Industrial Policy 2025: Bringing the State Back In (Again)
New York, NY — In recent years, the US government has used emergency powers from the era of Franklin D. Roosevelt to tackle everything from manufacturing vaccines to addressing the baby formula shortage. The United States has also deployed tax credits, loans, and grants on a scale not seen in generations. After decades of policymakers attempting to minimize the actual or perceived role of the state in the economy, the state’s capacity is again at the center of the current US policy agenda.
Industrial Policy 2025: Bringing the State Back In (Again), a series of six essays released today from the Roosevelt Institute, explores the potential tools of state economic capacity that could complement the tax credits and grants that have formed the core of the Biden administration’s first-term industrial agenda. The ideas in this collection have two things in common. First, the cases described in each essay involve a more active role for the state in the economy than neoliberal scholars or policymakers in the US have embraced in recent decades. Second, these tools have been successfully employed in world economies.
Unified by a foreword from Todd N. Tucker, director of the Roosevelt Institute’s Industrial Policy and Trade program, the essay collection includes a diverse group of scholars from around the world who aim to answer the question: What institutions and strategies are missing from US industrial policy that could increase its success?
- Kyunghoon Kim’s essay, “The Role of State Ownership: Overview of State-Owned Entities in the Global Economy,” demonstrates that state-owned entities are widespread in various sectors in both advanced and developing countries, including some of the United States’ main trading partners.
- Saule Omarova’s essay, “Finance as a Tool of Industrial Policy: A Taxonomy of Institutional Options,” shows how national development banks fill gaps in financial and production markets to make industrial policy projects go faster and smarter, and includes a case study of the Reconstruction Finance Corporation, which financed the New Deal and World War II mobilization under FDR’s administration.
- Jonas Algers’s essay, “Leading With Industrial Policy: Lessons for Decarbonization from Swedish Green Steel,” looks at how a variety of state institutions are remaking and decarbonizing the steel industry in Sweden, including by stimulating competition and protecting against single-firm monopolies.
- Andrea Furnaro’s essay, “Just Energy Transition in the Time of Place-Based Industrial Policy: Patch or Pathway to the Green Industrial Transformation?” explores the wind-down of coal production in Germany, showcasing a valuable study of how regional and supranational planning can help phase out industries while keeping workforces whole.
- César Rosado Marzán’s essay, “Fair Transition Funds, Employer Neutrality, and Card Checks: How Industrial Policy Could Relaunch Labor Unions in the United States,” draws lessons from Sweden and Puerto Rico for how contemporary US industrial policy could help sustain new worker organizing and build power from the bottom up.
- Lenore Palladino’s essay,“Electric Vehicles: How Corporate Guardrails Can Improve Industrial Policy Outcomes,” explores the bailout of Detroit automakers in the global financial crisis of 2008–2010 to show how public dollars can be used to structure and incentivize better corporate decision-making.
“There is a critical window in 2024 to make the case for a more robust industrial policy toolkit in the next Congress and administration,” said Tucker. “Now is the time for experts like these to inform the public debate by sharing what their fields already know (but busy policymakers might not) about the opportunities of a more diversified industrial policy toolkit.”