Introduction to A Modern Guide to Industrial Economics

Industrial economics has long provided essential tools for understanding how firms compete, how markets function and how innovation drives economic performance. However, the world in which these tools were developed has changed dramatically. The COVID-19 pandemic exacerbated the fragility of global value chains. Geopolitical tensions have transformed semiconductors, energy and critical technologies into strategic assets. Climate change is forcing governments and firms to rethink production systems, while digital technologies continue to reshape industries. These developments raise broader questions than those traditionally addressed by industrial economics. Understanding industrial transformation today is no longer simply a matter of analysing firms, markets and competition. It also requires understanding how governments shape technological trajectories, coordinate industrial ecosystems, support strategic sectors and respond to systemic challenges. In this context, a fundamental question emerges:What can Industrial Economics learn from Industrial Policy? The Modern Guide to Industrial Economics is built around this question. Instead of treating industrial economics and industrial policy as separate domains, the volume explores their increasingly intertwined relationship. It examines how firms, markets, institutions and policy interventions influence economic activities across countries, sectors and technological systems.