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.
But missions cannot succeed without the right public sector capacities. Too often, governments are tasked with delivering transformative strategies without the skills, structures, or resources to do so. Fragmented agencies, rigid procurement rules, and short-term funding cycles undermine the state’s ability to experiment, learn, and adapt. What is needed is investment in the dynamic capabilities of the public sector: the ability to anticipate and shape technological change, to coordinate across levels of government, to partner effectively with citizens and trade unions, and to govern ambitious programmes over the long term. Without such capacities, missions risk becoming declarations without delivery.
The debate on industrial policy in Europe increasingly emphasises strategic autonomy. This is understandable in a world where dependencies in energy, raw materials, and digital technologies have been weaponised. Yet autonomy should not be mistaken for isolationism. The question is not whether Europe can decouple from the world, but whether it can shape globalisation around values of sustainability, equity, and democracy. That means building resilient domestic capacities while forging fair partnerships with the Global South, and ensuring that industrial policy serves people and planet rather than narrow corporate interests.
As this volume shows, Europe now faces a crossroads. One path is a narrow, defensive industrial policy centred on competitiveness and security, with the risk of entrenching incumbents and exacerbating inequalities. The other is a progressive industrial policy, mission-oriented and inclusive, designed to accelerate the green and digital transitions while spreading their benefits fairly.
Three priorities stand out:
First, Europe must double down on missions. Ambitious, measurable goals provide the compass for industrial policy. They galvanise innovation and direct investment towards solving our biggest challenges, rather than scattering resources or reacting piecemeal to crises.
Second, Europe must strengthen its public sector capabilities. Missions cannot be outsourced. They require public institutions that are empowered, skilled, and confident in their role as co-creators of markets. This means changing how we design and fund agencies, how we govern procurement, and how we evaluate success—not by cost savings alone, but by the public value created.
Third, finance must be aligned with purpose. Europe’s fiscal and monetary frameworks should enable long-term, mission-oriented investment rather than constrain it. Institutions like the European Investment Bank and the European Central Bank must be mobilised to support patient capital, crowd in private finance, and ensure that funding flows where it matters most.
The renaissance of industrial policy is an opportunity for the EU to lead—not by copying the US or China, but by forging a model that is distinctly European: democratic, sustainable, and inclusive. This requires courage to set direction, capacity to deliver, and commitment to ensuring that industrial policy works for all.
The contributors to this book rightly remind us that industrial policy is not an end in itself. It is a tool for shaping our economies towards outcomes that matter for society. Europe must resist the temptation to reduce industrial policy to a competitiveness race or a security shield. Instead, it should seize this moment to embrace a mission-oriented approach, underpinned by capable public institutions and guided by the values of justice and sustainability.
If Europe can do this, it will show the world that markets are not forces of nature to be obeyed, but human institutions to be designed—for resilience, prosperity, and shared progress. This is the true promise of a progressive industrial policy: not only to confront today’s crises, but to shape a better future.