This graduate paper analyzes the basic concept, role and meaning of industry for the economy - in general, and also analyzes the EU industry and the importance of industry for individual member states. An attempt will be made to position industrial policy within general economic policy. Industry will be researched by showing the trends of key indicators of industrial development, namely: industry structure, gross value added by activities with special emphasis on industry, export performance of industry, structure of gross investment in industry, analysis of the degree of industrialization of countries, analysis of individual indicators of economic and political freedoms relevant to industry, as well as the effect of industry on other activities. Furthermore, an attempt will be made to explain the notion of market failure, the issue of low returns on economic activities and high financing costs as factors determining industrial growth. Productivity will be defined and productivity measures at the micro and macro levels will be explained, and labor productivity measures will be explained. In addition, economic and political factors that are important for the development of the industry are observed. Despite the high level of digitalization and online business, industry remains and must remain a vital component of the European economy. The Republic of Croatia has a positive trend in the implementation of European regulations, as well as in increasing economic and political freedoms. When writing the paper, methods of data preparation and processing, systematic collection and other methods standard in the research process were used. The paper refers to relevant scientific articles and other scientific papers.