Industrial Policy: Succeeding in the Race to the Technological Frontier 

Globalization, once driven by cost optimization and efficiency, is giving way to a new paradigm defined by industrial resilience, technological sovereignty, and supply chain control. Power is no longer measured solely by GDP, but by a country’s ability to design, produce, and control critical technologies. 

The United States, China, and Europe are now engaged in a systemic industrial competition:  

• The U.S. is mobilizing massive resources to secure leadership in semiconductors and artificial intelligence
• China continues its structured ascent toward manufacturing and technological dominance
• Europe seeks to preserve its industrial base while adapting to an increasingly fragmented global system 

Competition now takes place as much in laboratories as in factories.

Industrial policy has re-emerged as a central lever of power. Far from merely correcting market failures, governments are now:  

• Guiding strategic sectors
• Coordinating industrial ecosystems
• De-risking investments
• Shaping market conditions  

This marks a fundamental shift: the state is no longer a passive regulator but an active architect of competitiveness. 

More than 2,500 industrial policy measures were recorded globally in 2023 alone, reflecting:  

• The need to secure supply chains after recent systemic shocks
• The race to capture value from energy and digital transitions
• Increasing geopolitical tensions and economic fragmentation 

This dynamic is self-reinforcing: each intervention by one major power triggers responses from others, fueling a global escalation. 

Industrial policy encompasses all public interventions aimed at structurally improving the performance of domestic firms. It operates at the intersection of multiple policy domains:  

• Economic and trade policy
• Innovation and technology
• Climate transition
• National security
• Employment or regional development 

However, there are inherent tensions between:  

• Innovation vs. Employment
• Growth vs. Climate Objectives
• National Sovereignty vs. Global Trade
• Competition vs. Industrial Protection  

Without clear prioritization and coherence, industrial policy risks dilution, inefficiency, or contradiction. 

Traditionally, industrial policy has oscillated between two approaches:  

• Horizontal policies: improving general framework conditions (skills, infrastructure, regulation)
• Vertical policies: targeting specific sectors or “national champions” 

Today, these approaches are increasingly combined. 

Emerging technologies have historically relied on targeted intervention to catch up technologically, while advanced economies now re-adopt selective policies to maintain leadership and secure strategic industries. 

Industrial policy is both a powerful lever and a source of risk. 

Benefits:  

• Strengthens technological sovereignty
• Secures supply chains
• Accelerates the energy transition
• Creates high-value jobs
• Positions countries in future markets  

Risks:  

• Market distortions and subsidy races
• Fragmentation of global trade
• Rent-seeking and inefficient allocation of capital
• Budgetary pressure
• Slower global diffusion of green technologies  

The challenge lies in maintaining a delicate balance between strategic ambition and economic efficiency. 

In this new landscape, industrial policy is no longer optional. It is a structuring force of global competition. 

For both public and private actors, key questions emerge: 

• Where are the critical dependencies in value chains?
• Which sectors are truly strategic versus politically visible?
• How can organizations position themselves within evolving ecosystems?
• Which policy instruments create value, and which distort it?  

Succeeding in the race to the technological frontier requires more than ambition. 

It demands: 

• Strategic coherence
• Execution capacity
• Alignment between public and private actors
• Long-term commitment  

The core lesson is simple: 
industrial performance is not about moving fast. It is about building accurately and sustainably over time. 

In an increasingly complex and fragmented industrial landscape, navigating industrial policy is no longer just about compliance. It is about strategic positioning and value creation. 

Sia supports both public and private decision-makers in turning industrial policy into a competitive advantage, not a constraint. 

1. Strategic positioning & sector prioritization 

We help identify what is truly strategic versus what is merely visible: 

• Prioritization of sectors and technologies aligned with national or corporate objectives
• Assessment of competitive positioning within global value chains
• Identification of growth opportunities and white spaces  

2. Value chain analysis & dependency mapping 

We provide a granular understanding of industrial ecosystems: 

• Mapping of critical dependencies (materials, components, technologies, suppliers)
• Identification of vulnerabilities and resilience gaps
• Strategic recommendations for localization, diversification, or partnerships  

3. Industrial policy navigation & design 

We guide clients through complex policy environments: 

• Analysis of existing policy instruments (subsidies, tax credits, regulation, procurement)
• Support in designing effective, coherent, and targeted industrial strategies
• Alignment of public policies with industrial capabilities and market realities  

4. Investment strategy & project structuring 

We help translate strategy into execution: 

• Identification and securing of public funding opportunities
• Structuring of industrial projects (sites, partnerships, financing)
• Support in stakeholder engagement and public-private coordination  

5. Risk management & resilience building 

We turn uncertainty into actionable insights: 

• Prioritization of risks across supply chains and operations
• Scenario analysis in a context of geopolitical and regulatory volatility
• Design of resilience strategies without unnecessary relocation costs  

Our ambition is clear: help clients move beyond complexity, make informed decisions, and position themselves at the heart of tomorrow’s strategic value chains.