The term ‘industry policy’ often conjures images of Australia’s interventionist approach prior to the 1980s and 1990s, characterised by higher taxes, tariffs and protectionism for domestic industries.

Since then, the prevailing economic orthodoxy has rejected industry policy, favouring a ‘hands-off’ approach that leaves industry development up to the free market.

As we face major challenges like the green transition, supply chain instability and resilience to future health crises, this hands-off approach will not be sufficient to tackle such tasks, and won’t secure Australia’s competitiveness for decades to come. Capital markets optimise for short return horizons. The long-term prosperity of the country relies not just on exploiting our comparative advantage today, but in setting up Australia to have strong industries in the future.

Governments around the world have taken different approaches in a common attempt to implement more modern, directional industry policy. This report’s integrated framework for modern industry policy provides the how for governments to do this well, and outlines the essential elements for success.