Global Reach Required in New Industrial Race – Ken Silverstein
TL/DR –
The article discusses the importance of rebuilding the American industry with a global strategy rather than focusing on isolationist measures. It cites the Chips and Science Act of 2022 and the Inflation Reduction Act of 2022 as incentives for domestic production in sectors like semiconductors, battery, solar, and clean-energy manufacturing. It argues that while reshoring strengthens supply chains and decreases vulnerabilities, success requires innovation, scale, and global integration.
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A New Era of Industrial Competition Dawns, Calls for Rebuilding American Industry
Phoenix, Arizona is witnessing the construction of one of the largest industrial complexes in the United States, a massive semiconductor plant. This endeavor is a result of the Chips and Science Act of 2022, a move by the Biden administration aimed at rebuilding domestic semiconductor manufacturing and strengthening the critical supply chains. The initiative is already making strides by training thousands of workers and stimulating suppliers.
The global market is taking a plunge into a fresh phase of industrial competition. To be victorious in this race, it’s crucial to foster businesses that can compete on a global scale, rather than hiding behind trade barricades. Leading nations invest in cutting-edge industries, promote technological innovation, and form strong international partnerships.
My research experience in China has shown me that the secret to industrial success lies in scale and global partnerships, rather than isolation. Interestingly, while China does protect its industries at home, it also made deliberate efforts to establish factories, train workers, and develop production lines capable of serving international markets, exporting technology, and securing supply chains. These outward-looking efforts, rather than narrow protectionism, have been key to China’s success.
However, for the past two decades, the United States has largely relied on the global market for key technologies, from electric motor magnets to active pharmaceutical ingredients. This approach started to unravel due to supply chain disruptions, the pandemic, and escalating geopolitical tensions, all of which exposed vulnerabilities.
In response to these issues, Washington has passed laws intended to reshape domestic commerce. These include the Chips and Science Act of 2022 to incentivize semiconductor factories and the Inflation Reduction Act of 2022 to support domestic battery, solar, and clean-energy manufacturing. The goal is to build industries that are globally competitive and drive technological advances.
While this approach of rebuilding domestic capacity and reshoring industries is a healthy correction, it is only half the battle. Protectionist policies and an isolationist mentality don’t usually lead to the development of globally competitive industries. It’s important to remember that the ultimate goal is to build domestic industries that can compete on a global scale.
One great example worth noting is the construction of the Taiwan Semiconductor Manufacturing Co. in Phoenix, which has attracted more than $65 billion in private investment. This project will generate 6,000 direct high-tech jobs, 20,000 construction positions, and serve as a U.S. hub for advanced chips used worldwide. This testifies that reshoring is necessary, but it should also be paired with a global strategy.
The world isn’t shying away from globalization; instead, it is transitioning into a phase where nations are aggressively competing to shape it. Consequently, it is essential to rebuild the American industry, a strategy that involves engaging with the world rather than retreating behind economic walls. We need to be ambitious in positioning American industry to shape global markets for decades to come.
Written by Ken Silverstein for InsideSources.com. Ken has covered energy and international affairs for years.
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