Place-based industrial policy: Lessons for place transformation

As governments renew their focus on industrial policy to enhance strategic sectors, this paper argues that such efforts offer a critical opportunity to address widening subnational inequalities. Place-based industrial policy (PBIP) can serve a dual purpose: supporting national competitiveness while driving the transformation of left-behind places. By aligning national sectoral priorities with local capabilities, PBIP mobilises underused assets across regions to create new sources of economic dynamism. The paper provides a first analytical framework to implement PBIP effectively, drawing on international practices and cross-disciplinary research. It sets out key economic, institutional and political considerations for tailoring interventions to diverse places, explains the importance of coordinated action across levels of government, and outlines different routes for linking industrial goals with regional renewal. It maps the foundational questions and trade-offs to inform better policy design – and outlines a research agenda for closing knowledge gaps in how PBIP can unlock inclusive competitiveness and long-term transformation. It is part of the broader Transforming Places project.