Industrial Policy Research Articles

Unlocking the potential: Insights from industry on barriers, solutions and policy gaps in Ireland's energy storage sector

The energy storage sector across Europe faces many financial, regulatory and policy barriers which has to date hindered development in many countries. This study documents industry perspectives from Ireland, a country which requires a significant increase in the development of energy storage due to security of supply concerns, its isolation from Europe’s central transmission network and its reliance on wind energy as a primary intermittent renewable energy resource. Using focus groups and a survey with the renewable energy and storage sector, we document perspectives on the critical barriers, innovative solutions and policy gaps identified by industry stakeholders and policy makers. Our participants believe energy storage will play a crucial role in unlocking Ireland’s substantial wind energy potential in order to meet its energy security and climate aspirations. However, our respondents suggest that unlocking this potential will require a coherent national energy storage strategy designed to reduce curtailment, identify storage technologies with duration-specific targets and establish a more comprehensive renewable energy plus storage power procurement mechanism designed for the Irish market which supports the grid, rewards low carbon technologies and reduces emissions.

Ecosystem model of development of the unmanned aircraft systems industry

The article analyzes the structural transformations of Russian industry in the context of external constraints and the need to ensure technological sovereignty in high-tech industries. The scientific hypothesis of the work is the assumption of the importance of cross-sectoral coordination of subjects of industrial policy in order to develop the production of critical products. The digital industrial ecosystem of the unmanned aircraft systems (UAS) industry is considered as an object of research. The purpose of the research is to develop the foundations of the structure of the ecosystem model of the development of the UAS industry and substantiate the feasibility of its application in the interests of improving high-tech industries of the Russian Federation. The article offers the author’s interpretations of the concepts of “digital industrial ecosystem” and “cross-industry ecosystem”, substantiates the principles of functioning of the ecosystem model and its architecture. An ecosystem model of the development of the UAS industry was developed, including management bodies, technical infrastructure, organizational and economic tools, technological clusters and a network of participants. The main distinguishing features of the proposed model from the existing ones are: the distribution of ecosystem management bodies that ensure the autonomy of management at all horizontal and hierarchical levels of its organization; the ecosystem is considered as an instrument of the mechanism of strategic development of high-tech industries involved in the creation of civil-purpose UAS, and provides cross-industry interaction of participants in order to accelerate the development of industrial production and the formation of the UAS market. The ecosystem management model will ensure the possession of up-to-date data of actual and planned indicative evaluation indicators of the state and development of the industry on a time scale close to real, based on the principle of digital transparency.

Competition and Industrial Policies: Complementary Action for EU Competitiveness

Competition and Industrial Policies: Complementary Action for EU Competitiveness

How to Institutionalise European Industrial Policy (for Strategic Autonomy and the Green Transition)

How to Institutionalise European Industrial Policy (for Strategic Autonomy and the Green Transition)

Empirical evidence on the impact of the "new round" of Sino-US trade frictions on China's foreign trade industrial policy and high-quality development.

The global attention on industrial policy's effectiveness spans across various sectors, particularly in international trade where the focus is on enhancing the quality of foreign trade, which is crucial to understand how research hotspots and key issues can synergize. We consider the 2018 "new round" of Sino-US trade friction as an external event and analyze panel data from 2009 to 2022 comprising 1141 Chinese A-share listed enterprises. Our empirical research unequivocally demonstrates that industrial policy has significantly propelled China's foreign trade towards high-quality development by 1.8240%. We conducted rigorous tests for robustness, heterogeneity, and endogeneity. Additionally, our results reveal that inhibitory influences arising from industrial policy on total assets or R&D investment attenuate this promotion effect; There exists a diminishing promotion effect between total assets and R&D investment. Our paper provides valuable insights into understanding their logical relationship while offering guidance for enterprises, markets, and governments in overcoming challenges collectively.

Origin of the Fourth Industrial Revolution: manufacturing predictions preceding Industrie 4.0

Purpose The Fourth Industrial Revolution is a prominent area of interest in the field of manufacturing that is bringing about revolutionary changes. In this study, the authors sought to determine whether professionals in academia or industry could have predicted the composition of advanced technologies associated with Industry 4.0 before Germany's Industrie 4.0 policy announcement. The purpose of this paper is to use the process for identifying technologies that can be included in industrial policy to improve national competitiveness in manufacturing. Design/methodology/approach Relevant documented research from 2000 to 2012 was identified and captured using a systematic literature review. The significant technological advancements during this period were analyzed to determine how technological innovations may have affected predictions about the future of manufacturing. The identified predictions were analyzed using an open-source natural language processing code that clustered relevant topics in the predictions that indicated common themes. The results were then compared to the ideas within “Industry 5.0”. Findings The results of this study showed that an aggregate analysis of manufacturing predictions would have preemptively revealed the Fourth Industrial Revolution and could have been used to inform industrial policy that could accelerate technology adoption. Also, contrary to popular belief, the popular Industry 5.0 is a sematic exemplification of a concept already embedded within the origins of the Fourth Industrial Revolution. Practical implications By examining the provenance of the Fourth Industrial Revolution, lessons are learned that bring light to Industry 4.0 and the measures that can be taken to enable the advancements that it brings. The results of this study show that is would be wise for government policymakers to enact programs that monitor the manufacturing predictions coming out of academia and to analyze them aggregately using natural language processing as a means to identify the next evolutions and revolutions and to mobilize policymakers to enhance outcomes of enacting policy. Originality/value Despite high hopes for the realization of Industry 4.0, there has been little discussion about the technological innovations and events that occurred to enable it. To the best of the authors’ knowledge, this is the first study that has determined that an aggregate analysis of manufacturing predictions would have preemptively revealed the Fourth Industrial Revolution. The success of the methodology used in this study has theoretical implications in support of natural language processing (NLP) being used to inform national policy.

Relatedness and economic complexity as tools for industrial policy: Insights and limitations

The use of relatedness and economic complexity (REC) to advise on industrial policy is expanding. Typically, it leads to the recommendation to (not) support activities that are (un)related to a region’s comparative advantages. Yet, the implications of such use remain largely unaddressed. Drawing on developmental state and innovation studies, I identify two reasons for caution when using REC for policy purposes. First, technological and economic catch-up may require diversification toward unrelated activities. Second, REC focuses exclusively on domestic supply, ignoring demand and international competition. In addition, I highlight conceptual and methodological limitations that are likely to affect REC’s policy implications. Most notably, REC literature might overestimate the magnitude and significance of relatedness, while overlooking the contribution of policy to past diversification outcomes. This paper shows that while REC metrics can provide valuable insights into patterns of structural change, their use in industrial policy requires the concurrent assessment of other crucial elements, including the environmental footprints of diversification options and the dynamics of international supply and demand.

Green and economical transesterification of castor oil for biodiesel production via a novel bentonite based Li2SiO3-LiAlO2 composite: Process technology & production feasibility

In our work, a highly efficient Li2SiO3-LiAlO2 composite was designed via a simple solid-state reaction using bentonite as raw material and successfully applied to the transesterification of castor oil with methanol for biodiesel production. The preparation processes for the bentonite-based Li2SiO3-LiAlO2 composite (Li/Bent) were optimized, and the prepared Li/Bent catalyst was characterized using a variety of experimental techniques. The maximum oil conversion to biodiesel of 97.16% was obtained under reaction temperature of 65 °C, reaction time of 90min, catalyst amount of 4wt.%, and methanol/oil molar ratio of 15:1. The possible mechanisms of the reaction process were revealed. The preliminary analysis of technical feasibility for the production showed that Li/Bent composites catalyzed castor oil production of biodiesel had competitive advantages in terms of market demand, industrial policy, process technology, environmental impact and economic benefits. The high efficiency and good stability of the catalyst reflect the technical advantages of the process. According to the study of environmental factor and process mass index, the synthesis process of biodiesel generated low waste, which was a green and environment-friendly process. Finally, the economic evaluation showed that the biodiesel production from castor oil catalyzed by Li/Bent catalyst was a cost-effective and low risk process.

Firms’ location decisions, supply chain disruptions and government subsidies: A dynamic game

This paper develops a dynamic game to study the interaction between firms’ production location decisions and a government subsidy policy. On the one hand, firms consider the cost of shielding their production capacity from (potential) supply chain disruptions. On the other hand, the government is interested in curbing production offshoring to increase domestic tax revenues. The location decision of each firm is affected by the government subsidy policy and the location choices of other firms, while the share of firms producing domestically influences the government’s decision on whether and to what extent to provide subsidies to firms. We show that government subsidy policy must target a sufficiently large number of firms to encourage production reshoring and achieve the Pareto-efficient equilibrium. However, a subsidy policy providing a high number of low subsidies is likely to be ineffective in increasing domestic production, highlighting the importance of careful fine-tuning of the policy. Finally, in some scenarios, industrial policy becomes crucial to increase the resilience of domestic supply chains and foster reshoring.

Reexamining exposure from truck emissions considering daily movement of individuals

With the growing demand for urban freight transportation, trucks emit a large amount of pollutants such as particulate matters and nitrogen oxides, increasingly affecting public health. This study establishes a modelized air dispersion structure to simulate pollutant concentration distribution. By integrating multiple data sources including mobile phone signals and satellite images, we reconstruct the daily trajectories of individuals and further incorporate simulated pollution concentrations in calculating dynamic and static exposure of individuals to truck emissions. Econometric models considering spatial dependence are developed to evaluate the influencing factors and elucidate the mechanisms of pollutant exposure. Results show factors including freight demand, road network, residential and employment locations, personal commuting distance, and population age structure matter in assessing truck emission exposure. As a result, a mixture of vehicular emission standards, urban traffic control, land planning, and industrial policies is proposed to reduce truck pollutant exposure and safeguard public health.

Industrial Policy and Democratic Corporate Governance: Perspectives from the BNDES Case

In the early twenty-first century, Brazil underwent a remarkable economic boom, primarily driven by the Brazilian National Bank of Economic and Social Development (BNDES). This state-owned financial institution spearheaded a new industrial strategy, sponsoring domestic companies, such as Odebrecht and JBS, to their internationalisation. Nevertheless, this initial successful story took a dramatic turn. Over the years, the Brazilian national champions found themselves involved in corruption scandals, human rights violations and environmental damage, with BNDES indirectly funding these activities. This article seeks to discuss this crony capitalism arrangement, examining the role of corporate governance in safeguarding industrial policy from capture. We conclude by exploring how a democratic model of corporate governance could provide some insights for addressing this issue.

Industrial Policy in Productive Area: Aspects of Ecosystem Development

Industrial Policy in Productive Area: Aspects of Ecosystem Development

Assessing the economy-wide impacts of digital transformation in the Korean economy: A social accounting matrix multiplier approach

This study assesses the economic impact of digital transformation (DT) in Korea by utilizing a Social Accounting Matrix to explore interconnections across various datasets. Through a social accounting matrix multiplier analysis, this study empirically identifies the production inducement, income inducement, and income distribution effects driven by DT-related infrastructure investments. We analyze how DT influences production, income, and income distribution through infrastructure investments, focusing on its effects on the labor market and household income. The findings indicate that DT accelerates economic growth, favoring digital capital-intensive industries and high-skilled labor, potentially increasing employment polarization and exacerbating income inequality. This study highlights the need for dual approach as to enhance national competitiveness and inclusiveness in an economy driven by DT technologies. This approach involves two key components that work synergistically to maximize the benefits of DT while addressing its potential challenges, suggesting that industrial and innovation policies should be reconstructed to align with the demands of a DT-driven economy.

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.

‘For the Betterment of the Industry’: The establishment and work of the White Fish Commission, 1936–1939

Between the wars, the British fishing industry faced an invidious economic climate. Costs rose, over-fishing and falling prices depressed incomes, and structural faults that had mattered little in the years of growth prior to 1914 became serious handicaps. Government was thus obliged to intervene in a small but strategically important industry to a far greater extent than before, and did so in ways that reflected the broader thrust of interwar industrial policy. The Herring Industry Board has been well studied but the short-lived parallel body established to develop the bulk of the sea-fishing industry, the White Fish Commission, is all but forgotten, perhaps unsurprisingly since it did not even publish a report before it was suspended on the outbreak of the Second World War. This article surveys the situation facing the fishing industry between the wars and examines in detail the establishment of the White Fish Commission and its activities during its short life. It argues that, while the commission’s powers and resources were insufficient for the scale of its task, it laid the groundwork for much further-reaching intervention in the changed climate after 1945.

Does rising land price promote the circulation industry development? An analysis of internet-based moderating effects

With the rapid development of the Internet, digital technology is increasingly integrating into the modern circulation system. The influence mechanisms of land prices on the development of the circulation industry are gradually transforming. Using data from 104 major cities in China from 2003 to 2021, this study uses the panel two-way fixed effects model, moderating effects model and threshold regression method to examine the mechanisms by which land prices affect the circulation industry development and the moderating role of Internet development. The results show that elevated land prices significantly stimulate the growth of the circulation industry, leading to an expansion in the circulation industry scale, optimization of its structure, and enhancement of its facilities. The findings remain robust even after addressing endogeneity concerns and conducting various robustness tests. Moreover, the impact of high land prices on the circulation industry is more pronounced in small and medium-sized cities group as well as central region cities group. Real estate investment and industrial structure upgrading are the key channels through which high land prices promote the development of the circulation industry. Additionally, Internet development has a positive moderating effect on the promotion that high land prices stimulate the development of the circulation industry. Notably, only when Internet development surpasses a certain threshold that the promotional effect of land prices on the circulation industry development be fully realized. Based on the above conclusions, the government should continue to deepen the market-oriented reform of land elements, implement precise industrial policy support for the circulation industry and promote circulation digital transformation.

Industrial policy persistence and local economic performance: The role of subsidy allocation in China

The persistence of economic policies is crucial for their effectiveness and economic outcomes. However, debates on industrial policy effectiveness have primarily focused on policy tools and target sectors, with little attention given to policy persistence. This paper addresses this gap by evaluating how policy persistence during subsidy implementation affects policy effectiveness. We measure policy persistence using cosine similarity between vectors reflecting the cross-industry distribution of subsidies over consecutive years and instrument it with the occurrence of abrupt public safety incidents. Our results reveal a significantly positive effect of subsidy allocation persistence on local economic performance. This effect is stronger when local governments are influential or industries need consistent government support and weaker when policy changes are more predictable or local officials are less prone to decision-making mistakes. We further provide micro-level evidence showing that the persistence of industrial policies impacts local economic performance by influencing the activities of local businesses.

Совершенствование подхода к управлению мерами государственной поддержки предприятий в ходе реализации промышленной политики

Issues of the effectiveness of the implementation of industrial policy and measures of state support for industrial enterprises have reached the level of state strategic decisions in connection with the emergence of new external and internal challenges facing Russia today. The main problem that urgently needs to be solved is the development of mechanisms for implementing state policy in terms of the application of state support measures in the context of ongoing sanctions and political pressure. The authors of the article presented an evolutionary cross-section of the content of industrial policy, provided criteria for classifying its instruments and forms of implementation through a description of government support measures. Consideration of industrial policy from the historical and functional side at the macro- and meso- levels (specific territory and specific industry) contributed to the systematization of government support measures for industrial enterprises. The relevance of the research interest is related to the fact that with a significant number of publications in Russia and abroad concerning the issues of improving industrial policy and measures of state impact on industrial facilities, the problem of appropriate effective methodological and practical support for the management of state support measures remains unsolved. The article presents a systematization of state support measures for industrial enterprises, a critical analysis of the methodology for selecting enterprises receiving state support, an assessment of the results of the implementation of the applied system of support measures, as well as the reasons for the gap between the stated goals of industrial policy and its actual results. In this scientific article, the authors propose to improve the approach to assessing enterprises that are recipients of government support in order to ensure that their choices comply with the goals of industrial policy.

Empowering Innovators: Accelerating Entrepreneurial Growth Through the Mudra Scheme

India is a developing country with a large population and ranks eighth in terms of size. Its vast population indicates a sizable potential market and highlights the increasing need for employment. In the current decade, India is making significant strides toward implementing laws that encourage start-ups and create a business-friendly environment. Globalization and technological advancements have fostered a competitive atmosphere that necessitates the development of innovative systems. As competition grows, more people are recognizing the benefits of self-employment. In India, entrepreneurship has the potential to serve as a solution for urgent issues such as homelessness and unemployment. In light of these benefits, the government has periodically launched several initiatives to support the growth of entrepreneurship in the country. These initiatives include industrial policies, five-year plans that prioritize the development of the small-scale sector, the creation of Special Economic Zones (SEZs), the establishment of institutions dedicated to entrepreneurship, the organization of Entrepreneurship Development Programs (EDPs), and other government initiatives. Currently, there are fewer job opportunities in India's public and large-scale industries. However, globalization has created numerous opportunities that are waiting to be seized. Entrepreneurs in India could potentially propel the country to the brink of becoming an economic superpower. This paper provides an overview of the government scheme, namely the Pradhan Mantri Mudra Yojana (PMMY), aimed at promoting new-generation entrepreneurs in India.

Power battery modular innovation investment strategies with government subsidy policies

This paper investigates the closed-loop supply chain decisions of battery manufacturers considering innovation investments and different subsidy methods provided by the government. The analysis encompasses four scenarios: whether battery manufacturers engage in innovation investments and whether the government opts for technology R&D subsidies or production subsidies. The study finds that innovation investments by battery manufacturers can enhance the modularization level of batteries. The reward or penalty measures for recycling quality imposed on automobile manufacturers elevate the quality of battery recycling, and also increase the wholesale price of batteries and the retail price of automobiles. After implementing R&D and production subsidies, both the modularization level of batteries and the profits of supply chain members exceed those without subsidies, though these subsidies do not affect the quality of battery recycling. R&D subsidies more effectively promote innovation capacity and product quality among battery manufacturers, whereas production subsidies more significantly boost the profits of both battery manufacturers and automobile manufacturers. Therefore, subsidy measures should be tailored according to different stages of the power battery industry's development. Regardless of whether battery manufacturers invest in innovation or whether the government provides subsidies, collaboration between battery manufacturers and automobile manufacturers is essential to coordinate the closed-loop supply chain. The research findings offer valuable guidance for formulating subsidy policies in the new energy vehicle industry across different periods, and also provide theoretical insights for decision-making behaviors among related enterprises.