Republicans and Democrats actually agree that America must be a tech leader. Here’s what this means for the U.S. economy and jobs.

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This is an excerpt from an essay titled “2022’s seismic shift in US tech policy will change the way we innovatePublished as part of MIT Technology Review 10 Breakthrough Technologies 2023,

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It was the perfect political photo op. The occasion was the groundbreaking for Intel’s INTC in September 2022.
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Huge $20 billion chip-manufacturing complex in the suburbs of Columbus, Ohio. Backhoes dotted a construction site that spanned hundreds of flat, empty acres. At a simple forum with the presidential seal, President Joe Biden spoke about ending the term “Rust Belt,” a name popular in the 1980s to refer to the rapidly declining manufacturing sector of the Midwest.

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, Three major bills promise hundreds of billions of dollars in federal investment to transform the nation’s technology landscape. ,

It was the president’s victory lap after some landmark US legislation was passed in late 2021, starting with the infrastructure bill. Together, the three major bills promise hundreds of billions of dollars in federal investment to transform the nation’s technology landscape. While dismantling the Rust Belt may sound like typical political hyperbole, you get the point: The spending spree is meant to revive the country’s economy by rebuilding its industrial base.

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The dollar amounts are jaw-dropping. The bills include $550 billion in new spending over the next five years in the Infrastructure Investment and Jobs Act, $280 billion in the CHIPS and SCIENCE Act (which prompted Intel to move forward on Ohio manufacturing), and nearly $500 million for clean energy. Contains 390 billion. In the Inflation Reduction Act.

The investments feature the most aggressive federal funding for science and technology in decades. But the biggest long-term impact of the legislative flurry may come from its bold embrace of what has long been a political third rail in America: industrial policy.

What has changed now is that the new legislation, which passed with some degree of bipartisan support in Congress, signals a strong appetite across the political spectrum for the US government to reconnect with the country’s industrial base.

The US legislation passed over the past year is actually a series of different industrial and innovation strategies. There is a classic industrial policy single-handedly supporting the chip industry, the Inflation Reduction Act (often called the climate bill), a green industrial policy that supports specific types of companies such as EV manufacturers, and other spending options and policies. Does Scattered throughout the bill are those aimed at creating new jobs. Arguably the most important provisions, at least according to some economists, are designed to boost federal support for research and development.

According to the Semiconductor Industry Association, the CHIPS act has “sparked” nearly $200 billion in announced investments, with several large new fabs planned across the country. The list is impressive: Micron Technology MU,
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says it will spend up to $100 billion over the next two decades on its new facility outside Syracuse, NY, while Taiwan semiconductor manufacturing company TSM,
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2330,
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The world’s largest chip maker announced plans to spend $40 billion on a pair of fabs in Phoenix. Even as the semiconductor industry is reeling from a sudden downturn, the massive new manufacturing facilities, along with the accessories, chemicals and networks needed to run them, represent an era of unprecedented growth for the US in domestic chip production .

Something similar is happening with EVs and the lithium-ion batteries that power them. with passing climate bill And its generous tax incentives for electric vehicles have led to announcements of new battery manufacturing. like semiconductor fabs, explosion of battery manufacturing Will produce boon in related industries to build domestic supply chains. Redwood Materials is building several major new facilities to recycle batteries, extracting metals like lithium and cobalt needed in batteries to power the next generation of EVs.

Many other sectors could benefit from the federal spending spree, especially the hundreds of billions for clean tech. $8 billion for clean hydrogen and $10 billion for carbon capture, including support for facilities take carbon dioxide directly out of the airAn experimental new technique.

But what has really caught the attention of many interested in strengthening innovation in America is the $174 billion in CHIPS and SCIENCE Act for Scientific Research and Development and Technology Commercialization. The National Science Foundation (NSF) alone gets $81 billion over the next five years. Some $20 billion goes to a new NSF directorate, including one to support emerging technologies artificial intelligence And quantum computing, The bill also authorizes $10 billion to build regional technology and innovation centers across the country.

, Can the American public be convinced that innovation can lead to widespread prosperity? ,

All of this calls for rebuilding America’s industrial base, recognizing the important role that new technologies such as artificial intelligence will play in its future economic growth. But any new narrative that government can foster innovation and use it to spur economic prosperity is still a lot of work in the works.

Perhaps the biggest unknown is how federal funding will affect local economies and the welfare of millions of Americans who are coping with decades of lost manufacturing and dwindling job opportunities. Economists have long argued that technological progress drives economic growth. But over the past few decades, the prosperity generated by such progress has been largely confined to a few high-tech industries and has benefited mostly a relatively small elite. Can the American public be convinced that innovation can lead to widespread prosperity?

One reason for the renewed optimism is that today’s technologies, especially artificial intelligence, robotics, genomic medicine and advanced computing, offer vast opportunities to improve our lives, especially in education, health care and other services. in areas such as If governments, both nationally and locally, can find ways to help turn that innovation into prosperity in the economy, we’ll really start to rewrite the prevailing political narrative.

david rotman are editors at large of MIT Technology Review, For more information on the 10 Breakthrough Technologies of 2023, visit MIT Technology Review’s website technologyreview.com,

More: CES 2023: Tech law shifting from antitrust focus to broadband, cyber security

New 2023 EV tax incentives: How they work, which cars qualify, and where to get more savings

Credit: www.marketwatch.com /

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