Industrial policy is different at local and national levels

Industrial policy at the national, provincial or sub-national and local levels is different. While at the national level, industrial policy is often focused on coordinating public resources around certain priority areas, local industrial policy is almost completely focused on the pressing issues of the private sector and organizing the public sector around these needs. While at the national level, selecting opportunities for investment is often difficult and focused on the future, at the local level industrial policy might get trapped into grappling with “what is” and the legacy of the past.
At all the levels policy makers will be grappling with balancing “what we have now” with “what is desirable”. All too often “what is possible or within reach with what we have” is not asked enough of public and private actors. These questions are much harder to ask and to answer at the higher levels, because the industries are further away or maybe not even entirely visible, and emerging competencies in public and private actors may still be hidden.
At the local level, business is more visible. Unfortunately, at the local level past relations and power struggles between various actors still shape the current dialogue and possibilities for future collaboration. Therefore, industrial policy implementation at a local level must have a strong process element that attempts to reconfigure stakeholder relations around areas of common potential or concern. In our practical experience we know that at the local level it is easier to mobilize the private sector around problems (such as skills shortages and inadequate infrastructure) than around opportunities. However, it requires a certain confidence and maturity of local government and local public agencies to engage with the private sector when they know that they will be dealing with complaining business people. The one thing both the local private sector and the local agencies of the public sector have in common is limited resources. Perhaps local industrial policy then should focus on making the best of the existing limited resources. The focus should be to find opportunities for collaboration that can be exploited in a process approach, not focused on large projects or a grand vision dominated by the public sector, but on a process of finding small opportunities to make better use of local competencies, local knowledge and local capacity in both the public and the private sector. I am not arguing that local industrial policy must be completely inward looking, as the relation between local firms and external markets are an important resource. However, I am arguing that local industrial policy must start with the current reality while mindful of the past and focused on what is called the adjacent possible. The adjacent possible means opportunities or solutions that are within reach by combining, recombining and maybe adding a little to what we have now.
I conclude by stating that at the local level, industrial policy is not so much about the public sector supporting structural change or achieving a vision of new industries. At a local level, industrial policy needs to be entrepreneurial in that it should focus on exploiting existing resources, knowledge and competencies to the fullest. Local industrial policy must have a process approach that does not get trapped into existing stakeholder and sectoral interests, but that strive to unlock the potential of the different knowledge bases and competencies in the locality to solve existing problems in innovative ways, while searching in an ongoing basis for opportunities for collaboration.