Anna S. Garaeva Re(Thinking) Industrial Policy: Green Economy and the Innovation Pause

DOI: 10.38050/2078-3809-2025-17-4-223-246

Abstract

The growing interest in industrial policy in recent years reflects a fundamental shift in the perception of the state’s role in the economy amid technological transformation and intensifying geoeconomic competition. This article offers an interpretation of the underlying causes and consequences of this policy turn. The central hypothesis is that interest in industrial policy tends to intensify during periods of technological uncertainty–when the growth potential of previous paradigms has been exhausted, while new sources of growth have yet to take shape. Particular attention is paid to the notion of an “innovation pause” and the role of the state in launching new waves of technological development. Using the cases of the United States, the European Union, China, Japan, and South Korea, the paper shows that contemporary industrial policy increasingly acquires a “green” dimension, often aligning industrial development objectives with climate agendas. The study applies a historical-comparative method, bibliometric analysis, and case-based strategies. It finds that the resurgence of industrial policy is closely associated with the innovation pause and the institutional need to support nascent industries. The article concludes that industrial policy is no longer an exception but is being redefined as a legitimate and strategic tool of state intervention in economic development.

Keywords: industrial policy, technological transition, industrial nurseries, innovation pause, structural transformation.

JEL: L52, O25, O38, Q55.

For citation: Garaeva, A.S. (2025) Re(Thinking) Industrial Policy: Green Economy and the Innovation Pause. Scientific Research of Faculty of Economics. Electronic Journal, vol. 17, no. 4, pp. 223-246. DOI: 10.38050/2078-3809-2025-17-4-223-246.

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