In the context of a renewed global interest in industrial policy as a driver of development, this paper identifies an opportunity to discuss issues around policy capacity and policy capacity development, particularly in developing countries. The premise is that discussions on how governments can implement more efficient and effective industrial policies to foster industrialization rarely directly discuss the requisite government policy capacities needed for the purpose. The discussion suggests that to increase industrial policy capacities, developing countries need to invest in strengthening the professionalization of public officials, improve their ability to systematically assess the socioeconomic impacts that can be associated with public policy interventions. In short, governments need improved ability to engage with evidence and to substantiate policy learning. In addition to efforts to strengthen organizational tools, resources and processes, developing country governments also need to invest in dynamic capabilities, including for networking and collaboration with an increasingly heterogeneous multi-stakeholder base. Hence, governments may be better placed to anticipate and address emerging opportunities and challenges with implications on industrial development.