The birth of a national industrial policy

The Biden administration’s supply chain “review” is a bigger deal than you might think.

From Fortune CEO Alan Murray’s CEO Daily, mailed to subscribers Friday:

I read the order yesterday—you can find it here—and was surprised by its sweeping scope. A few things to note:

—The order goes far beyond chips and PPE. It calls for a 100-day review of four key product areas: semiconductors, batteries, ‘rare earth’ minerals, and pharmaceutical ingredients. And it also calls for a year-long review of six key sectors: defense industrial base, public health and biological preparedness, information and communications technology, energy, transportation, and agriculture. That’s pretty much the entire economy.

—It involves not one agency, but all of government, including the departments of Defense, Commerce, Agriculture, Transportation, Energy, Health and Human Services, and Homeland Security. It is effectively an order to the entire cabinet.

—The “supply chain” frame masks a broad agenda, looking at any risk related to “defense, intelligence, cyber, homeland security, health, climate, environmental, natural, market, economic, geopolitical, human rights or force labor,” as well as “reliance on digital products that may be vulnerable to failures or exploitation.”

Add it up, and the “supply chain” review looks like the birthing of a national industrial policy—something the U.S. has long shied away from for fear it would lead to excess government meddling in markets. And remarkably, the effort appears to have broad bipartisan support. President Biden met with a group of legislators from both parties before signing the order and afterwards called it “the best meeting we’ve had so far.”

My take: Murray, briefly my boss at Fortune, was previously a deputy managing editor at the Wall Street Journal.

See also: Can Apple do anything to ease America’s chip shortages?

8 Comments

  1. Robert Harris said:
    My take typical democrat over regulation of private business which will cripple business

    2
    February 26, 2021
    • Gregg Thurman said:
      My take: A very late effort to STOP IP theft and an over reliance on governments hostile to our way of life (democratic/capitalism).

      4
      February 26, 2021
  2. Jerry Doyle said:
    “…. It involves not one agency, but all of government, including the departments of Defense, Commerce, Agriculture, Transportation, Energy, Health and Human Services, and Homeland Security. It is effectively an order to the entire cabinet.”

    Not really! There are other governmental entities needing inclusion, such as the US Dept. of Education. The PRC has extended its tentacles deeply into the nation’s higher educational institutions through financial grants, endowments, foundations, student exchanges that are efforts not entirely for educational purposes as much as for PRC & CCP propaganda to indoctrinate America’s young generation as they transition into the world-of-work. This indoctrination can have and does have an effect on the ability of the US to establish foreign policy in its dealings with the PRC, especially as these future generational leaders aspire to leadership positions in the corporate world and into governmental bureaucracy.

    2
    February 26, 2021
  3. David Emery said:
    We’re talking about 2 separate (but relevant) issues. One is the supply of ‘things’, i.e. chips or raw materials. The other is the supply and protection of ‘technology’/intellectual property. Both are important, and could be included in a national industrial policy. But I think the primary focus for this effort is on ‘things’, rather than ‘ideas’.

    The primary thought I have about ‘industrial policy’ is “There’s No Such Thing As A Free Lunch.” Understanding the (often unintended) consequences of policy and of investments (government or commercial) will be key to success. This includes the international aspects of a policy.

    5
    February 26, 2021
  4. John Konopka said:
    This could be hugely helpful for our country. By not having an industrial policy we have effectively let the wealthy write our policy for their benefit, not ours. I’m not smart enough to know how this should work out, but I give them my support for now.

    7
    February 26, 2021
  5. Peter Kropf said:
    Concerns about government control?

    Electric power – regulated or unregulated? A good moment to choose.

    1
    February 26, 2021

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