By Vishnu Venugopalan
What’s the first word that comes to mind when you hear ‘industrial policy’?
I posed this question to the participants at the start of our seminar on Industrial Policy in Practice, hosted under the Reimagining the Economy project at Harvard Center for International Development. The result of the poll was immediate and revealing. The dominant word was “Subsidy,” followed by its familiar, cynical cousins, “protectionism,” “inefficient,” and “rent-seeking.” The response was the perfect diagnosis of a global conversation stuck in the ghost of an old debate.
But as we explored over four sessions, that debate has been rendered obsolete by reality. Industrial policy is no longer a matter of academic argument, but a fact of modern economic statecraft. From Made in China 2025 to India’s Semiconductor Mission, nations are no longer asking if they should strategically shape their economies, but how well they can execute. This is precisely the challenge we took on in the four-session student seminar. Through detailed case studies, hands-on simulations, and real-world policy analysis, participants were challenged to move beyond theory and into a practitioner’s mindset.
The goal was to leave the seminar not with a rigid ideology, but with practical frameworks to design, implement, and evaluate policies that build productive capabilities. The participants also learned to identify promising sectors, deploy policy tools effectively, and navigate the complex challenges that define industrial development in competitive global markets.
The seminar was structured into the following four sessions.
Session 1: The Building Blocks – The Why and What of Industrial Policy.
Before we could debate the “how,” we had to establish a shared foundation. The session demystified industrial policy by breaking it down into two fundamental questions: The “Why” explores core rationales for government action, which are addressing market failures, seizing strategic opportunities, and driving the structural transformation that leads to higher productivity and better jobs. This was followed by the “What”, mapping the essential architecture of any successful strategy, covering aspects from investment and infrastructure to talent and trade.
To make this tangible, the discussion was anchored in the most critical industry of contemporary times: Semiconductors. This deep dive into the semiconductor industry's past, present, and future made the case for modern industrial policy. The session culminated in a guided discussion where participants began to outline their own strategic thinking, setting the stage for more practical applications to come.
Session 2: Deconstructing Global Value Chains
In this session, we dove deep into a case study on Apple's supply chain, drawing from my paper co-authored with Prof. Chris Miller, “Apple’s Supply Chain: Economic and Geopolitical Implications.” We traced the journey of an iPhone, from advanced chip fabrication in Taiwan to precision components from Japan and final assembly in China and India to reveal the hidden architecture of modern manufacturing. We tackled the critical strategic questions
nations now face on building vs. joining supply chains: is it better to be an indispensable link in someone else's chain, or to build your own? Delving into Industrial Policy in a fragmented world, how do we strategize when supply chains are constantly shifting due to geopolitics? What does resilience really mean, breaking down this buzzword into three distinct levels: the firm, the supply chain network, and the nation. Through this lens, participants had to grapple with the ultimate dilemma: What does it take to move up the value chain? Why do some countries get trapped in low-margin roles while others capture immense value? This session made it clear that participating in the global economy is not passive, it is indeed a series of strategic choices driven by the Industrial policy framework.
Session 3: Making It Happen - The How of Industrial Policy with Prof. Dani Rodrik
The highlight of this session was undoubtedly Professor Dani Rodrik joining us to take on the core challenge of policymaking, the gap between a clean policy framework and the messy, complicated work of implementation. Theory says identify a market failure, design an intervention, and achieve your goal. But reality is a constant battle against inherent tensions with no easy answers. We confronted the questions that keep policymakers up at night:
How do you provide subsidies without breeding cronyism?
Should you chase frontier tech or prioritize creating jobs for today?
Do you push for full integration into global supply chains or build sovereign capacity, even if it’s less efficient?
Drawing on Dani’s decades of research on industrial policy and globalization, ten inherent challenges were identified. The solution, we learned, was that industrial policy is not about “picking winners,” instead, success is about building the state’s capacity to learn while doing. We discussed how outcomes depend far more on a government’s adaptive capability, its ability to experiment, learn from failure, and course-correct, than on having a perfect initial plan. This was followed by a focused discussion on how the State of Tamil Nadu in India emerged as South Asia’s leading manufacturing and knowledge hub.
Session 4: The Policy Lab - Design your own Industrial Policy with AI
In our final session, The Policy Lab, we moved from analysis to action. This was a hands-on workshop where participants became the policymakers. The challenge: to design a cohesive industrial policy for a country's electronics sector.
Using a real-time AI model trained on policy data with Google Gemini Pro, teams were guided by a 10-step practical framework. The cohort collaborated to simulate an industrial strategy for the electronics sector in Spain. The process began with the high-level vision by setting clear policy objectives and ambitious but achievable economic and investment Targets.
From there, teams had to design the core policy levers. They crafted a competitive incentive framework to attract firms and analyzed supply chain and trade imperatives to position the region in the global economy. But a strategy is only as good as its foundation. Participants navigated real-world constraints, developing plans for infrastructure, Ease of Doing Business Reforms, and a forward-looking Workforce Development Strategy to build the necessary talent pipeline. Finally, clear performance metrics to measure success were laid out with a tangible Implementation Roadmap.
So, what did we achieve at the end of four sessions? The answer came from one final poll. We asked the same question from day one: “What’s the first word that comes to mind when you hear ‘industrial policy’?”. Where we once heard “Subsidy,” we now heard “Growth.” The fear of being “Inefficient” was replaced by the goal of “Productivity.” The shadow of “Protectionism” yielded to the necessity of “Collaboration ”, and finally the concern over “Rent-seeking” was reframed as the challenge of building resilient “Supply Chains.”
We didn’t just learn the definition of industrial policy. We learned to speak its future tense!
