Industrial Policy Framework Research Articles

Navigating the energy transition with the Carbon-Energy-Green-Electricity scheme: An industrial chain-based approach for China's carbon neutrality

In exploring the intricate dynamics of China's energy transition towards a national certificate trading market, this study harnesses a two-stage game model to unravel the nuanced decision-making within the intertwined carbon emissions trading, energy-consumption permit trading, and electricity markets. A novel industrial chain-based policy framework, i.e., the Carbon-Energy-Green-Electricity (CEGE) scheme, is introduced to address the complexity inherent in aligning these trading markets towards carbon neutrality goals. Findings reveal that the current isolated energy transition policies lead to increased electricity prices and imposes redundant regulatory burdens on power companies. By advocating for the CEGE scheme, the study presents a strategic approach to alleviate these challenges, highlighting its potential to lower electricity costs and foster more efficient carbon reduction efforts. Furthermore, it underscores the importance of integrating energy transition policies, including CET, ECPTS, the renewable portfolio standards (RPS), and the tradable green certificate program (TGC), to enhance renewable energy adoption, offering a path to relieve financial pressures on households while supporting broader environmental and economic welfare improvements.

Reshaping the Industrial Policy Framework of Turkiye: Integrating Exports at the Core of AI-Driven Development

This study explores the evolving landscape of industrial policy amid deglobalization, protectionism, and the technological revolution driven by artificial intelligence (AI). The shift in industrial policies across the US and EU, driven by geopolitical tensions, climate change, and economic rivalry, has resulted in increased protectionist measures. The US, once an advocate of free-market principles, now implements policies like the CHIPS Act to enhance domestic manufacturing and reduce reliance on China. For developing countries like Turkiye, integrating exports into industrial policy is crucial. Despite Turkiye's significant export growth, challenges such as low R&D spending and a small share of high-tech exports persist. The article emphasizes the need for a dedicated institution, the Industrial Policy Institutes of Turkey (TEPE), to focus on innovation, competitiveness, and sustainable development. TEPE would encompass various sub-institutions dedicated to high technology, energy, defense, and digitalization. AI can play a strategic role in analyzing sectors, optimizing supply chains, and enhancing export competitiveness. By leveraging AI, Turkiye can transform its industrial policies and position itself more robustly in the global market, ensuring economic resilience and growth.

For the greater good: modern China’s struggle on housing shortage

The examination of housing shortages in China presents a fascinating subject that is rarely directly addressed. This topic not only captures our interest due to the irony in a communist country but also in light of the profound transformation of Chinese society, evolving from an agrarian civilization to a modern industrialized state. The objective of this essay is to establish a comprehensive framework that encompasses economic, social, and architectural narratives as an integrated whole. This essay delves into the historical trajectory of housing shortages in modern China, tracing the evolution of this issue within Chinese society since the founding of the communist regime in 1949. Given China’s unique industrial and residential policy framework, housing provision is intrinsically linked to state-owned factories and residential certification, commonly referred to as hukou. As the political and economic foundations have shifted over time, so too has the root cause of housing shortages. In addition to general historical and theoretical research, we have undertaken an in-depth examination of Lanxi City, one of the industrial clusters established in China. The case study of Lanxi City involves a series of visits and interviews conducted within local factories and communities. Our analysis identifies two distinct phases in this evolution: the “fundamentalist communist era” and the transitional period toward a market economy. Each of these eras can be further subdivided into four distinct phases, providing a more nuanced perspective. Our findings reveal that various housing distribution mechanisms have contributed to the issue of housing shortages. During the first era, housing shortages were primarily a result of hukou restrictions, industrial disparities, sluggish construction processes, and corporate profit considerations. In the latter phase, spanning the 1980s and 1990s, housing shortages were exacerbated by escalating costs and a slow rate of housing unit replenishment. As the new millennium unfolded, real estate bubbles compounded the housing crisis, with older neighborhoods ill-suited for modern living. Our interviews and visits complemented our literature research, offering valuable insights into the systemic exploitation of specific groups in pursuit of broader goals, hence the title. This paper underscores the housing shortage in China as a consequence of economic disparities between urban and rural regions, as well as between the prosperous East coast and the underdeveloped West hinterland.

Aligning Nigeria’s International Obligations: A Comprehensive Analysis of Environmental Protection within the Industrial Law and Policy Framework

Environmental protection is a global concern but action taken varies widely. The absence of sustainable practices in labour and industrial policies in Nigeria has contributed significantly to environmental degradation. This is due to the non-internalisation of environmental concerns and non-adherence to international environmental laws and obligations, which has led to the absence of environmental protection standards as a factor in investment decisions. Studies have shown that minimising environmental impact is essential for the planet and the long-term success and reputation of a business. Therefore, in this article it is argued that a comprehensive set of guidelines and procedures to govern operations in areas such as waste management pollution, energy use, and emissions reduction, as well as employee training and engagement in sustainable practices, will minimise environmental footprints and positively impact on communities. Understanding that commitment to international obligations and national policies reflects the belief that business has a crucial role in preserving the environment for future generations, a regular assessment of progress towards meeting these obligations and seeking opportunities for continuous improvement in national laws are recommended. Employing a legal analysis and literature review methodology, the article will outline and review environmental and industrial policies in Nigeria to see what review or amendment options are available in line with the commitments and obligations under international law, while also making inferences from select countries.

Industrial development of the Ural Federal District under the new conditions: Problems and prospects

Subject. This article discusses the economic potential of the Ural Federal District regions. Objectives. The article aims to analyze the structure and changes in imports and exports in the manufacturing industry of the Ural Federal District, and identify key foreign partners – suppliers of equipment and components. Methods. For the study, I used the methods of statistical, comparative and structural analyses. Results. The article finds that imports are of particular importance for the modernization of industry. Based on the analysis of the changes in and structure of imports and exports in the regions of the Ural Federal District, the article presents data showing that industrial regions, in particular the Sverdlovsk and Chelyabinsk Oblasts, depend on imports to the greatest extent. Conclusions. In modern conditions, domestic demand is becoming one of the drivers of industrial development. Effective measures within the framework of industrial policy are needed to develop import substitution processes.

Strategies for green industrial and innovation policy–an analysis of policy alignment, misalignment, and realignment around dominant designs in the EV sector *

Governments in industrialized as well as emerging economies are racing to implement policies to accelerate clean energy innovation and capture the economic benefits of decarbonization. This paper explores which combination of technology-push and demand-pull policies best situates a country to lead in clean energy innovation, as new or dominant designs emerge and replace older technologies. A new analytical framework for green industrial policy is introduced regarding the alignment, misalignment, and deliberate misalignment of policies. This framework is applied to battery electric vehicle drivetrain technology to examine the use of policy alignment and misalignment by countries with big automakers as they pursue strategic green industrial policy. We find that countries that achieved early and sustained (not inconsistent) policy alignment gained a first-mover advantage compared with countries that deliberately or accidentally misaligned their policies. We also find that first-mover advantage can be lost due to deliberate misalignment of policies caused by an inability of governments to effectively incentivize their firms to develop and deploy cleaner and more efficient technologies. In situations where governments adopt misaligned or conflicting policies, incumbent industries tend to pursue their prior comparative advantage and maximize return from investments in prior technologies. We also find that deliberate misalignment of policies can be an effective catching-up strategy.

Multi-stakeholder initiatives and decarbonization in the European food supply chain

The European Green Deal is a political milestone aiming to promote a carbon-neutral economy in the European Union. Decarbonizing the complex food sector requires the unified interaction among effective climate policies, economic instruments, and initiatives involving multiple stakeholders. Despite increasing efforts to highlight the importance of innovations and finance to achieve sustainable food supply chains (FSC), comprehensive information about related opportunities and barriers to mitigating emissions in the food sector is still under-explored. To cover this gap, this paper applies an existing industrial policy framework under the lens of the EU FSC to identify potential strategies that should help achieve the needed financial means and innovation actions, as well as to gauge political alignment across FSC stages. Methodologically, the pillars proposed in the framework are linked to multi-stakeholders’ initiatives engaged in achieving net-zero emissions. The paper highlights three main implications of the identified interlinkages. First, political directionality related to the food sector should be more comprehensively tailored to account for the specificities of all stages of the FSC. Second, research and development projects shall likewise cover all stages, instead of emphasizing only food production and agricultural systems. Finally, multiple stakeholders are crucial as promoters of technology and innovation towards a green economy. Nevertheless, initiatives should be integrated into political discussions in order to promote civil awareness, sustainable food and services demand, aligned to political guidelines.

The impact of the COVID-19 pandemic on industrial policy in Germany and the European Union – the case of the automotive industry

The European Union (EU) and Germany were already being confronted with rapidly changing dynamics on the economic, ecological, and technological terrains prior to the Covid-19 crisis. The pandemic, however, has fully exposed critical global value chain (GVC) dependencies, jeopardising the already troubled automotive industry. By employing a historical-institutional and a pre- and post-Covid-19 industrial policy analysis, this article finds that, despite previous attempts, it was during the height of the pandemic that the implementation of green and digital industrial policy gained significant political support in Germany and the EU. In this context, there is an increased relevance of vertical industrial policy, which is geared towards the ‘twin transition’, partly altering the primarily horizontal industrial policy framework manifested in the post-Maastricht period.

A complexity economics framework for 21st-century industrial policy

The last decades have seen a renewed interest in industrial policy. Unlike previous approaches, 21st-Century Industrial Policy strives for a synthesis going beyond both market-fundamentalist and dirigiste approaches. So far, however, this peculiar nature prevented it from fitting within any specific theoretical frame. The main objective of this paper is to show that Complexity Economics is a valid candidate for theoretical frame for 21st-Century Industrial Policy. In order to do so, I will lay the foundations for a first connection between two research programmes that so far proceeded indifferently from one another. I will show that the main features of 21st-Century Industrial Policy can be easily derived from the general axioms of Complexity Economics, and that thus 21st-Century Industrial Policy can be micro-founded on Complexity Economics. This re-foundation is instrumental in giving coherence to Industrial Policy, better defining its tools and scopes, and identifying avenues of further development.

FEATURES OF INTERACTION BETWEEN THE STATE AND BUSINESS: THE EXPERIENCE OF KAZAKHSTAN

The purpose of the study is to assess the role of the state in business management in the context of the experience accumulated over the years of new industrialization and medium-term tasks for the formation of an export-oriented economy with high added value.Methodology. The theoretical and methodological basis of the study was the key provisions set forth in the scientific publications of economists on various aspects of business management. The scientific and methodological apparatus includes a causal and current analysis of statistical data on the state of business in Kazakhstan. The basis for assessing the interaction between the state and business, the measures of state support for industry used are the concepts and concepts traditionally used in the study of entrepreneurial activity.The originality / value of the study lies in the rationale for the transition from disparate tools of state support for business to a comprehensive system of stimulating its development.The results of the study revealed the main reasons hindering the promotion of business in the domestic market and the entry of industrial enterprises into international markets. An assessment of various measures of state support for business within the framework of industrial policy is given. It is shown that both the implementation of state programs, despite significant funds, and measures of state support, have a supporting value on the manufacturing industry of Kazakhstan, which determines the pace of development of the economy of Kazakhstan as a whole, to a greater extent. Recommendations for building the capacity of industrial entrepreneurship have been developed and key areas of state regulation of entrepreneurship in the medium term have been identified.

Articles: African industrial hubs and industrialization: diversity, unevenness and strategic approach

Economic agglomeration and industrial clusters have always been part of industrialization and economic development. Since the 1960s, industrial hubs have proliferated in Asia, driven by policies to foster economic catch-up and structural transformation. Industrial hubs are relatively new to Africa but continue to attract attention from policymakers and researchers. However, empirical studies on African industrial hubs have been inadequate and, to date, have had only a limited influence on policymaking. Contrary to accepted wisdom, underperforming African industrial hubs offer an opportunity for policy learning from successes and failures. This paper aims to fill the existing knowledge gap from a policymaking perspective. It has three objectives: first, to demonstrate the diversity, the uneven and mixed outcomes, and the evolving nature of African industrial hubs; second, to provide insights and policymaking lessons through a comparative analysis of four diverse cases, namely those of Mauritius, the China-Africa economic and trade cooperation development zones, the Tanger Med Complex in Morocco and the recent experiment with industrial hubs in Ethiopia; third, to show that developing synergies to advance industrialization requires a strategic approach, integrating the state’s productive role and executive excellence within the broader industrial policy framework.

Addressing problems for labour not problems of labour: the need for a paradigm shift in work and industrial relations policy

ABSTRACT This article argues that the policy framework governing work and industrial relations in Australia and other liberal market economies is stuck in an outdated paradigm fixated on solving problems of labour that have diminished or no longer exist, such as excessive union power and overt forms of industrial conflict. This policy framework is poorly equipped for addressing increasingly urgent problems for labour, such as growing inequality and workforce insecurity. Drawing upon neo-pluralist ideas and the findings emerging from industrial relations research, the article presents recommendations for what a new industrial relations policy framework would look like. It advocates for the adoption of a neo-pluralist policy paradigm focused on the creation of quality employment, worker wellbeing, redistribution in bargaining and wage determination, fairer labour immigration policies, stronger protections against gender-based inequalities, and increased job security.

Economic Imperatives of Evolving National Digital Policy: A Call for a Modern Industrial Policy Framework in India

ABSTRACT The world economy is witnessing the rapid digitization of global production, trade, and consumption of goods and services, which is significantly impacting economic activities in both developing and least developed countries. In this article, we examine and review the evolving framework of the national e-commerce policy in India and map digital policies in the broader contours of the industrial policy framework. Findings of this article show that interventionist policies such as localization of data and restrictions on cross-border data flows are vital for building domestic digital infrastructure, firms, platforms, and capabilities.

Disparities in robot adoption among U.S. manufacturers: a critical economic development challenge

ABSTRACT The growing recognition of industrial robots as a source of innovation and competitiveness for manufacturing is motivating calls for a supportive industrial ecology and policy framework. However, little is known about factors that stimulate robot adoption at the firm level. Based on survey results of 428 manufacturing establishments, this study examines 1) the current diffusion of robotics in manufacturing and 2) establishment- and region-level characteristics associated with robot adoption. Our analysis showsthat while earlier robot adopters were mainly large establishments in the automotive sector, robots are now penetrating small- and medium-sized establishments and other sectors. Furthermore, being in a a region with a large pool of existing robot users and robot-related skilled labour positively affects establishments’ decisions on robot adoption. These trends suggest cumulative advantage (and disadvantage) regarding technology upgrading and a need for policies that can encourage wider adoption of robots.

INDUSTRIAL POLICY AND COMPETITIVENESS OF THE TUNISIAN MANUFACTURING SECTOR

This paper aims to assess the impact of industrial policy instruments on international competitiveness and in particular on the competitiveness of the manufacturing sector in Tunisia. From a non-stationary panel model composed of 13 Tunisian manufacturing sectors during the period 1995-2016, we show the existence of a long-term cointegration relationship between manufacturing exports and its determinants. The results show that spending on research and development and tertiary education has a positive effect on exports. Hence, it is necessary for the public authorities to intervene within the framework of industrial policy to promote technological innovation and higher education.

Global Economic Planning as a Challenge for the Labour Movement

The central line of argument in this contribution is that the urgency of the economic, social and environmental crises demands to go beyond the institutionalist efforts to install more Global Framework Agreements or Decent Work Campaigns that often only come with piecemeal changes, if at all. The social uprisings in various countries around the globe that erupted in 2019 and 2020 underline the emerging pressure towards a broader vision of systemic change. The shift of emphasis towards Global Economic Planning opens up the following perspectives: 1. It allows to study and adapt the methods used by transnational corporations in economic planning for alternative purposes. 2. It allows to retrieve experiences made both in capitalist planning, i.e. in the framework of industrial policy and developmental states, and in socialist planning and to apply enhanced versions of both. 3. It allows to intervene strategically in order to exploit the potentials of renewable energy for which investment is stagnating globally. 4. It offers an avenue for the labour movement to become a reliable partner of environmental initiatives and the global climate movement. 5. It can provide an avenue for mass participation in systemic change with concrete objectives like the conversion of the automobile industry, decentralised renewable energy grids, and public and community based health and care systems.

An industrial policy framework for transforming energy and emissions intensive industries towards zero emissions

ABSTRACT The target of zero emissions sets a new standard for industry and industrial policy. Industrial policy in the twenty-first century must aim to achieve zero emissions in the energy and emissions intensive industries. Sectors such as steel, cement, and chemicals have so far largely been sheltered from the effects of climate policy. A major shift is needed, from contemporary industrial policy that mainly protects industry to policy strategies that transform the industry. For this purpose, we draw on a wide range of literatures including engineering, economics, policy, governance, and innovation studies to propose a comprehensive industrial policy framework. The policy framework relies on six pillars: directionality, knowledge creation and innovation, creating and reshaping markets, building capacity for governance and change, international coherence, and sensitivity to socio-economic implications of phase-outs. Complementary solutions relying on technological, organizational, and behavioural change must be pursued in parallel and throughout whole value chains. Current policy is limited to supporting mainly some options, e.g. energy efficiency and recycling, with some regions also adopting carbon pricing, although most often exempting the energy and emissions intensive industries. An extended range of options, such as demand management, materials efficiency, and electrification, must also be pursued to reach zero emissions. New policy research and evaluation approaches are needed to support and assess progress as these industries have hitherto largely been overlooked in domestic climate policy as well as international negotiations. Key policy insights Energy and emission intensive industries can no longer be complacent about the necessity of zero greenhouse gas (GHG) emissions. Zero emissions require profound technology and organizational changes across whole material value chains, from primary production to reduced demand, recycling and end-of-life of metals, cement, plastics, and other materials. New climate and industrial policies are necessary to transform basic materials industries, which are so far relatively sheltered from climate mitigation. It is important to complement technology R&D with the reshaping of markets and strengthened governance capacities in this emerging policy domain. Industrial transformation can be expected to take centre stage in future international climate policy and negotiations.

The Korean government’s public health responses to the COVID-19 epidemic through the lens of industrial policy

ABSTRACT The paper explores the idea that the success of the Korean government’s non-pharmaceutical interventions in response to the COVID-19 epidemic can be better understood through the lens of industrial policy framework than many descriptive public policy literatures that have merely focused on administrative efficiency. It is emphasized in this paper that the Korean government has maintained sustained R&D support, tax subsidy, and various forms of public–private partnerships to help nurture and grow domestic infant industry in such strategic industrial areas as information-communication technology, biotechnology and health care, and pharmaceutical industry for a long time, and this soft industrial policy has enabled the public health authority to implement a series of successful non-pharmaceutical public health measures to suppress and mitigate the spread of the novel coronavirus.

The Korean Government’s Public Health Responses to the COVID-19 Epidemic through the Lens of Industrial Policy

The paper explores the idea that the success of the Korean government's non-pharmaceutical interventions in response to the COVID-19 epidemic can be better understood through the lens of industrial policy framework than many descriptive public policy literatures that have merely focused on administrative efficiency. It is emphasized in this paper that the Korean government has maintained sustained R&D support, tax subsidy, and various forms of public-private partnerships to help nurture and grow domestic infant industry in such strategic industrial areas as information-communication technology, biotechnology and health care, and pharmaceutical industry for a long time, and this soft industrial policy has enabled the public health authority to implement a series of successful non-pharmaceutical public health measures to suppress and mitigate the spread of the novel coronavirus.

Three Dimensions of Green Industrial Policy in the Context of Climate Change and Sustainable Development

Climate change has taken an increasingly important space in the development agenda. However, whether most countries can meet the challenge of mitigating climate change while simultaneously ensuring growth and poverty reduction remains debatable. This research contributes to the growing literature at the intersection of environment sustainability and economic/industrial development by identifying three dimensions of Green Industrial Policy (GIP), which rely on different approaches to mitigate climate change. Those three dimensions are (i) the consumption-centred dimension; (ii) the firm-level sustainability dimension, and (iii) the productionist innovation-driven dimension. This paper then applies this green industrial policy framework and examines the implications of pursuing different levels of GIP by drawing on a country case study (Ecuador). Two main findings arise from this study. First, a greener consumption is necessary but can hardly be achieved without industrial policies to stimulate green manufacturing and low-carbon innovation. Green industrial policy, therefore, has a central role to play in the structural transformation towards a low-carbon future. Second, a holistic and complementary approach is needed across the three dimensions of green industrial policy to ensure a coherent and developmental transition towards a low-carbon economy.