Free E-Book: Industrial Policy In The European Union - Towards A Progressive Agenda

Dear reader,

We are pleased to announce the publication of a new ebook together with our partners from the Austrian Foundation for Development Research (ÖFSE).

https://ebooks.socialeurope.eu/9/industrial-policy-in-the-european-union

Preface

By Mariana Mazzucato

Industrial policy has returned to the European Union’s agenda with remarkable force. For decades, economic governance in Europe was dominated by the belief that the role of the state was simply to fix market failures while leaving the direction of growth to market forces. Today, that view is no longer tenable. The climate emergency, the digital revolution, geo-economic rivalries, and the war in Ukraine have made clear that markets do not automatically produce socially desirable outcomes. They must be shaped—by design, with purpose, and through capable public institutions.

This is the essence of the entrepreneurial state: not a passive fixer of problems, but an active shaper and co-creator of markets. From the internet to renewable energy, history shows that transformative innovations did not emerge spontaneously from the private sector alone. They were catalysed by bold public investments, risk-taking, and coordination across different sectors. Recognising this role does not diminish the importance of business or civil society; it elevates the need for genuine partnerships in which the public sector sets direction and crowds in innovation.

The EU has already taken steps in this direction. The European Green Deal, the Green Deal Industrial Plan, and the missions framework in Horizon Europe all signal an ambition to use industrial policy as a tool for transformation. But these ambitions risk being diluted if they are reduced to competitiveness slogans or captured by vested interests. As the Draghi Report on European competitiveness starkly underlines, Europe has fallen behind the US and China in critical technologies. Yet the response cannot be a race to the bottom in subsidies or deregulation. Industrial policy must be rooted in a distinctly European vision of public value: innovation that advances sustainability, inclusion, and resilience, not just short-term profits.

This is why missions matter. Missions are not abstract aspirations; they are practical instruments for transforming our economies. A mission like achieving 100 carbon-neutral cities by 2030 forces us to think across silos, mobilising innovation in energy, transport, housing, and digital infrastructures. It also requires mobilising finance, regulation, and citizen engagement in ways that open new pathways for inclusive, sustainable growth. Missions orient both public and private investment around a shared purpose, ensuring that resources are directed where they can have the greatest systemic impact.

snip