Industrial policy has returned to the forefront of policymaking across OECD countries, driven by mounting challenges: slowing productivity growth, weakening competition, supply chain vulnerabilities, and the imperative to accelerate clean and digital transitions. While concerns about rent-seeking, market distortion, and the protection of incumbent firms remain valid, the perceived costs of inaction have risen considerably.
This Handbook provides practical guidance for policymakers on designing industrial strategies and implementing policies. Drawing on OECD analysis and illustrative examples from member countries, it addresses not whether to pursue industrial policy, but how to do so more effectively while preserving open markets, maintaining competitive conditions, and advancing economic security. Importantly, industrial policy does not only comprise vertical sectoral interventions but also horizontal, framework conditions (such as well-functioning capital markets, labour mobility).
The Handbook is organised into two complementary parts. Part I outlines a four-phase framework for designing industrial strategies: strategic orientation, coordination, effective delivery, and evaluation. Part II examines the selection and design of specific policy instruments (for instance, grants, tax incentives or public R&D) across five implementation phases: rationale, scope, shape, selection, and evaluation.