Lessons learned from half a century of US industrial policy

Though US lawmakers are divided over just about everything, Congress appears ready to approve pending bills to support research, development, and production of a new generation of semiconductors with bipartisan majorities. Separate measures in the House and Senate[1] respond partly to supply chain shortages, now holding up automobile production and much else, and partly to fears of Chinese dominance in a high-tech industry.

These measures, along with other bills in the legislative hopper, mark a comeback of US industrial policy—government support to nurture favored economic sectors. The track record of such efforts has achieved mixed success at best. While import protection of aging industries seldom pays off, R&D subsidies have sometimes achieved their goals. But jobs created or saved by industrial policy often entail high costs, while targeting a single firm to carry the mission seldom succeeds. On the other hand, industrial policy can attract world-class foreign firms to invest in the United States.

 
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Πηγή: piie.com