Although it is often assumed that private firms will have the required skills to generate impact, in many contexts governments actively sponsor new private capabilities via targeted industrial policies. Government capabilities are again critical here, as poorly designed policies may end up wasting public resources with unproductive firms that might request continuous support even when their initiatives fail. This chapter applies the decision framework presented in Chapter 3 to explore whether governments should expand their boundaries to include development banks with a mandate to improve private capabilities. The chapter also presents additional applications such as how private capabilities can be developed to deal with pandemics, taking COVID-19 as an example, and to promote the supply of affordable, frugal products and services.