Excerpt
The global resurgence of industrial policy marks a pivotal shift in economic statecraft. From the CHIPS Act to Made in China 2025, governments are actively shaping markets to achieve strategic economic and social goals. While this trend is global, its implications are most profound for emerging economies striving for structural transformation. This paper reconceptualizes modern industrial policy not as a set of optimal interventions, but as the navigation of ten fundamental “predicaments”, inherent tensions without clear resolutions, and that vary by country context and capability. These predicaments require policymakers to simultaneously manage the fraught political economy of subsidies, navigate exposure to volatile global supply chains, and reconcile the promise of frontier technologies with the imperative of broad-based, good quality employment.