritize redundancy, stockpiling, and domestic production capabilities even when these approaches reduce short-term efficiency or increase costs. **3.** **The clean energy transition requires large-scale state coordination** The transition toward low-carbon economies significantly increased the role of industrial policy because clean energy industries require large-scale coordination, infrastructure investment, and long-term financing. Governments are competing to build domestic leadership in electric vehicles, batteries, solar panels, hydrogen technologies, and renewable energy systems. Public support measures such as tax credits, subsidies, procurement programs, and local content requirements are increasingly used to accelerate industrial development in green sectors[4]. Competition over clean energy manufacturing has intensified because these industries are expected to shape future growth, employment, and technological leadership. China’s industrial expansion in solar photovoltaics and electric vehicle batteries demonstrated how sustained state support can rapidly generate global industrial dominance and cost advantages[5]. In response, other major economies expanded their own industrial policy frameworks to avoid excessive strategic dependence. **4.** **Weakening confidence in purely market-led globalization** Industrial policy also gained importance because many governments concluded that markets alone do not guarantee resilient or strategically desirable industrial outcomes. Deindustrialization, regional inequality, and dependence on foreign suppliers contributed to political pressure for more active state intervention. In several advanced economies, policymakers increasingly argue that industrial policy is necessary to rebuild manufacturing capabilities, support innovation ecosystems, and maintain competitiveness in high-value sectors[6]. This reflects a broader reconsideration of the balance between market efficiency and strategic state intervention. At the multilateral level, growing use of industrial subsidies and strategic trade measures has also exposed gaps in existing global trade rules, contributing to debates over reform of the World Trade Organization[7]. **Conclusion** Industrial policy has become more important because major economies increasingly link industrial capacity to economic resilience, technological leadership, and national security. As geopolitical competition and supply chain vulnerabilities intensify, governments are relying more heavily on state intervention to strengthen strategic industries and reduce external dependencies.
