The New Industrial Structure: Reforming Industrial Policy in the Digital Era

The industrial structure is rapidly changing in the digital era. Accordingly, extant industrial policies that were once justified under the previous industrial structure could have a different effect than before if changes in the industrial structure are ignored. Therefore, industrial policies should also change as the industrial structure changes. This paper discusses the changes in the industrial structure resulting from digitalization and the problems that may arise when applying existing industrial policies to new industries and the direction of industrial policy changes. Industrial policy refers to various policies the government implements that target industries to grow the economy and support or revitalize industry. This report discusses desirable changes in policy direction related to the promotion of competition, mainly in industrial policy. Competition policy may be considered different from industrial policy, but the broadest definition of industrial policy includes competition policy. In addition, since the purpose of competition policy is to maximize market efficiency and consumer satisfaction by promoting competition in the market, these two policies are not incompatible. Recently, the importance of harmonizing both policies has been discussed. Therefore, this report explains how competition policy, which is part of industrial policy, should adapt to structural changes in the digital era.