Industrial policy is back in fashion. But it is no longer what it used to be. At the technological frontier and amid slower global growth, governments are returning to an active economic role. Not to build factories from a fixed list of priority sectors, but to shape ecosystems and connect knowledge, markets, and capital. The key shift of recent years is the move from sector targeting to targeting capabilities and networks. In this sense, the creative economy becomes industrial policy of a new generation.
The old model of industrial policy was built around a simple question. Which sectors should be supported? The answer came as lists, quotas, subsidies, and tax breaks. This approach worked during catch-up development. Technologies were known. Value chains were stable. The main task was to scale production. At that stage, the state could pick winners. Sometimes it worked. Sometimes it did not. But the logic was straightforward.
The knowledge economy breaks this model. Sector borders blur. Value chains turn into networks. Breakthroughs happen at the intersection of technology, services, and data. Choosing a sector no longer guarantees results. Supporting one industry does not automatically create growth in another. The state faces a new dilemma. Keep picking sectors and risk mistakes. Or change the very logic of intervention.
This is where the creative economy appears as industrial policy 2.0. Not as a set of grants for creative industries. Not as a cultural agenda. But as a way to rethink economic development itself. The focus shifts from sectors to capabilities, from single firms to networks, from output to continuous renewal.
This shift is especially relevant for countries that have exhausted the old industrial growth model. Production can be strong. Exports can grow. But without updating the structure of value added, growth slows. Pressure from new competitors rises. Production advantages fade. At this point, the creative economy stops being a buzzword and becomes a survival tool.
The core idea of the new industrial policy is simple. The state should not guess which sectors will win. It should create conditions where winning combinations of knowledge, technology, and business emerge on their own. This requires a different role for government.
Not a conductor, but a coordinator. Not a last-resort investor, but a rule architect. In this model, attention moves to systems. To institutions. To links between universities, firms, and markets. To talent mobility. To how fast knowledge spreads. To the economy’s ability to learn from mistakes. These elements become the true objects of policy.
Experience from industrialized countries shows that excessive sector targeting starts to hurt. It locks in old structures. It creates political economies of support. It weakens competition. It blocks new entrants. Under fast technological change, this becomes a serious risk.
That is why the new logic proposes a different focus. Support activities, not sectors. Support missions, not industries.Strengthen innovation, design, technology integration, and market entry, rather than subsidizing output.
The creative economy works here as an umbrella. It covers digital tech, design, content, engineering, and professional services. These activities cut across the whole economy. They strengthen industry. They create new markets. But they cannot be squeezed into one sector.
It is important to be clear. The creative economy does not replace industrial policy. It changes its tools. Sector priorities may remain, but they become flexible. They are complemented by horizontal criteria. Contribution to renewal. Contribution to innovation chains. Contribution to exporting knowledge and services.
This approach reduces risk. It leaves room for experiments. It allows course correction without political drama. It makes policy more adaptive. For Kazakhstan, this shift matters a lot. The country relied for a long time on an industrial development model. The state actively chose priorities. This delivered results. But new limits are visible now. Productivity growth slows. Exports concentrate. The economy depends on a narrow set of sectors. The creative economy can help escape this trap – but only if understood correctly.
The main mistake would be to reduce the creative economy to a few industries. Film. Design. IT. Content. These matter, but they are not enough. In that form, the creative economy becomes just another sector list, with all the familiar risks.
Industrial policy 2.0 asks a different question. Which capabilities does the economy need to stay competitive?The ability to integrate technologies. To work with data. To prototype fast. To bring products to market. To build brands. To scale services.
These capabilities are not tied to one sector. They work in manufacturing, services, agriculture, logistics, healthcare. That is why investing in them creates a multiplier effect.
Another key element is networks. Innovation rarely happens in isolation. It emerges in dense ecosystems. Where universities connect with firms. Where startups work with large companies. Where capital and knowledge circulate freely. The state should not manage these networks directly. Its role is to lower barriers so they can form.
The network logic also changes geography. Creative activity often concentrates in cities and regions with high interaction density. This creates new growth centers – and new imbalances. Industrial policy 2.0 must consider place, not just sector. Not by building infrastructure for its own sake, but by strengthening connections.
A crucial implication is tolerance for failure. Experiments fail. Startups close. Projects do not take off. In traditional industrial policy, this looks like failure. In the new model, it is part of learning. Without it, ecosystems do not evolve.
This highlights a core difference between industrial policy 2.0 and old approaches. Success is not measured by the number of supported firms or the money spent. It is measured by dynamics. New links. Higher mobility. Faster renewal. For Kazakhstan, this means revisiting evaluation criteria. If creative economy support is judged by project counts or jobs, it loses meaning. If it is judged by changes in economic structure, growth of service exports, and stronger competition, long-term impact becomes possible.
Coordination is another sensitive issue. The creative economy is cross-sector by nature. It touches education, science, culture, industry, services, and finance. If policy is fragmented, effects vanish. Industrial policy 2.0 requires alignment – not in slogans, but in tools. This forces the state to learn a new role. To step back from direct control. To accept uncertainty. To listen to markets. To close ineffective measures. This is hard. But the alternative is stagnation inside an outdated model.
The creative economy is not a magic solution. It does not guarantee growth. But it points in the right direction. It shifts focus from sectors to capabilities. From supporting players to building ecosystems. From short-term wins to long-term adaptation. For Kazakhstan, the choice is sharp. Continue the old industrial policy. Support familiar sectors. Expand priority lists. This will bring predictable but limited results. Or try industrial policy 2.0. With risks. With uncertainty. But with real potential.
In this framework, the creative economy stops being a buzzword. It becomes a tool of structural transformation. And in that role, it deserves a serious conversation.
Lina Yegil kizi, expert of the EconomyKZ.org portal
