Summary

Governments have increasingly adopted industrial policies, which are selective interventions targeting specific firms, sectors, or regions, motivated by a broader set of objectives beyond traditional competitiveness, including climate, supply chain resilience, national security, and geopolitical concerns.
A key historical dataset, Global Trade Alert’s New Industrial Policy Observatory used by the International Monetary Fund, identifies 34,248 global policy interventions in the 2009-2023 period, with 85% being trade-distorting and a growing focus on use of subsidies especially in strategic sectors, increasingly in green energy, clean tech, and energy-efficient utilities.
China, the EU, and the US account for 53% of these measures, and advanced and emerging economies have converged in their use of such policy instruments. The share of countries implementing such policies has risen markedly since the global financial crisis, rising to 71% from 56% in developing economies between 2009 and 2023.
Since 2020, there has been a marked increase in selective interventions, especially those motivated by supply chain and geopolitical risks, with empirical analysis showing a shift toward supporting less established industrial sectors and increased concentration of support for favored industries. Industrial policy interventions spurred by the COVID-19 outlasted and grew even after the pandemic.
The post-2020 trends are driven by emerging economies targeting products with higher geopolitical exposure and advanced economies concentrating support in sectors with existing policy backing, with national security and supply chain resilience playing key roles in these shifts.

Assisted by

Access the full white paper