Research into global place-based industrial policy and innovation approaches
Australia’s transition to net zero will bring significant economic and workforce changes, particularly in our industrial regions. Australia is not alone in this transformation. Other countries have adopted, or are adopting, approaches to help workers adapt to and benefit from the transition. These experiences provide valuable lessons for Australia.
This research examines how place-based industrial and innovation policies have been designed and delivered in different parts of the world. It draws on 9 case studies from Asia, Oceania, Europe and North America to highlight the strengths, challenges and lessons from different approaches. Each of the case studies have been selected because they provide key learnings, success factors and challenges that are relevant to the current state of the Australian energy transition.
Innovation policy
Refers to the creation, adaption and application of knowledge and technology to develop or improve products, services, processes or organisational forms that generate value.
Industrial policy
A form of place-based policy focused on scaling production, enhancing competitiveness and supporting economic transformation in specific locations.
Place-based policy
Place-based policies are designed around the strengths, needs and opportunities of specific regions and communities.
Industrial and innovation policy is highly context dependent. Factors such as economic systems, geography, government structure, organisational capability, available resources, population density, infrastructure networks, labour markets and geopolitical positioning all influence how policies are designed and implemented.
Key findings
- Regional competitive advantage is the primary anchor for place-based policy. Place-based industrial and innovation policy is most credible where it builds on existing or emerging regional strengths, such as energy resources, industrial capability, logistics infrastructure, research institutions, workforce depth and anchor demand.
- Governments increasingly shape markets and share risk. Governments are increasingly using a broad set of economic levers to create investable markets and reduce investor risk, including demand signals, procurement, offtake arrangements, concessional finance, grants, regulation and public risk-sharing.
- Coordination is essential. Multi-level governance is a common feature, but coordination across governments, agencies and industry is also a persistent source of delay, complexity and delivery risk.
Infrastructure, skills and investment are most effective when delivered as integrated policy packages. Place-based transitions are more likely to progress where infrastructure investment is aligned with:
- land-use planning
- skills and workforce development
- procurement
- innovation support
- finance
- housing
- community investment.
Investment in housing, transport, skills, energy and public services underpins the foundations for fostering sustainable industrial expansion, particularly in remote or rapidly growing regions.
- Workforce transition requires regionally-specific approaches. Regions repurposing existing industrial bases face different challenges to those building new industries, requiring tailored strategies for retraining, attraction and skills development.
- Government should be prepared to stay involved and sequencing is as important as the interventions themselves. The order in which governments deploy infrastructure, governance, workforce investment and market shaping tools plays a crucial role in shaping whether industrial transitions evolve or stall. The role of government often shifts over time, from setting direction and funding enabling infrastructure, to coordinating delivery, supporting markets, addressing bottlenecks and maintaining confidence through implementation.
- First Nations economic participation is inseparable from place. Economic activity is anchored in land tenure, community governance and regional context. Outcomes are stronger where delivery responsibility sits with Indigenous institutions, supported by government funding and coordination rather than direct state control.
- Delivery capability determines whether policy ambition translates into outcomes. The difference between policy ambition and regional outcomes is shaped by delivery capacity. Clear mandates, capable lead institutions, durable governance arrangements and actors with authority to coordinate across portfolios, jurisdictions, industry and regions result in more effective place-based industrial and innovation policy delivery.
Characteristics of case study regions
The 9 case studies were selected using a set of key criteria, including global coverage, relevance to the Australian context, a diverse range of place-based approaches and policy settings, and a variation across industrial and innovation focus.
| Case Study | Place-based approach | Overview |
|---|---|---|
| United Kingdom: Barrow-in Furness | Mission-oriented innovation / market creation industrial policy | Defence-shipbuilding strategy with strong central coordination, long-term government procurement and investment in local enabling infrastructure. |
| Japan: Ministry of Economy, Trade and Industry (METI) – Hokkaido Prefecture | Agency-based approach to place-based industrial strategy | Central economic agency aligns regional investment, R&D funding and market-shaping tools for strategic industries and regional transition. |
| South Korea: Tripartite System Space Industry Cluster | Cluster-based industrial policy | Multi-region space strategy assigning specialised roles across manufacturing, R&D and launch, coordinated nationally with variable regional alignment |
| United Kingdom: Innovate UK Catapult Centres (Energy, Offshore, High Value Manufacturing) | Mission-oriented innovation ecosystems policy | Network of translational institutions sharing R&D, testing and demonstration infrastructure to bridge research and commercialisation |
| Sweden: Industriklivet–Green Steel Industrial Policy | Mission-oriented innovation / market creation industrial policy | Green transition using low-cost renewable energy and public co-funding to de-risk pilots and scale low-carbon steel in northern Sweden. |
| Germany: Ruhr Green Transition | Green / just transition industrial policy | Long-term restructuring of a legacy industrial region through sustained federal involvement, workforce transition and supply-chain reconfiguration. |
| Canada: Place-based industrial policy across dispersed regions | Cluster-based industrial policy / agency-based approach | Federally coordinated links between specialised regions through funding, tax incentives and infrastructure to mobilise private capital across a dispersed economy. |
| New Zealand: The Māori Economy | N/A – selected First Nations specific case study | Treaty-grounded First Nations economic architecture built on a four-layer model of redress, recognition, participation and commercial vehicles. |
| Canada: Wah-ila-toos | N/A – selected First Nations specific case study | Nations specific case study Government coordination function bringing together multiple government departments and programmes aimed at First Nations clean energy transition. |
Policy attributes of international case studies
Across the case studies, several common policy design attributes emerge alongside important differences in emphasis and delivery. The case studies demonstrate how place-based industrial policy is shaped by local circumstances, including organisational capability, industrial history, competitive advantages and transition objectives. They also highlight that success depends less on adopting a single policy model and more on aligning the right mix of governance, investment, infrastructure, workforce and market-shaping measures to the specific conditions of each region.
| Policy Design Attributes | United Kingdom: Barrow-in-Furness | Japan: Ministry of Economy Trade and Industry - METI | South Korea: Space Industry Cluster | United Kingdom: Innovate UK Catapult Centres | Industriklivet -Sweden Green Steel Industrial Policy | Germany: Ruhr Green Transition | Canada: Place-based industrial policy across dispersed regions |
|---|---|---|---|---|---|---|---|
| Multi-level governance coordination | ◉ | ◉ | ◉ | ◉ | ◉ | ◉ | ◉ |
| Federal government regional presence | ◉ | ◉ | ◉ | ◉ | ◉ | ||
| Government procurement or offtake agreements | ◉ | ◉ | ◉ | ◉ | |||
| Workforce transition and upskilling | ◉ | ◉ | ◉ | ◉ | ◉ | ||
| Continuity of policy direction | ◉ | ◉ | ◉ | ◉ | ◉ | ||
| Sovereign capability objectives | ◉ | ◉ | ◉ | ◉ | |||
| Established Central Authorities | ◉ | ◉ | ◉ | ◉ | ◉ | ||
| Supply chain resilience | ◉ | ◉ | ◉ | ◉ | ◉ | ◉ | |
| First Nations partnerships and participation | ◉ | ◉ | |||||
| Region specialisation | ◉ | ◉ | ◉ | ◉ | ◉ | ||
| Regional economic transition plans | ◉ | ◉ | ◉ | ◉ | ◉ | ◉ | ◉ |
| Low carbon product certification | ◉ | ◉ | ◉ | ||||
| Addressing declining economic conditions | ◉ | ◉ |
About the research
NZEA commissioned Urbis in March 2026 to undertake research into global place-based industrial policy and innovation approaches. The research examines how international place-based industrial and innovation policy approaches have been designed and implemented, with a focus on the policy models, delivery settings and place-based attributes and conditions that can support regional economic transition, industry development and investment decision making.
The research draws on:
- a rapid global scan to identify and assess place-based industrial and innovation policy approaches including assessment of the policy approaches against criteria including their potential benefits, key success factors, relevance to the Australian context and implementation considerations
- nine international case studies, examining the common attributes across policy design, funding mechanisms and place-based attributes.
The research identifies key policy design attributes, different funding mechanisms and the place-based characteristics of each region to highlight how economic systems, geography, government structure, institutional capacity, resource availability, population density, infrastructure networks, labour markets and geopolitical positioning all materially influence how policies are designed and implemented. NZEA supports evidence-based conversations that help regions navigate change and realise long-term opportunities.
Read the report [PDF 2.06 MB]
Read the Urbis report: Research and global case studies of industrial and innovation place-based policy.
More information
Find out more about this research and other NZEA reports.