Knowra Industrial policy Industrial policy Industrial policy is government action intended to shape the structure, capabilities, or competitiveness of an economy’s industries. It uses tools such as subsidies, procurement, regulation, and public investment.
Industrial subsidy : A government financial benefit that lowers costs or raises returns for selected firms, sectors, or activities. Subsidies make targeted production or investment more attractive to firms.
Alexander Hamilton : The first U.S. secretary of the treasury, who advocated policies to promote domestic manufacturing. Hamilton's 1791 Report on Manufactures argued for public support of American industry.
CHIPS and Science Act : A 2022 U.S. law funding semiconductor research and manufacturing and supporting broader scientific research. It uses grants, tax incentives, and research funding to expand domestic semiconductor capacity.
Laissez-faire : An economic doctrine favoring minimal government intervention in markets. It contrasts with industrial policy's deliberate effort to influence industrial structure.
Public procurement : The purchase of goods, services, or works by public authorities. Government purchasing can create dependable demand for domestic suppliers and new technologies.
Friedrich List : A nineteenth-century German economist who argued that developing nations needed to protect and build productive capabilities. List gave a systematic case for temporary protection of industries still learning to compete.
European Chips Act : A European Union regulation and policy package intended to strengthen Europe's semiconductor ecosystem. It seeks to increase chip production capacity and reduce supply-chain vulnerabilities.
Neoliberalism : A political-economic approach emphasizing markets, private enterprise, and limited state ownership or direction. Its market-oriented policy prescriptions often oppose sector-targeted state intervention.
Tariff : A tax imposed on imported or exported goods, usually collected at a border. Import tariffs can shield selected industries from foreign competition.
Infant industry argument : The claim that temporary protection can help young industries gain capabilities before facing full foreign competition. This argument has long supplied a central rationale for industrial policy.
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