Wednesday April 26, 2023

Industrial Policy: Lessons for Canada from Around the World

The net-zero challenge is no longer just about emissions. The U.S.’s Inflation Reduction Act and the EU’s Green Deal Industrial Plan have made it clear that international net-zero ambitions are also a question of competitiveness. While Budget 2023 made substantial moves in the right direction, there’s more work to be done for Canada to develop and implement a strategic industrial policy of its own to move the needle on leveraging investment, creating good jobs, and building net-zero supply chains.

But what does modern industrial policy look like? And how can we use it to reduce emissions and compete in a low-carbon world? This conversation with leading international experts looks to examples from around the globe to find the common principles and lessons-learned that make for successful net-zero industrial policy.

Webinar Summary

Like many parts of getting to a net-zero economy, Canada’s industrial policy — strategic government actions to build and shape the industry — will require more deliberate attention, including efforts to rebuild government capacity. Experts from Europe and Canada came together to discuss best industrial practices for developing an emission-free economy, Canada’s unique advantages in the coming transition, and the policy and governance tools needed to reach our economic and climate goals. This also provided an opportunity to announce the launch of the Centre for Net-Zero Industrial Policy.

  • Bridging policy and governance: Moving Canada’s economy into a just, sustainable, and prosperous future will require a dynamic structural transformation. Policy instruments like R&D investments, tax credit for green sectors, and public procurement will need to be paired with better governance structures and deliberate capacity-building in public sector organizations.
  • Good industrial policy means bringing business and other stakeholders together: The familiar adage that the government shouldn’t pick winners and losers “is not what modern industrial policy is about,” said Dr. Altenburg. Broad transformations in agriculture, housing, urban planning have always relied on policy-driven changes that have never been exclusively delivered by market forces, he added, as these cannot solve all the coordination challenges, resulting in uncertainty for investors.
  • Coordination is key: Even if we had a carbon price reflecting the true cost of climate change, it wouldn’t change the need for coordination between government and the private sector, said Dr. Altenburg. Whether increasing charging infrastructure to keep up with EVs, deploying hydrogen to replace fossil fuels or ramping up low-carbon steel production, governments must help coordinate investments and catalyze solutions to chicken-and-egg problems in new supply chains and the supporting infrastructure.
  • Look to global best practices in effective industrial policy: Experts drew parallels between Canada and Norway, two countries with similarly resource-driven, but less diverse economies than some of their larger neighbours (such as the U.S. or Sweden). Similar to how Norway has historically used hydropower to create a decentralized regional strategy, Canada can also use its power sector as a structural enabler for regional approaches to supporting the net-zero transition and economic development.
  • Clarity of purpose and vision is essential, but so is flexibility and preparing for the unexpected.: “There has to be a very clear target and a clear goal, and everybody has to be on the same page” in terms of getting there, emphasized moderator Dr. Bentley Allen, adding that “[The solutions] might not be where you want them to be.”
  • Building the workforce of the future: It’s not just about compensating or retraining workers, shared Dr. Mikheeva, emphasizing the need for lifelong learning and labour mobility between different professions to deliver on green industrial goals with a public purpose. Germany’s dual vocational training system, where skill development is driven by the private sector, was highlighted as a way the country is connecting workforce training with industrial sector needs.


Bentley Allan, PhD

Transition Pathway Principal

Bentley Allan, PhD, is a Transition Pathway Principal at the Transition Accelerator, as well as an Associate Professor of Political Science at Johns Hopkins University. Dr. Allan is an award-winning scholar who has written on the dynamics of international order, science and politics, climate policy, and the political economy of decarbonization. He provides regular advice to government and industry on geopolitics, industrial strategy, and policy.

He has co-lead the development of three sector strategies and roadmaps in collaboration with industry partners. He is the co-coordinator of the Centre for Net-Zero Industrial Policy which advances research and action to strengthen and mobilize Canada’s expertise in modern industrial policy, enabling strategic collaboration between government, industry, indigenous communities, labor, and financial institutions in pursuit of good jobs and a competitive economy.



Dr. Tilman Altenburg

Head of Research Programme, German Institute of Development and Sustainability (IDOS)

Dr. Tilman Altenburg is Head of the Department “Transformation of Economic and Social Systems” at the German Institute of Development and Sustainability (IDOS), Germany’s think tank for development policy. Before joining IDOS in 1995, Mr. Altenburg was a research fellow at Universities in Berlin and Marburg. He received his doctorate in Economic Geography from the University of Hamburg in 1991. Since 1986 Mr. Altenburg has conducted empirical research and published books and journal articles on issues of competitiveness, industrial and innovation policy, SME promotion and value chain development. He serves as a frequent adviser to the German government and international development agencies.


Dr. Olga Mikheeva

Honorary Research Fellow, Institute for Innovation and Public Purpose (IIPP) at University College London (UCL)

Olga is an Honorary Senior Research Fellow at the Institute for Innovation and Public Purpose (IIPP) at University College London (UCL), holding a PhD in Public Administration and Technology Governance from TalTech, which focused on developmental states, development banks and financial bureaucracy. She has also coordinated the Research Area on Monetary Economics, Finance and Financial Institution at the European Association of Evolutionary Political Economy (EAEPE), served as a member-elect of the EAEPE Council, acted as the coordinator of the Economics of Innovation Working Group at the Institute for New Economic Thinking (INET) Young Scholars Initiative (YSI), and worked in policy evaluation and advisory field as a senior expert in Technopolis Group. Olga is also a trustee in the Foundation for European Economic Development (FEED) and a member of the London Political Economy Network (LPEN).



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