Industrial policy is increasingly becoming a central focus of German and European economic policy. In this article, Hanna Hottenrott, Roman Inderst, Eckhard Janeba, Klaus Schmidt, Achim Wambach, and Christine Zulehner develop a framework for industrial policy interventions. They demonstrate that industrial policy measures can be justified when used to promote innovation, climate protection, security of supply, or defense readiness. At the same time, the risks associated with industrial policy—such as distortions of competition, subsidy races, and government failure—must be taken seriously. The authors therefore advocate for a pro-competitive industrial policy that is coordinated at the European level, designed in a market-compliant manner, and focused on clearly defined goals, such as strengthening resilience and security and adapting to structural change. This article is an abridged version of the report by the Scientific Advisory Board to the Federal Ministry for Economic Affairs and Energy bearing the same title, published on August 26, 2025.