Tag Archives: industrial policy

World Bank Sorry for Mistakes of 30 Years

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World Bank on March 17, 2026 confessed to an error of more than three decades duration, moving to embrace industrial policy as tariffs, subsidies and a variety of other interventions become increasingly popular with governments in search of growth. Back in 1993, the bank published an assessment of the rapid economic growth achieved by some economies in east Asia, and which appeared to owe something to government interventions in support of selected industries. The bank controversially concluded that their economic success had nothing to do with those interventions, which it instead described as a “costly failure.” As World Bank Chief Economist Indermit Gill wrote in a new report, that conclusion helped “stigmatize” industrial policy just as a leap forward in transport and communications technologies spurred a period of intense globalization. Instead, governments were encouraged to let markets operate without direction or barriers to trade, while keeping inflation low and budget deficits narrow and backing investment in education and vital infrastructure. “That advice has not aged well—it has the practical value of a floppy disk today,” wrote Gill.

Taking a fresh look at the evidence, the new report concludes that the South Korean government’s “big push” during the 1970s in support of heavy industry and chemicals has resulted in the economy being 3% larger each year. In other words, it was very much not a failure, nor was it particularly costly.

Despite the stigma, many economies never entirely lost faith in industrial policy. Indeed, China resorted to a wide variety of interventions during its period of record growth. In emulation, many rich economies—including the U.S.—have begun to implement industrial policies. “Industrial policy—the range of policy tools that governments use to shape what an economy produces rather than leave it to the discretion of markets alone—is back with a vengeance,” the bank said.

Excerpt from Paul Hannon, World Bank Embraces Industrial Policy, Abandoning Three Decades of Stigma, WSJ, May 17, 2026

Which Tech Companies Work for the Military? All

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Companies including Nokia, Dell, and Oracle are eager to apply decades of experience in civilian technology to the rapidly evolving battlefield. Drones, bodycams and digital sensors now stream real-time intelligence in volumes no human can digest. Military headquarters are crunching through that using artificial intelligence and pumping back to troops situational updates, tactical guidance and battle plans, constantly updated on computer screens and hand-held devices.  “We understand that the future weapon is data,” said Giorgi Tskhakaia, an adviser to Ukraine’s minister of digital transformation 

The first step is connectivity….Nokia is packaging 5G technology for ultra-secure use on battlefields and in national-security applications. It has developed backpacks with small 5G nodes and vehicle-based systems that can handle up to 1,000 users for a sort of tactical communications bubble. In 2025, it announced partnerships with military-equipment giants Lockheed Martin and Rheinmetall to integrate 5G communications into their systems.

Ericsson, the West’s only other maker of 5G networks and a producer of military radios going back to World War II, is also pushing into digital defense applications.

NATO is now working to adopt 5G as a military-communications standard across its 32 members. Alliance experts say the volume of military data is so great that 5G is best for transmission because the standard has at least 10 times the data capacity of earlier systems. It is also much more resilient against jamming

The second step is the extraction of data….Ukraine has spent three years developing AI systems to churn through all it collects… The Pentagon in 2017 launched a significant effort to adopt AI, Project Maven, tapping machine learning to digest mountains of data. Google’s role in the work sparked employee protests at the time…

Oracle, like many of its rivals, is no stranger to working with governments and militaries. The company began in 1977 out of a Central Intelligence Agency program—Project Oracle. But for decades it focused on corporate customers. Now, it and other cloud providers including Google, Amazon.com and IBM are applying to government and national-security work many lessons from their fierce commercial competition to move and process data fastest.

The final step in exploiting battlefield data is delivering it to fighters via gear that can handle combat conditions. Screens are proliferating on the battlefield, just as they did in offices and homes several decades ago, but warfare puts demands on equipment unlike any other environment…One Dell laptop is built to Pentagon standards for resistance to shocks, dust, sand, water and “explosive atmosphere,” meaning it won’t ignite flammable vapor. It can handle temperatures between minus 20 degrees and 145 degrees Fahrenheit.

Excerpt from Daniel Michaels, That 1990s Tech Brand? Its New Gig Is in Battlefield Data, WSJ, Sept. 9, 2025

How Boeing Maimed Itself and Killed 346 People

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Spirit AeroSystems is going full circle, from part of Boeing till 2005 to independent supplier in 2005 (when Boeing sold to a private equity firm) and back to part of Boeing in 2024. It is the perfect example of a realization dawning on corporate America: Outsourcing isn’t all it was once cracked up to be. The deal’s logic of vertical reintegration makes sense in light of recent history, with air-travel safety likely benefiting from centralized supervision and a simpler workflow between plants. Yet it is also an indictment of what executives in most industries have been doing for almost three decades….’

At the core of the outsourcing trend that lasted 30 years was the idea that an “asset-light” firm focused on intellectual property and its “core” expertise would be better run. With this mindset, jettisoning aerostructures operations seemed like a no-brainer….
It wasn’t just aerostructures: In the 2000s, Boeing outsourced more than 70% of the 787 Dreamliner program. But the problems with becoming an assembler of planes, as opposed to a true manufacturer, gradually became apparent. The company lost control of supply, resulting in years of delays and cost overruns…

Aerospace isn’t the only industry to revive vertical integration. Intel is beefing up chip manufacturing in the U.S., General Motors is building battery plants and Sweden’s IKEA is acquiring containerships. One general flaw of the asset-light model is that, over time, firms can lose their innovative edge because a lot of “learning by doing” happens when production processes interact. Another is that low-margin bits of the supply chain get worn down to just a few sources. These may not have the financial muscle to make big investments in times of turmoil, or they may be geopolitically sensitive. Such risks were underscored by post-Covid shortages, particularly in the largely “fabless” U.S. microchip industry, which has outsourced chip making to foundries in East Asia in a way that echoes what happened to aerostructures.

Excerpts from Jon Sindreu, Boeing Calls Time on the Great American Outsourcing, July 2, 2024