This article examines a heretofore underexplored category of automotive‐producing nation known as the semi‐periphery. These nations are neither “core” automotive nations whose power derives from hosting headquarters of major automakers, nor are they low‐cost members of the automotive “integrated periphery” like Mexico or countries in Central and Eastern Europe or North Africa. Through a case study of one semi‐periphery country, Canada, the paper assesses automotive semi‐periphery countries' capacity to transition to knowledge‐based activities more typically associated with “core” automotive nations. In so doing, it raises implications for other “semi‐periphery” automotive‐producing nations as well as those currently categorized as “core” or “integrated periphery.”

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The practice of industrial policy in economically advanced jurisdictions is examined, focusing on the post 2000 period. Building from literature and cases from the Canadian automotive industry, the paper demonstrates how actors engaged in the application of industrial policy in economically advanced, high labour cost jurisdictions have responded to shifting pressures and opportunities. Explanation is provided for how those changes have caused objectives to broaden from a focus on manufacturing to industrial R&D. While vertical industrial policy tools endure, the transition has prompted increased emphasis on horizontal industrial policy instruments. The cases also demonstrate that a shift has occurred from externally-generated projects towards internal, organic forms of development, a change that has elevated the primacy of internal, corporate champions in firm level investment attraction.

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