Politicians and business must join forces to ensure Britain can win the "race to the top", the shadow business secretary has said.
Angela Eagle told the Labour Party conference in Brighton that the Conservatives' "ideological obsession" with shrinking the state was leaving the economy "vulnerable".
Ms Eagle, who was also appointed as shadow first secretary of state by leader Jeremy Corbyn, condemned the Government's reaction to a crisis in the steel industry, telling activists it was "hanging by a thread".
She said: "We need a dynamic industrial strategy. We need partnerships championed by an active state.
"Yet with this Government we see the opposite. There is a complete failure to support strategic industries and sectors.
"Take the steel industry. As we meet in Brighton, the entire British industry is hanging by a thread and yet the Government seems reluctant to act decisively.
"No other Government in Europe would be so slow to react. The Government must act now with urgency to safeguard the future of steel making in the UK."
Ms Eagle said the Government was also failing to support the "green economy" and making no progress on tackling the wider "productivity crisis".
And she added: "This Tory Government is also presiding over a skills emergency which threatens economic growth."
The shadow business secretary added: "Prosperity in this century is not guaranteed.
"To succeed, government needs to build the partnerships for businesses to flourish and for the UK to compete successfully in the world.
"That is how we will win in the race to the top."