Babbage Forum in the US 2024: Rethinking industrial policy and technological leadership

The United States faces a pivotal moment in industrial policy as it navigates economic competitiveness, geopolitical tensions, and rapid technological advancements. With global supply chains in flux and strategic industries under pressure, policymakers are reconsidering the role of public investment and industrial strategy to sustain technological leadership.

The Biden administration’s recent initiatives mark a significant shift towards “modern supply-side economics,” aiming to bolster domestic manufacturing in key sectors such as semiconductors, green energy, and artificial intelligence. However, questions remain about the long-term financial sustainability of subsidies and the balance between public intervention and private sector incentives.

On 18 June 2024, Babbage Forum members convened in Berkeley, California, to discuss the current state of US industrial innovation policy. The meeting brought together policymakers, industry leaders, and academic experts to assess the effectiveness of recent policy measures and explore strategies for sustaining industrial growth and technological leadership.

Participants engaged in keynote presentations and roundtable discussions on three critical themes: the green transition, semiconductor supply chains, and the emerging frontiers of AI and quantum computing. The discussions underscored the need for a coordinated approach that integrates supply-side incentives with demand-side policies to ensure long-term competitiveness.

The US remains locked in a high-stakes technology race with China, particularly in advanced manufacturing and clean energy. While recent legislation, such as the CHIPS and Science Act and the Inflation Reduction Act (IRA), has driven unprecedented investment, challenges persist in scaling production, securing supply chains, and maintaining bipartisan support for industrial policy.