This discussion paper seeks to examine the rationale and relevance of industrial policy for countries in an open economy setting. Many observers consider that strategic trade and industrial policies have propelled the success of East Asian economies leading to significant poverty reduction. Industrial policy is seen as a key driver for increasing the participation of new productive sectors in domestic economy across the agriculture, industry and services sectors. The paper has conducted a survey of the industrialization experience in the Asia-Pacific while drawing out the critical policy lessons and mapping the challenges for the future.