GEOECONOMICS AND INDUSTRIAL POLICY: THE CASE OF THE NEW BRAZILIAN INDUSTRY (NIB)

Interagency. Institute N.2 SET 2025 ISSN 2789 – 8040 DOI 10.5281/zenodo.17944998 1 GEOECONOMICS AND INDUSTRIAL POLICY: THE CASE OF THE NEW BRAZILIAN INDUSTRY (NIB) Silvana Schimanski https://orcid.org/0000-0002-9405-4653 Interagency. Institute N.2 SET 2025 ISSN 2789 – 8040 DOI 10.5281/zenodo.17944998 1 Global geoeconomic dynamics have stimulated the resurgence of industrial policy and its tools for overcoming dependence on global chains. Both developed and developing countries have revived industrial policy to relocate strategic industries (reshoring), diversify suppliers, and ensure autonomy in critical sectors. Although this strategy is aligned with Sustainable Development Goal (SDG) 9—which aims to build resilient infrastructure, promote inclusive and sustainable industrialization, foster innovation, support economic development and human well-being, with a focus on equitable and affordable access, rehabilitate industries to make them sustainable, improve the technological capabilities of industrial sectors in all countries, and promote industrial diversification and value addition to commodities - its resurgence is a response to the vulnerabilities of the contemporary international system, guided by the logic of complex interdependence. In January 2024, Brazil launched “Nova Indústria Brasil (NIB)”, aiming to promote its reindustrialization through specific goals for six missions, covering the sectors of infrastructure, housing, and mobility; agribusiness; the health industrial complex; digital transformation; bioeconomy and energy transition; and defense technology. This policy brief presents reflections on the contributions of a interagency cooperation and a multilevel governance mechanism to the sustainability of industrial policy, especially in developing countries, so that they do not deepen inequalities or dynamics of exclusion at the domestic level. Geoeconomics focuses on the use of economic power as a form of influence and domination, seeking to understand how such power shapes international relations. The relationship between geoeconomics and industrial policy is deep and strategic, as both deal with the use of economic power to achieve national or international objectives. Their connection occurs through the control of natural resources, reduction of foreign dependence on resources and technologies, use of trade policy tools, investments in sectors defined as strategic, technological race, and control of production chains to strengthen strategic sectors of the economy. From a geoeconomic perspective, these instruments are used not only to develop the domestic economy, but also to increase international competitiveness, reduce external dependencies, strengthen sovereignty in the face of pressure from other Summary Background Interagency. Institute N.2 SET 2025 ISSN 2789 – 8040 DOI 10.5281/zenodo.17944998 2 countries, and increase global influence. Recent events have exposed the vulnerabilities of the complex interdependence of the global economy , such as the COVID-19 pandemic (March 2020 and May 2023); Russia's invasion of Ukraine (February 2022 to present); the deepening of tensions in the Middle East (Israel, Palestine, Iran, Lebanon) since October 2023; the tariff war unilaterally imposed by US President, Donald Trump, on suppliers from all continents (since his presidential inauguration in 2025, but with roots in his pre-pandemic term). These events have put pressure on global supply chains, reigniting geoeconomic concerns. Therefore, countries have resumed industrial policy to reduce vulnerabilities in strategic sectors and supply chains, encouraging governments to promote domestic production and innovation. The global transition to green energy is an important driver of new industrial policies, with high-income countries increasingly using these tools to promote clean technologies. Concerns about the risk of falling behind in critical and emerging technologies are motivating governments to develop strategies to stimulate innovation and competitiveness in specific sectors. For many years, industrial policy was no longer valued, due to the dominant economic thinking that emerged in the 1980s (economic neoliberalism). The prevailing maxim was that “the best industrial policy is no industrial policy,” advocating for a reduction of the state´s role in the economy, unrestricted trade liberalization, privatization, and market deregulation. Within this logic, state intervention in the economy (such as through industrial policy) came to be seen as inefficient, distortive, and counterproductive. This change had profound consequences on the development strategies adopted by many countries, especially in Latin America, Africa, and parts of Asia. Many countries never even developed productive capacities. The logic of the global market promoted the concentration of the production of high-tech manufactured goods and innovation capacity in developed countries and the maintenance - with rare exceptions - of developing and less developed countries as suppliers of inputs, deepening global inequalities. And those, such as Brazil for example, faced profound deindustrialization in the following years. In modern geoeconomics, technological and industrial advancement is a field of competition between countries, and in this context, industrial policy becomes an instrument of state power. Industrial policies can influence international trade, investment flows, and prices in global markets, with potentially significant implications for trading partners and the world economy. Interagency. Institute N.2 SET 2025 ISSN 2789 – 8040 DOI 10.5281/zenodo.17944998 3 According to data from the World Economic Forum, in 2009, the “Global Trade Alert” tool tracked a total of 90 interventions related to industrial policy—protection of infant industries, support for domestic industries, tariff and non-tariff measures, and investment-related measures. Between January 2023 and June 2024, more than 2,500 new industrial policy measures were documented, bringing the cumulative total since 2009 to more than 15,000 interventions implemented (Figure 1). Figure 1: Increasing industrial policy Source: World Economic Forum, 2025. There are numerous examples of the recent return of industrial policy adopted in different countries, either for global strategic reasons or out of concern for maintaining manufacturing processes within their territories due to their effects on employment and income. This aspect is illustrated in Figure 2, which shows the decline in manufacturing in countries' Gross Domestic Product (GDP) between 1990 and 2024. Findings Interagency. Institute N.2 SET 2025 ISSN 2789 – 8040 DOI 10.5281/zenodo.17944998 4 Figure 2: Deindustrialization: fall in manufacturing as a percentage of GDP Source: Adapted from The World Bank. In the United States, for example, the “CHIPS and Science Act” ( (2022) approved a $280 billion package to strengthen the semiconductor, science, and technology industry. The package includes subsidies and tax incentives for companies that produce chips in the US, with a view to reducing dependence on Asia, especially Taiwan and China, and maintaining technological leadership. The European Union has been using industrial policy for ecological transformation and strategic autonomy. Plans such as the “European Green Deal” (2019) and the “European Industrial Strategy” (2021) aim to develop more sustainable industries by promoting renewable energy, electric cars, and hydrogen, as well as reducing dependence on imported fossil fuels and critical minerals. The “European Chips Act” (2023) aims to strengthen the semiconductor ecosystem in the EU, with a view to autonomy and resilience. The “Net-Zero Industry Act” ( (2024) seeks to facilitate investment in clean technologies (solar panels, batteries, etc.) and simplify licensing. China, through the “Made in China 2025” initiative launched in 2015, aims to transform the country into a technological powerhouse by investing in sectors defined as strategic, including artificial intelligence, robotics, electric vehicles, biotechnology, and semiconductors. This is a centralized industrial policy plan, with strong state support, to replace imports and dominate global chains. It should be noted that the argument of multipolarity has guided its policies, arguing that nations, social groups, and communities should participate in economic and social development, share its benefits, and correct imbalances. Interagency. Institute N.2 SET 2025 ISSN 2789 – 8040 DOI 10.5281/zenodo.17944998 5 India has been implementing its “Make in India” program since 2014, with a renewed focus on industrial innovation, including productive advantages and digitization. Its tools include programs to attract foreign direct investment and strengthen local industry. It also offers tax incentives and subsidies for the domestic production of electronic goods, medical equipment, and electric cars. The country has adopted strategic public communication aimed at building national pride, encouraging participation in industrial initiatives, and attracting both domestic and foreign investment. The “Nova Indústria Brasil (NIB)” aims to strengthen Brazilian industry, making it more competitive, generating jobs, and promoting innovation. Launched in January 2024, it sets goals, makes investments, and implements strategies such as the use of public procurement to reshape the Brazilian industrial landscape. NIB is structured around six missions, with goals established for each one: 1. Sustainable and digital agro-industrial chains for food, nutritional, and energy security: Aims to increase the share of agro-industry in agricultural GDP to 50%, achieve 70% mechanization in family farming, and ensure that at least 95% of the machinery and equipment used is manufactured domestically. 2. Resilient industrial health complex to reduce the vulnerabilities of the SUS and expand access to health care: Seeks to supply 70% of the national needs for the production of medicines, vaccines, medical equipment and devices, materials, and other health care supplies and technologies. 3. Sustainable infrastructure, sanitation, housing, and mobility for productive integration and well-being in cities: Aims to reduce commuting time from home to work by 20% and increase productive density in the sustainable public transport chain by 25%. 4. Digital transformation of industry to increase productivity: The goal is to digitize 90% of Brazilian industries and triple the share of domestic production in the new technologies segment. 5. Bioeconomy, decarbonization, energy transition, and security to guarantee resources for future generations: Proposes cutting carbon emissions by 30% per unit of GDP added by industry, increasing the share of biofuels in the transport energy matrix by 50%, and increasing the technological and sustainable use of biodiversity by industry by 1% per year. 6. Technologies of interest for national sovereignty and defense: Aims to achieve 50% autonomy in the production of critical defense technologies. Each mission is supported by specific investments and strategies for industrial strengthening and the promotion of sustainable development. The program foresees investments of R$300 billion by 2026, distributed in financing, non-reimbursable public resources, and equity stakes, managed by institutions such as Banco Nacional de Desenvolvimento Econômico e Social (BNDES, Brazilian Interagency. Institute N.2 SET 2025 ISSN 2789 – 8040 DOI 10.5281/zenodo.17944998 6 Development Bank), Financiadora de Estudos e Projetos (FINEP, Brazilian Funding Authority for Studies and Projects) and Empresa Brasileira de Pesquisa e Inovação Industrial (EMBRAPII, Brazilian Company of Research and Industrial Innovation). These missions aim not only to modernize the industrial sector but also to align Brazil with new global demands for sustainability, innovation, and technological security. The discussion on geoeconomics has gained momentum on the international stage, especially in the context of reconfiguration of global value chains and strategic disputes over critical inputs. In this environment, Brazil cannot renounce instruments capable of strengthening its position on the global stage, under penalty of remaining in a peripheral and vulnerable position. Nova Indústria Brasil (NIB) emerges as an opportunity to reposition the national economy in strategic sectors such as clean energy, digital transition, and biotechnology. More than an industrial or economic stimulus policy, NIB should be understood as a geoeconomic mechanism: an effort to reduce external dependencies and strengthen internal capacities, as an instrument of sovereignty in a world marked by disputes. Adopting an interagency approach supported by a multilevel governance strategy in the NIB implementation and execution can increase its efficiency, legitimacy, and resilience. By bringing together the federal government, states, municipalities, and social actors, industrial policy ceases to be merely an economic instrument and broadens its purpose, aligning with several Sustainable Development Goals, particularly SDG 9. It becomes consolidated as a collective project for development and national sovereignty. Interagency cooperation can be defined as a process of institutional coordination involving coordinated action between different agencies with specific powers and mandates, which converge in the pursuit of common goals. Such cooperation is characterized by information sharing, complementary functions, and resource integration, constituting a governance strategy aimed at overcoming institutional fragmentation and maximizing results in the face of complex and multidimensional Conclusions Recommendations Interagency. Institute N.2 SET 2025 ISSN 2789 – 8040 DOI 10.5281/zenodo.17944998 7 problems. The NIB can gain efficiency, legitimacy, and resilience by adopting multilevel governance, where the Union, states, municipalities, and social actors complement each other. This transforms industrial policy not only into an economic strategy but also into a collective project of development and sovereignty. By involving different levels of power and multiple social actors, the flow of information that contributes to the ambition of repositioning the country in strategic production chains is expanded. A multilevel governance presupposes: 1. Federal coordination: subnational entities (states and municipalities) have distinct productive and technological vocations, as well as proximity to local productive arrangements. Integrating these specificities into the NIB strengthens the territorial adherence of the policy, avoiding homogeneous solutions that disregard regional diversities. States and municipalities have distinct productive vocations, local productive arrangements, and varied infrastructure. Incorporating these specificities into the NIB increases the territorial effectiveness of industrial policy. 2. Social and business actors: unions, business associations, universities, and research centers can offer practical knowledge, innovations, and accurate diagnoses of each sector's needs. This dialogue increases the legitimacy of industrial policy, contributing to the design of policies that are more in line with society's needs and enriching its capacity for adaptation. 3. Participation and agreement mechanisms: thematic councils, sectoral chambers, and regional forums can serve as channels for consensus building, reconciling economic, social, and environmental interests. This reduces conflicts and generates greater co-responsibility in policy implementation. 4. International-local coordination: by aligning local demands with national strategies and international commitments (such as green transition and digitization), multilevel governance increases Brazil's bargaining power in the geoeconomy and strengthens Brazil's geoeconomic integration and strategic autonomy. It is recommended that territorial entities strengthen their regional capacities, aligning themselves with the objectives of Nova Indústria Brasil, to promote local productive development in a sustainable manner. A methodological and participatory approach offers a clear path for the preparation, design, and implementation of productive transformation strategies, adapted to the reality of each territory, fostering the closing of gaps, strengthening regional competitiveness, and contributing to improving the quality of life of the population. This approach is aligned with several Sustainable Development Goals, in particular SDG 9 (Industry, Innovation, and Infrastructure), ensuring the engagement of public, private, academic, and civil society actors, as well as harmonization between national and regional levels. Interagency. Institute N.2 SET 2025 ISSN 2789 – 8040 DOI 10.5281/zenodo.17944998 8 BLACKWILL, Robert D. HARRIS, Jennifer M. War by Other Means: Geoeconomics and Statecraft. 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