Industrial policy has re-emerged as a central tool for policymakers and is increasingly justified in terms of national security. Beneath this securitised framing lies a more specific logic: state-led engineering of physical chokepoints.
Firms respond differently to geopolitical pressures: Chinese firms align with state priorities, US firms adapt to policy incentives, and Indonesian firms pursue upgrading.
Public debate on economic coercion still looks at ports and sanctions lists. The leverage sits several supply-chain tiers below, in opaque and irreplaceable suppliers.
While critical minerals are geographically dispersed, the capabilities required to process and refine them remain highly concentrated in a small number of industrial ecosystems.
The era of the “retreating state” is over. Firms are increasingly judged not only by market performance, but by their strategic alignment with national security priorities.
