Lost in transition: systemic innovations and the new role of the state in industrial policy Enzo Rullani 1 • Claudio Cozza 2 • Antonello Zanfei 3 Received: 23 May 2016 / Accepted: 8 June 2016 / Published online: 17 June 2016 Ó Associazione Amici di Economia e Politica Industriale 2016 Abstract We argue that the present economic crisis reflects the on-going transition towards a networked, knowledge based, globalised economy, and this transition affects the role of industrial policies. From this perspective, we suggest that the State should intervene along three main lines. First, action is needed to make the quality and innovative potential of territories recognisable. Second, substantial investments should be targeted to human capital formation, and to communication skills and infrastructures. Third, policies should be designed to maintain and upgrade skill intensive activities, and to attract high value added foreign investment. A bottom up approach should be adopted in the design of policies, as to favour the self-organization of individuals, creative clusters and communities. Keywords Industrial policy Á Innovation Á Transition Á Knowledge economy Á Globalisation JEL Classification E6 Á L5 Á O4 1 Crisis as transition We live in times of transition. The globalization of markets and the digitalization of knowledge are changing production, consumption as well as social and economic relationships. This transition has been examined from a variety of perspectives and & Antonello Zanfei antonello.zanfei@uniurb.it 1 Venice International University, Venice, Italy 2 University of Trieste, Trieste, Italy 3 University of Urbino, Urbino, Italy 123 Econ Polit Ind (2016) 43:345–353 DOI 10.1007/s40812-016-0045-6