Industrial Policy Needs Plasticity, Not Perfection

For decades, industrial policy has focused on one central question: what industries should country build? That question remains important. But in a world shaped by geopolitical fragmentation, trade wars, supply chain disruptions, technological rivalry, and recurring shocks, it is no longer sufficient. The real challenge is no longer simply building competitive industries. It is ensuring that they remain competitive when technologies, markets and geopolitical conditions change. In this article, published on the Eurasia Review, the concept of Trade Systems Plasticity is extended to industrial policy. The central argument is that competitiveness no longer depends only on what economies produce. It increasingly depends on whether the trade systems surrounding productive capabilities (institutions, logistics, regulations, digital connectivity, and commercial relationships) ccan continuously adapt to sustain efficient production and respond to changing economic and geopolitical conditions. Industrial policy builds productive capabilities, but Trade Systems Plasticity explains how to preserve their competitiveness under conditions of persistent uncertainty. Perhaps the defining competitive advantage of the twenty-first century will not belong to the economies that are most optimized, but to those whose trade systems are designed to dinamically adapt to continuous change.