As industrial policy attracts renewed attention in developed countries, including the United States and member countries of the European Union (EU), an “industrial policy race” has emerged worldwide.
One study used machine learning to analyze a database of trade and investment policy measures implemented by countries around the world. According to its findings, the number of policy measures classified as industrial policy was more than 30 times as high in 2022 as in 2010.
The nature of the measures has also changed. Whereas trade and investment restrictions were once common, governments are now making increased use of subsidies and export-related measures such as trade finance.
Moreover, the study showed that high-income countries use industrial policy measures far more extensively than low-income countries.
In Japan, too, the government has been rethinking the role of industrial policy. In 2021, the Industrial Structure Council of the Ministry of Economy, Trade and Industry set forth the New Direction of Economic and Industrial Policies, launching efforts to develop a new vision for industrial policy suited to contemporary challenges. At the Council for Japan’s Growth Strategy, established under the administration of Prime Minister Sanae Takaichi, discussions have focused on key products and technologies in each strategic sector, as well as public-private investment roadmaps.
That being said, industrial policy has not always been viewed positively. In academic circles, there was considerable concern that industrial policy undermined the efficient allocation of resources, leading to significant skepticism regarding its benefits.
However, in recent years, academic interest in industrial policy has grown substantially. A search of an academic database for English-language economics papers containing the term “industrial policy” in their titles or abstracts found 2,327 papers published in 2025 that matched the search criteria—more than 10 times the number published in 2010.
This renewed interest is driven by geopolitical shifts, including technological competition between the United States and China, technological advances such as the rise of artificial intelligence (AI), and the worsening climate crisis. Researchers are increasingly using rigorous empirical methods to evaluate the effects of industrial policy. This series will explain how individual countries are pursuing industrial policy and discuss its evolving characteristics and emerging challenges.
>> Original text in Japanese
* Translated by RIETI.
July 31, 2026 - Published in Nihon Keizai Shimbun's " Introduction to Economics—New Trend in Industrial Policy "
