Across the OECD, governments are pursuing ambitious industrial strategies to build greener, more competitive and resilient economies. But too often, the spotlight is on policy instruments such as grants, tax credits and public procurement, while the governance systems needed to deliver those instruments are overlooked.
Modern industrial strategies are complex. They juggle competing objectives, multiple ministries and diverse stakeholders. Without strong governance, this complexity leads to fragmentation, contradiction, and ultimately policy failure.
To close this gap, the OECD's institutional framework for industrial strategies offers policymakers a practical tool to assess their industrial strategies across four stages: strategy, co-ordination, implementation, and evaluation.
Here is a 12-step checklist for clear and effective industrial policy governance.
1. Build a comprehensive, evidence-based diagnosis
Use data, expert input, and international benchmarks to establish a precise empirical picture of the economy. Identify market failures where government action can make a real difference. This is the foundation for any effective industrial strategy.
2. Create broad consensus beyond government
Success requires more than data. Engage policymakers, businesses and the public to build broad buy-in. Use online consultations, large in-person events, traditional questionnaires, and smaller roundtables to shape a shared vision for your strategy.
3. Formalise your strategy with clear and measurable objectives
A written strategy builds legitimacy and guides action. Summarise your vision, spell out policy alignment, set measurable goals – and make the document public. An online tracker showing progress can boost transparency and accountability.
4. Design policy instruments with strategic alignment
Use international benchmarks such as the OECD’s Quantifying International Strategies project (QuiS) and STIP Compass to explore examples of industrial, technology and innovation policies and inform your policy mix. Apply a portfolio approach to cover all relevant areas, avoid gaps or redundancies, and ensure instruments align with your strategy’s goals.
5. Establish formal co-ordination mechanisms between ministries
Industrial policy cuts across ministries. Regular inter-ministerial meetings and a high-level lead for industrial policy can help resolve conflicts and maintain alignment across workstreams. Technical-level arbitration processes can expedite routine decisions.
6. Define clear roles across institutions and levels of government
In Europe, align national strategies with EU goals and funding cycles. Domestically, ensure clear responsibilities between ministries, regions, and implementing agencies to prevent confusion and duplication.
7. Assign ownership and accountability for each instrument
Delivery works best when one entity has clear responsibility for each policy instrument. Give implementing agencies autonomy for day-to-day decisions, within legal and budget limits, to ensure efficient rollout.
8. Secure stable, multi-year budget commitments
Avoid spreading resources too thinly. Multi-year financial commitments provide certainty for both implementing agencies and beneficiaries, improving the credibility and impact of your strategy.
9. Build skilled, multi-disciplinary implementation teams
Delivering industrial policy requires diverse expertise: understanding business needs, mastering technological developments, and navigating legal frameworks. Invest in recruitment, training, and capacity building.
10. Embed independent evaluation in your strategy
Credible evaluation depends on independence from those designing and delivering policies. Use internal or external teams with clear separation to assess what works and what doesn't.
11. Collect data to support rigorous and timely evaluation
Data collection should start from day one of the policy cycle. Track beneficiaries and applicants, integrate this information with administrative data, and ensure statistical agencies can support robust analysis.
12. Use evaluation results to drive action
Publish evaluation and ensure they reach decision-makers. Use findings to trigger a dialogue that leads to the revision and improvement of instruments, while maintaining flexibility and agility in a context of increasing uncertainty.
Conclusion
Governance is the foundation for effective industrial strategy, but it’s often overlooked. This 12-step checklist provides a simple yet systematic way to assess and strengthen your industrial policy governance. Rather than a pass-fail exercise, treat it as a diagnostic tool for identifying institutional gaps and priorities for improvement.
You can delve deeper into the topic through our latest research that provides an institutional framework for industrial policies, with concrete examples from Austria, Estonia, Ireland, Slovenia and the United Kingdom, or read our blog post on how tax data unlocks new insights for industrial policy.
