For three decades, corporate neutrality was a viable posture. Globalisation rewarded distance from the state; efficiency trumped alignment. Firms that kept governments at arm’s length could still prosper—indeed, often did better than those cosying up to ministers. That era has ended.
Industrial policy is no longer the exception, but the default operating system. Governments are not just regulating markets—they are funding capacity, directing capital, and choosing strategic industries. America’s CHIPS and Science Act has triggered 630 billion US dollars in semiconductor investments across 140 projects.
The EU’s Net-Zero Industry Act, adopted in May 2024, aims for 40 per cent of clean-tech deployment needs to be produced domestically by 2030. Brussels approved 47 strategic projects in March 2025 spanning extraction, processing, and recycling of critical raw materials.
Policy is now explicitly tied to security, sovereignty, and resilience. Semiconductors, energy transition, defence, critical infrastructure—these are no longer left to markets alone. Institutions such as the European Commission and policy forums around the World Economic Forum no longer hide the intent: markets will be shaped, not merely supervised.
Pick a side
Many firms still claim to be non-political, market-led, regulation-agnostic. In practice, this translates into late engagement, reactive lobbying, and missed influence windows. In practice, that neutrality increasingly looks not like impartiality, but disengagement.
Industrial policy creates insiders and outsiders. Influence accrues early—at the design stage, not implementation. Firms that wait for clarity arrive after decisions are made.
Intel for example expressed frustration over delays in CHIPS Act funding before eventually securing 7.86 billion US dollars in direct grants. By then, the programme’s conditions were set in stone. TSMC fared little better, delaying its Arizona fabrication facility (or fab) from 2026 to 2027-28 after clashing with local unions over skilled workers. Samsung pushed back its Texas facility. All three are now building alternative fabs in Japan, Germany, Poland, and Israel, where subsidy conditions proved more accommodating.
The message is blunt: arrive late to the policy table, and you eat what you’re given. After all, if you are not shaping policy assumptions, you are being shaped by them.
The new corporate–state relationship is not about capture or compliance. It is about structured co-existence: shared objectives, negotiated constraints, mutual dependencies. The most effective firms understand where state priorities are non-negotiable and where commercial logic still matters.
Strategic engagement
Taiwan’s government essentially declared in the 1980s, “We are going to have a semiconductor industry”. TSMC duly emerged as the world’s dominant foundry, producing more than 60 per cent of global semiconductors. That was industrial policy done well—strategic alignment without strategic dependence. The government shaped the market; TSMC dominated it commercially.
Subsidies, guarantees, and protection create short-term comfort. Over time, they distort strategy, slow innovation, and lock firms into political cycles. Intel’s position illustrates the danger: once the world’s chip titan, it now trails TSMC and Samsung technically whilst the US government converts grants into equity stakes. Political pressure now plays on the company’s decisions, as analysts have noted. The danger is not state involvement. The danger is strategic dependence.
Strategic engagement looks different from traditional lobbying. Corporate affairs moves from reputation management to power literacy. This means policy fluency at board level, scenario planning that includes political outcomes, and investment decisions stress-tested against policy trajectories. Engagement becomes continuous, not episodic.
Timelines are shortening
Why does this matter now rather than later? Industrial policy timelines are shortening. Elections no longer reset direction—they accelerate it. The EU’s Clean Industrial Deal, introduced in February 2025, shifted priorities from pure climate goals towards competitiveness within months of the new Commission taking office. Trump’s administration has reportedly considered eliminating the CHIPS Act altogether, despite having funnelled billions to chipmakers. Firms that delay engagement will face stranded assets, compliance shocks, and loss of market access.
The question is no longer whether companies should engage with the state. The question is whether they can do so intelligently. The winners will understand power, protect autonomy, and invest ahead of mandates. They will treat regulatory and legislative changes as core business risk, on par with market and financial threats.
They will also recognise what losing looks like. Computer and electronics construction in America jumped from two billion US dollars in 2016 to 127 billion US dollars in 2024—more than half of all manufacturing construction. That transformation did not happen through market forces alone. It happened because some firms engaged early whilst others stood on principle.
Those that stood aside are now building fabs elsewhere or accepting conditions they cannot alter.
Photo: Dreamstime.
