Industrial Policy Research Articles

Changes in Revealed Comparative Advantage in Machinery and Equipment: Evidence for Emerging Markets

The paper computes Balassa’s index of revealed comparative advantage for machinery and equipment (a rough proxy for high-tech goods) for a number of emerging areas (East Asia, South-East Asia, South Asia, Eastern Europe, Latin America, Africa, and the Middle East) and for selected individual countries over some 50 years, from the early 1970s to the early 2020s. The focus is on why some economies were successful in promoting high-tech sectors. As could be expected, experience differs hugely. In some countries, interventionist trade or industrial policies were crucial in fostering comparative advantage. In others, however, the role of policies appears to have been minor and successes were achieved thanks to the free play of market forces (including an important contribution, at least in some countries, coming from foreign direct investment).

Who drives the green shift? EV and battery policymaking and systemic marginalisation of auto suppliers in South Korea

The swift global transition to electric vehicles (EV) and batteries in the automotive industry highlights the nature of governments’ efforts towards a green economy, marking a transition from environmental regulations to industrial policies. This shift has led to renewed interest in industrial policies, especially in East Asian developmental states, like South Korea. The EV and battery industries in South Korea have grown rapidly along with the government's efforts to mobilise the entire economy through aggressive green industrial policy, particularly during the Lee Myung-bak administration (2008–2012). Big Korean automobile and electronics manufacturers have participated directly in setting the country's industrial agenda, leading the green industrial policy with their business interests. However, the process of EV and battery policymaking also marginalized auto suppliers in the existing manufacturing sector from agenda setting. Focusing on business’ structural power, this paper explains how big business elites systematically alienate small and medium-sized suppliers from the new growth policy thanks to their strong information monopoly in the hierarchical structure of production in the automobile industry and EV policies in South Korea.

The environmental consequences of industrial agglomeration: New evidence from city-level data in China

In the context of sustainable development, environmental policies increasingly focus on reducing carbon emissions worldwide. Industrial agglomeration (IAGG) has emerged as a potential factor in achieving this objective by reducing carbon emissions and improving air quality. This study examines the direct and indirect impacts, spatial dynamics, and policy impacts of industrial agglomeration on air pollution levels. Panel data from 278 cities in China between 2011 and 2020 are utilized to investigate the potential of industrial agglomeration to reduce air pollution. Multiple regression models are employed, these models explore the mechanisms through which industrial agglomeration can have a positive effect on air pollution, highlighting economic growth, inclusive finance, digital economy and technological innovation as crucial factors. The study also investigates the spatial spillover effects of industrial agglomeration, finding that the concentration ratio and specialization of neighbouring cities significantly contribute to local air pollution levels. Furthermore, this contribution increases progressively with distance. The study investigates the spillover effects of environmental pollution and industrial agglomeration-related policies on PM2.5 concentration, concluding that such spillover effects lead to a decrease in PM2.5 concentration in neighbouring locations.

Prediction of Market Share of Different Vehicle Powertrains on Interprovincial Highways amid the Development of Urban Agglomerations

In the coordinated development of urban agglomerations in China, inter-city connections within urban agglomerations have been gradually strengthened, with more interprovincial highways built. Given the complex geological conditions, interprovincial highways often require tunnels. The construction of tunnel ventilation facilities needs to take into account the types of vehicle, traffic flows, and the market share of different vehicle powertrains using the highways. This paper aims to develop a method to predict the future market share of the powertrains of different types of vehicle on the interprovincial highway. The paper builds a policy cluster by analyzing the regional policies for new energy vehicles and then builds a parameter cluster by summarizing industry reports, expert opinion, and policy clusters to predict the market share of different vehicle types categorized by powertrains. Finally, based on the historical vehicle stock data, and using vehicle sales and scrappage rate models, the paper builds a future stock cluster to estimate the annual stock share of different vehicle powertrains up to 2045. The paper applies the method to the interprovincial highway S7 in the Yangtze River Delta urban agglomeration. It obtains the future trend of the market share of the powertrains of different vehicle types on S7 in the target year, validating the model. The results show that the share of new energy vehicles on the S7 highway will increase gradually until 2025. Electric vehicles will dominate the growth, with light trucks forming the highest proportion, followed by cars, and finally buses and heavy trucks.

Retooling the regulation of net-zero subsidies: lessons from the US Inflation Reduction Act

Abstract The US Inflation Reduction Act (IRA) has heralded the advent of a new era of industrial policy within and beyond the USA. As the net-zero economy transition unfolds and national economic security paradigms entrench, industrial policy is here to stay. Net-zero subsidies are employed as multipurpose policy tools to promote domestic manufacturing, de-risk from China, and boost the net-zero transition. This new scenario prompts a fresh look at old questions surrounding environmental subsidies and their justification, actionability, and countervailability. This article makes three contributions. First, it articulates a conceptual framework to assess questions surrounding the justification of net-zero subsidies. It advocates a direct focus on their environmental effectiveness, drawing a distinction between justifiable trade-distorting effects and unjustifiable protective or discriminatory application associated with the pursuit of reshoring or geopolitical goals. Second, it employs a careful analysis of different IRA tax credits to operationalize the article’s framework and test its robustness. Third, it draws on legal and economic insights to shed some light on the environmental effects of different groups of net-zero subsidies. On these grounds, it advances a streamlined three-fold categorization and demarcates the boundaries within which different subsidies should be justifiable, non-actionable and non-countervailable.

Nordic perspectives on the emerging biochar business

Biochar production offers various benefits related to climate change mitigation, circular economy, waste management, renewable energy, and reduced dependency on fossil carbon. Despite these advantages, the biochar market in the Nordic region is still developing. This study explores the current state and future potential of the Nordic biochar market, identifying existing and potential market segments, the role of biochar and its co-products, and factors affecting market growth. The study involved an online survey conducted in 2021, targeting key Nordic biochar stakeholders, including business actors, academic researchers, and other relevant groups (N = 72, representing 64 organizations). The findings reveal that the Nordic biochar market is in its nascent stages, with producers often considering biochar production as a side business. The market faces challenges such as inadequate legal and policy support, limited public awareness, lack of established norms, and uncertainties regarding profitability, technological efficiency, and market potential. However, the industry holds substantial growth potential due to its environmental and climate benefits, provided that current barriers are overcome. Key applications of biochar include carbon removal, water filtration, soil remediation, landscaping, and composting. Additionally, co-products such as energy-dense gases and bio-oil have the potential to enhance the economic viability of biochar production. To facilitate market development, integrating established scientific knowledge into industry standards and policies is crucial. The study underscores the importance of biochar networks and associations in advocating for industry development and highlights the need for enhanced collaboration among stakeholders to overcome existing barriers. Additionally, focused research on the varied applications of biochar is needed, with an emphasis on thoroughly evaluating its environmental, economic, and social impacts.

Foreign Experience In The Transformation Of The Chemical Industry And Its Practical Significance

This article explores the transformation of the chemical industry in developed nations and its implications for Uzbekistan. Despite extensive research on this subject, a knowledge gap exists in understanding how these transformations can be adapted to the Uzbek context. The study uses a comparative analysis of international case studies and Uzbekistan’s industrial policies, focusing on key metrics like asset profitability, innovation, and financial stability. Findings reveal that adopting international practices can significantly enhance efficiency and profitability in Uzbekistan's chemical sector. The results have critical implications for policymakers, highlighting strategies for integrating global expertise into domestic industry practices.

What helps improve outcomes of industrial policy in developing countries? Evidence from Russia

ABSTRACT In developing countries, implementing effective industrial policies faces challenges due to capacity and governance constraints, hindering accumulation of recognised success stories. This impedes our understanding of effective industrial policy tools in countries with accountability deficits. This article explores Russia’s Industrial Development Fund (IDF) support programmes, initiated since 2014, aimed at promoting import substitution through low-interest loans to industrial firms. These IDF programmes appeared to be more effective than most of Russia’s other industrial policy instruments. The article shows that they have resulted in statistically significant sales growth for supported businesses. It highlights institutional features contributing to programme effectiveness, ensuring the integrity of beneficiary selection and project support. It offers valuable insights for organisations implementing state support programmes in challenging governance conditions. Additionally, the recent emergence of more effective industrial policy tools like the IDF may partly explain Russia’s increased economic resilience against international sanctions imposed due to the war in Ukraine.

Captured green aims: The case of Hungary

The article aims to shed light on the environmental risks of the Hungarian autocratic economic policy coupled with increased state interventionism and the revival of industrial policies. Green economic strategies proliferate in democratic countries, but we know less about contemporary hybrid regimes. In the case of Hungary, we show that the pillars of green industrial policy do not exist in practice. There is however a façade and rhetoric of green aims which serve only as one tool among others to rent-seeking and keep the ruling power. By several illustrative cases, we describe the mechanisms of hollowing out, capturing environmental institutions, instrumentalising green aims and repressing civil initiatives as systemic characteristics for illiberal hybrid regimes.

“Open strategic autonomy” as an industrial policy compass for the EU competitiveness and growth: The good, the bad, or the ugly?

“Open strategic autonomy” as an industrial policy compass for the EU competitiveness and growth: The good, the bad, or the ugly?

Geopolitics and geospatial strategies: the rise of regulatory supply chain controls for semiconductor GPN in Japan, South Korea and Taiwan

Abstract In this article, we present an analysis of how East Asian states (specifically, Japan, South Korea and Taiwan) are adapting to the emerging geopolitical contexts of the ‘great powers competition’ between the United States and China. To the extent that the previous literature on GPN/GVC governance included the state as one of the extra-firm actors, geopolitics has not been explicitly dealt with in its role in shaping GPN/GVC governance. We build on the existing research on GPN/GVC governance and propose a shift in perspective, from one of cost-driven to diplomacy-driven governance. Taking the case of the semiconductor industry, we conduct an analysis of native language sources and examine how regulatory supply chain controls are shaping East Asian industrial and trade policies. Specifically, we focus on how East Asian states are negotiating their dependence on the world’s two largest markets, the United States and China, and developing new policy strategies in order to navigate the dual hegemony. The analysis reveals that, while varying strategies are adopted, multilateral alliances of the states are gaining prominence in GPN/GVC governance. We conclude that a more state-centric analysis of GPN/GVC is in order.

A sacrifice for the greater good? On the main drivers of excessive land take and land use change in Hungary

Despite continuous population decline or stagnation, many Central and Eastern European cities experience urban sprawl and expansion, accompanied by excessive land take and land use change. This paper investigates recent trends in land take and land use change in Hungarian cities, aiming to identify the drivers of these processes. The study utilizes the Urban Atlas (UA) databases from 2006 and 2018 to analyze land use change in selected Hungarian cities, employing QGIS software to compile the database and MS Excel to conduct the statistical analysis. A linear trajectory model is employed to project land use change by 2026, based on 2006–2018 UA data. Additionally, via the in-depth analysis of Debrecen, the study highlights the recent acceleration of land use change to compare the projected trend with the forecasted one. Local climate strategies focus on addressing environmental concerns, including changes in land use at the city level. Therefore, this study reviews the relevant documents associated with each city to assess its commitment to reducing land take. The results indicate that despite its declining population, Hungary has seen a significant expansion in artificial surfaces, primarily due to industrialization and population policies introduced by the central government, which is likely to continue in the coming years. Unfortunately, local climate strategies have been insufficient in preventing cities from experiencing urban sprawl and expansion and preserving local ecosystem services. This underscores the inability of municipalities to defend local interests against central government directives. The findings of this study indicate that the current central policies are the main drivers of land take and urban sprawl and expansion. Prioritizing the compact city model and brownfield developments could effectively mitigate these issues. Finally, the paper advocates that complete jurisdiction over land use decisions be restored to local governments, enabling them to reject investments that may jeopardize local environmental goals.

Industrial Policy and its Funding at the Frontier of European Integration: Lessons from the Past and Present Challenges

Industrial policy is back on the agenda of policymakers at a global level. In the EU, industrial policy has a very controversial history: it has been not only conditioned by the multilevel competencies shared between the EU and the Member States, by the different national priorities and the varieties of economic cultures, but also by the crucial problem of resources. Based on archival sources and relevant multidisciplinary literature, the paper traces the emergence of European initiatives in industrial policy from the 1960s until the launch of the Europe 2020 strategy (2010). Following this, the role of the Juncker Plan (2014) in promoting EU industrial policy is examined, highlighting the potential contradiction between ambitious goals and limited resources. Subsequently, an analysis is conducted to determine whether the launch of the new EU industrial strategy in 2020, coupled with the adoption of the Next Generation EU, could offer a blueprint for establishing an ambitious EU industrial policy and represent a potential Hamiltonian moment for the Union.

The Relationship Between Sustainable Human Resource Management and Green Human Resource Management- A Case of Medical Sector in Hyderabad, India

Background: Human Resource Management (SHRM) and Green Human Resource Management (GHRM) are the subjects of this investigation of their interplay in Hyderabad, India's industrial sector. There is a growing need to include eco-friendly practices into HRM due to the increased global focus on sustainability in medical industry. Aim: Sustainable The study's overarching goal is to deduce how green HRM (GHRM) programs and SHRM practices—which prioritize the well-being of employees and the longevity of organizations—are compatible with one another. Method: The study surveyed 409 medical employees in Hyderabad using a quantitative research approach based on questionnaires and the data was analysis using SMART PLS. Results: There is a strong positive relationship between SHRM and GHRM, according to the results, thus businesses that use thorough SHRM are also more likely to use GHRM strategies that work. Human resource managers can help promote a sustainable culture, gain a competitive edge, and advance environmental goals by implementing the sustainable and green practices suggested in the study's conclusion. Conclusion: The study adds to the expanding corpus of literature on sustainable business practices and have important implications for industrial policy and practice.

Effects of Industrial Structure on the Green Utilization Efficiency of Urban Land: A Case Study of the Bohai Rim Region, China

The green utilization of urban land is a critical component of regional high-quality development. Enhancing the green utilization efficiency of urban land (GUEUL) is of great significance to improving the quality of ecological environment and achieving a green lifestyle and low-carbon production. With the process of urbanization, the industrial structure is constantly adjusted, which has an impact on the structure and efficiency of urban land utilization. Taking 43 cities in the Bohai Rim region as an example, the super-efficiency slack-based measure model with undesirable outputs (super-SBM-undesirable model) was employed to evaluate the GUEUL from 2006 to 2021, and the panel quantile model was used to explore the impact of industrial structure on GUEUL. The results showed that the GUEUL in the Bohai Rim region appeared a fluctuating upward trend from 0.664 in 2006 to 0.837 in 2021. High-value zones shifted from western Liaoning province and southern Shandong province to a “C”-shaped belt around the coastline and expanded continuously, while low-value zones decreased significantly. Furthermore, the influence of industrial structure on GUEUL was significantly positive, but there were significant differences among different efficiency levels. Industrial structure upgrading exerted the most significant effect on GUEUL improvement in low-value zones, while industrial structure rationalization was dominant in high-value zones, and the influence of industrial structure technologization was more significant in medium-low-value zones. Therefore, differentiated industrial structure adjustment policies should be formulated based on the actual condition of each city to improve GUEUL.

Fostering Coordination to Bridge the UK's Regional Disparities: A Response to Rachel Reeves's Mais Lecture

AbstractThis article discusses different policy approaches to achieving one of the key goals that Rachel Reeves set out in her Mais lecture in 2024: bridging regional inequalities in the UK. If it is agreed that the unfettered free market economic model pursued by successive governments in recent decades has led to an intolerable regional concentration of high value‐added, innovative production, what alternative policy options are there? The article considers two answers to this question. The first option is to promote innovation through top‐down state intervention in key economic sectors. While this approach is becoming increasingly popular among proponents of industrial policy in advanced economies, its potential to reach a wide range of firms and sectors behind the technological frontier is limited. Instead, the article favours a second, comparatively under‐explored policy option: facilitating inter‐firm and public‐private coordination. Three key policy tools are presented for implementing this second approach in the UK context.

The Impacts on Regional Development and “Resource Curse” by Energy Substitution Policy: Verification from China

With the increasing “resource curse” phenomena relating to energy resources in China, research concerning energy substitution policies has become more meaningful. In this paper, a dynamic CGE model was built to evaluate the impacts of energy substitution policies on regional growth and the “resource curse”. The results show the following: (1) Compared to other regions, an energy substitution policy exerts a more considerable influence on economic growth in regions with high “resource curse”. (2) The changes in carbon emissions in regions with no or low “resource curse” are modest. The primary factor contributing to the rapid decline might be energy structure adjustments. As the intensity of substitution varies, the regional disparities in marginal emission reduction costs are expected to increase. (3) Energy substitution policies reduce the severity of high “resource curse” regions. As the intensity of energy substitution increases, the extent of “resource curse” regions decreases accordingly. Some suggestions are given as follows: (1) Further promote energy substitution and speed up the transformation of energy production and consumption modes in China. (2) Accelerate the energy transformation in “resource curse” regions to promote regional sustainable development. (3) Improve energy substitution policies in transportation, industry and other fields.

Analisis Implementasi Pendidikan dan Pelatihan Human Capital di Industri Kreatif

Creative industries play an important role in the global economy, and the development of high-quality human resources is essential to drive innovation and productivity. The purpose of this study is to analyze the status of the implementation of human resource development and training in the creative industry. Using a qualitative approach, data was collected through in-depth interviews with industry players, academics, and policy makers, as well as analysis of related documents. The results showed that the combination of formal and non-formal education, cooperation between industry and educational institutions, and the use of modern technology play an important role in the development of human resources. Although formal education provides a solid theoretical foundation, non-formal education and technologies such as e-learning and VR can help improve certain practical skills according to market needs. . Collaboration between industry and educational institutions ensures relevant curricula and valuable practical experience for learners. Despite challenges such as limited resources and rapid technological change, effective education and training can enhance the competitiveness and growth of creative industries.

Industrial Policy: Populist and Progressive

ABSTRACT: In contrast to neoliberal economic policy that favors markets, the United States has seen a revival of explicit industrial policy, with government playing a significant directive role in key industries. Surprisingly, industrial policy has support from both the left and the right, creating debates both within and between America's two major parties. Progressives and authoritarians both support some specifics of industrial policy, especially those aimed against China. But overall industrial policy differs sharply between these opposing political movements. Progressives align industrial policy with pro-union, climate-focused, and race and gender equity programs. In contrast, authoritarian industrial policy is part of a larger anti-union, anti-immigrant, and pronatalist agenda. Hence, agreement among progressives and authoritarians over specifics of industrial policy should not mask very deep disagreements on overall policy frameworks.

Strategic foresight as a beacon for the new EU industrial policy

AbstractThis article assesses the impact of strategic foresight in shaping the European Commission’s new industrial policy. It argues that, since it was introduced by President von der Leyen as a political portfolio, foresight has contributed to mainstreaming the concepts of ‘resilience’ and ‘open strategic autonomy’ into the EU's industrial strategy, via the Strategic Foresight Reports and new participatory structures inside and outside the Commission. This responded to the need for building up preparedness in the face of ‘radical uncertainty’ on future supply chain disruptions. We conclude that strategic foresight—if supported by an effective governance—will play an increasingly large role in shaping the EU's future policymaking. In particular, the concepts of ‘competitive sustainability’ and people's wellbeing, advanced by the 2023 Strategic Foresight Report as pillars of open strategic autonomy, may help futureproof the EU's green industrial policy going forward.