In late 2018, amid American concerns about whether Canada would welcome Hua...
2021-04-09 2 ENGLISH REPORTS
The pull of China’s economic and technology influence is like that of the Borg in Star Trek— inexorably subsuming others into its mindset. To continue living in a world in which it is assumed to have no impact on U.S. economic thinking is to believe, as Larry Summers does, that “[t]he laws of economics, it’s often forgotten, are like the laws of engineering. One set of laws works everywhere.”24 This was never true—and it certainly is not true with China. China requires a new set of economic laws that recognize the need for an advanced technology strategy, for unless the U.S. federal government establishes such a strategy, the United States will in all likelihood continue to lose market share in a host of advanced industries, including aerospace, life sciences, vehicles, semiconductors, and Internet, with negative implications for innovation, national security, and living standards.
While China is the leading factor motivating a rethinking of a U.S. AITS, we should also remember that an effective one will also help the U.S. economy compete more effectively in advanced industries with other nations and regions, such as Japan and Europe. A FRAMEWORK FOR THINKING ABOUT AN ADVANCED INDUSTRY AND TECHNOLOGY STRATEGY The choice of industrial strategy is not binary: Adam Smith laissez faire vs. Xi Jinping’s neocommand economy. In fact, there is a continuum of state involvement in industry and technology policy from doing nothing to picking particular firms and technologies (e.g., rather than batteries, the government picks only gold nanowire gel electrolyte batteries for support). (See figure 2.) For most, particularly free-market conservatives, position 1 (leave it principally to the market) is the right approach. Position 2 (support factor inputs such as science funding and non-specific policy tools such as STEM immigration and the R&D tax credit) is often acceptable, particularly to more centrist and liberal economists.
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