**Introduction** Governments are increasingly using industrial policy to pursue objectives that are treated as enduring features of economic strategy rather than temporary interventions. These objectives include strengthening competitiveness in strategically important sectors, reducing exposure to supply-chain vulnerabilities, accelerating decarbonization and digital transformation, anchoring investment and production domestically, and managing adjustment to structural change associated with technological and trade integration. The breadth and persistence of these aims explain why industrial policy has re-emerged as a central element of trade and investment policy across advanced and emerging economies[1][2][3]. **Core objectives pursued through industrial policy** **1.** **Strengthening competitiveness in strategic sectors** A central objective of industrial policy is to strengthen international competitiveness in sectors regarded as economically and strategically significant, including semiconductors, clean technologies, advanced manufacturing, and digital infrastructure. Governments use subsidies, tax incentives, concessional finance, and public procurement to accelerate scale-up, shorten learning curves, and support firm capability development. These measures are intended to secure positions in higher value-added segments of global value chains where scale, capital intensity, and cumulative learning are decisive as governments seek to avoid losing production capacity and technological leadership[1][4][5][6]. **2.** **Reducing supply-chain vulnerability and strategic dependence** Industrial policy is widely used to reduce reliance on concentrated or geopolitically sensitive sources of supply, particularly at critical stages of value chains such as processing, component manufacturing, and key intermediate inputs. Governments seek to establish domestic or partner-based capacity at strategic chokepoints, accepting higher costs in exchange for improved resilience and predictability[2][7]. This reflects a shift away from minimizing costs toward managing risk, with industrial policy treated as a tool to internalize vulnerabilities exposed by supply disruptions and geopolitical tensions[7]. **3.** **Accelerating decarbonization while securing industrial capacity** Industrial policy plays a central role in advancing climate objectives by accelerating deployment and domestic production of low-carbon technologies. Support for renewable energy equipment, batteries, and related manufacturing reflects an effort to align emissions reduction with industrial competitiveness, rather than relying solely on imported technologies. These measures increasingly shape trade and investment patterns by influencing where clean-technology capacity is built and scaled to ensure that the energy transition supports domestic production ecosystems, employment, and technological upgrading alongside emissions targets[3][4][8]. **4.** **Promoting structural transformation and upgrading** Industrial policy is also used to steer structural transformation toward higher-productivity activities associated with digitalization and the energy transition. Investment in infrastructure, innovation systems, skills, and industrial ecosystems is intended to enable firms to move into emerging sectors and capture greater value from technological change, rather than remaining concentrated in lower-value activities[2][9]. **5.** **Anchoring investment and production within national economies** Governments use industrial policy to influence the location of production, employment, and investment. Local content requirements, investment conditions, and place-based incentives are employed to build domestic supplier bases and increase domestic value added. While such measures can raise costs and contribute to market fragmentation, they are used to support domestic capacity formation and sustain long-term industrial development strategies amid intensifying subsidy competition and policy divergence[6][10][11]. **Conclusion** Governments are using industrial policy to build domestic capacity in priority sectors, secure critical stages of supply chains, expand clean-technology manufacturing, move production into higher-value activities, and attract or retain investment at home. Taken together, these objectives explain why industrial policy has become a lasting feature of economic strategy rather than a temporary response to crisis.
