Industrial policy is back at the centre stage of policy debate, while the world is undergoing dramatic transformations. This article contributes to the debate by developing a new theory of industrial policy, incorporating some issues that have been neglected so far and taking into account the recent changes in economic reality. The authors explore how the incorporation of some of the neglected issues — commitments under uncertainty, learning in production, macroeconomic management (especially demand management), and conflict management — changes the theory. They then examine how the theory of industrial policy should be modified in light of recent changes in economic reality: the rise of the global value chain, financialization and new imperialism. This contribution aims at promoting a pragmatic approach to industrial policy and pointing to new areas for policy intervention in a changing world.

Industrial policy is back in the mainstream debates. The paper provides a long-term analytical perspective of the industrial policy debate, and it critically assesses the current mainstream phase of the debate in light of three fundamental theoretical insights that developed along several decades of industrial policy theory and practice. These are related to the (i) structural interdependencies, tensions and dualism arising in the industrialisation process; (ii) variety and types of institutions for industrialisation and the importance of policy alignment; (iii) conflict management role of the government, alongside his entrepreneurial function, and the importance of government organisational capabilities. Building on this theoretical analysis, the last section of the paper provides a framework for the strategic coordination of packages of interactive industrial policy measures. The Policy Package Matrix is introduced as an operationalisation of the framework and a tool for effective industrial policy making.

Production and learning of productive knowledge are profoundly intertwined processes as the activation of either process triggers the other, very often implying interdependent transformations. The paper aims to open the 'production black box' by proposing the analytical map of production as a tool for disentangling the set of interdependent relationships among capabilities, tasks and materials. The concept of structural learning is introduced to identify the continuous process of structural adjustment triggered and oriented by existing productive structures at each point in time. Structural learning trajectories allow for the transformation of structural constraints such as bottlenecks and technical imbalances into structural opportunities. Complementarities, similarities and indivisibilities are essential focusing devices for activating compulsive sequences of technological change as well as discovering structurally embedded opportunities. The paper then investigates the tension between structure and agency present in structural learning trajectories, and examines the form it takes in different productive organisations.

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The paper aims at reconstructing the industrial policy debate by focusing on a number of theoretical issues, in particular the contested nature of industrial policy -its selectivity -also in relation to manufacturing and the different rationales for industrial policy making. The paper concludes by looking ahead into the future of manufacturing and focuses on the need for rethinking our understanding of global production and emerging technologies for increased prosperity.

This paper explores the recent evolution of manufacturing-related policies in leading OECD economies-Germany, Japan, the United Kingdom, and the United States. A novel framework, the industrial policy matrix, is introduced and then used to illustrate and compare policy approaches in terms of factor inputs, intervention levels, and degrees of coordination. While approaches adopted in different countries vary, reflecting their respective contexts, there is some evidence of a convergence on the effectiveness of particular programmes and organizations as well as on the characteristics that support the competitiveness of national manufacturing systems, including coordination and alignment of related policies, partnerships with industry, and longer-term investment and planning.

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The transformation of production structures has been at the centre of the historical dynamics of capitalist economies since the first Industrial Revolution. The article concentrates on production processes as principal loci of structural economic dynamics along increasing and decreasing returns trajectories. These trajectories are triggered by structural opportunities and constraints embedded in production systems, and their historical realisation is subject to different institutional configurations-production units at different levels of aggregation. The approach envisioned suggests the possibility of governing economic dynamics by structural policies working on the technological and organisational conditions of production as well as on the configuration of production processes within production units. Capitalist economies have to rely on a mix of coordination devices across different production units and aggregation levels for capturing structural opportunities and avoiding structural constraints.