Cultural industry is gaining attention in many developed countries. Local cultures have become a lucrative business in the age of globalization. The purpose of this study is to examine the role of government in developing industrial policy to enhance Taiwan?s competitive advantage in the pop music industry. After analyzing policies implemented in South Korea, Sweden and United Kingdom, and in-depth interviews with executives from the industry, this study concludes that a well-designed industrial policy is required to revive the competitiveness of pop music industry in Taiwan. It is recommended that the government should implement policies that are oriented to the improvement of management mechanism, establishment of talent cultivation, intensive production and intellectual property rights protection.