South Korea bets on industrial policy again

Around the world, governments are again using the tools of industrial policy — subsidies, tax incentives, public finance, trade measures and strategic regulation — to shape their economies. South Korea is no exception. President Lee Jae Myung’s government has launched an ambitious strategy to promote semiconductors, AI infrastructure, robotics and other frontier industries, with the goal of bolstering future growth and competitiveness. But the path ahead is littered with obstacles. The return of industrial policy is not simply a policy trend. Markets often underinvest in new technologies, because of coordination failures, learning externalities and economies of scale. But at a…