13: The reemergence of industrial policy amidst climate change and geopolitics (Nicholas Martin, Jakob Edler, Karoline Rogge)
Industrial policy may never have really gone away, but it certainly is back. The Biden Administration has mobilised over US$1.2tn for industrial policy initiatives. Europe is deploying new measures to support perceived strategic sectors. Since ~2006 China has developed highly ambitious industrial policies. A reappraisal is happening even among neoclassical economists. While today’s industrial policies are partly motivated by similar concerns as those of the past, climate change, decarbonisation and geopolitical turmoil have deepend the sense of urgency. But for all the new enthusiasm, critiques of industrial policy remain salient, including concerns about rent-seeking, capture, bad technology bets, market distortions, capital misallocation, insufficient institutional capacity, and opportunity costs. This track calls for conceptual, empirical, and methodological contributions on the discussions around and implementation of industrial policy and its linkages with innovation policy and net-zero transitions. We understand industrial policy as “any selective, targeted state intervention that tries to alter the structure of production toward sectors, technologies or tasks that are expected to better meet state goals than would occur absent intervention, in market equilibrium”. This ‘vertical’, sector-specific focus distinguishes industrial policy from sector-agnostic ‘horizontal’ policies. We invite conceptual, especially, empirical papers tackling the following questions, but the track is not limited to them:
• What are the main characteristics of the current wave of industrial policies? How do they differ from previous ones and across jurisdictions? Do we see distinct styles of even “varieties” of industrial policies? If so, what implications might they have for innovation, decarbonisation, and speed of transition?
• How is the EU, European and overseas countries reacting to the US industrial policies, with what implications?
• How are industrial, innovation and other policies coordinated and combined in different countries? What institutional arrangements exist for this, and what distinct effects do they produce?
• What overlaps, synergies and tensions exist between industrial, innovation and transition policies? How can synergies be realised and tensions reduced?
• What – if anything – can industrial policy accomplish for innovation or transition that other policies cannot? How do sectoral industrial policies and “horizontal”, non-sector-specific policies like carbon pricing or startup support interact?
• How does industrial policy influence the politics of net-zero transition and/or innovation, whether by creating new interest groups, re-channelling funding and political attention, or reshaping discourses?
• What are the politics of industrial policy? What support and opposition coalitions and discourses are emerging? How do these fit into or reshape existing cleavages?
Keywords: industrial policy, transition, innovation policy, decarbonisation, policy analysis