Executive Summary
This editorial introduces a framework integrating industrial policy and global value chains (GVCs) to address recent disruptions. It identifies four strategic orientations for advanced and emerging economies based on economic development and geopolitical context. The framework explains how industrial policies are shifting from prosperity-driven to security-driven agendas, impacting GVC configurations.
Why It Matters
This document is crucial for defense and geopolitical analysts as it outlines how global disruptions are fundamentally reshaping national industrial policies towards security-driven agendas, directly impacting strategic supply chains and international economic competition. Understanding these shifts is vital for assessing national vulnerabilities, strategic dependencies, and the evolving landscape of economic warfare and alliances.
Key Takeaways
- Industrial policy is shifting from a prosperity-driven to a security-driven agenda, prioritizing strategic supply chain resilience over pure economic growth.
- The framework identifies four strategic orientations for industrial policy based on economic development level and geopolitical context (integration vs. fragmentation).
- Geopolitical fragmentation leads advanced economies to prioritize domestic resilience and emerging economies to strengthen supplier resilience through hybrid approaches.
- The US-China rivalry and regional conflicts are key drivers of this shift towards security-focused industrial policies.
- The GVC framework is essential for understanding multidimensional resilience at firm, supply chain, and national levels.
Strategic Relevance
The paper provides a critical framework for understanding the strategic reorientation of industrial policies globally, driven by geopolitical tensions and supply chain vulnerabilities. It highlights how nations are leveraging economic tools to enhance national security, reduce dependencies, and compete in a fragmented world, directly impacting defense industrial bases and strategic alliances.