Author(s): Corvex Lian
Industrial policy and innovation systems play a pivotal role in shaping economic growth and structural transformation in developing economies. This article examines how governments design and implement industrial policies to foster innovation, enhance productivity, and promote sustainable development. It explores the interaction between institutional frameworks, technological capabilities, and market dynamics in building effective national innovation systems. The study highlights the importance of public–private collaboration, knowledge transfer, and capacity building in strengthening innovation ecosystems. Furthermore, it discusses the challenges faced by developing economies, including limited resources, institutional weaknesses, and global competition. The findings suggest that well-coordinated industrial policies integrated with robust innovation systems can accelerate economic diversification, improve competitiveness, and support long-term development.