WIIW The Vienna Institute for International Economic Studies - Wiener Institut für Internationale Wirtschaftsvergleiche

This essay suggests that there is a need for a Catalytic Industrial Policy (CIP) aimed at maximising positive outcomes on three axes at the same time – the green, the digital and the social – in order to speed up their realisation. Respective investments need to be guided in the desired directions, while ensuring that the benefits of CIP are widely shared, for instance through conditionalities. A bold CIP needs permanent monitoring, including through the use of relevant outcome indicators with pre-defined selection criteria. This essay provides a list of criteria and examples of outcome metrics. A key objective of such indicators would be to shed light on interdependencies. Also, it is important to look beyond those indicators that are already widely used at different levels of disaggregation and also beyond typical industrial policy examples. Alternative examples of indicators provided include, for example, trust in the national government, the operational stock of robots, and the area density of high- and low-voltage circuits in the transmission of electricity. A (perhaps unusual) CIP case could thus be a Europe-wide investment programme in high-quality, technologically sophisticated and sustainable (public) housing in support of the digital revolution, CO2 reduction and overcoming the housing crisis, thereby legitimising a tremendous ongoing structural change.