National Economic Council Director Brian Deese on Biden’s vision for ‘a twenty-first-century American industrial strategy,’ speech and discussion, Atlantic Council, June 23, 2021
Summary quote: [W}e need a new strategy. An industrial strategy for the second quarter of the twenty-first century. One that draws from the best lessons of the past, but leans into the challenges of the future. This strategy is built on five core pillars: supply chain resilience, targeted public investment, public procurement, climate resilience, and equity.
Prepared speech: https://www.atlanticcouncil.org/commentary/transcript/the-biden-white-house-plan-for-a-new-us-industrial-policy/
FREDERICK KEMPE: Good morning, good afternoon, good evening to our audience all around the world. I’m Fred Kempe, president and CEO of the Atlantic Council, and I’m delighted to welcome you to the latest edition of Atlantic Council Front Page, #ACFrontPage, our premier platform for global leaders.
Today, we’re honored to welcome Brian Deese, the White House director of the National Economic Council, to provide special remarks on the administration’s vision and plans on US industrial policy, a critical topic for the future of not only the American but also the global economy. From supply chains to semiconductors to manufacturing, this issue crosses borders and goes to the heart of the Atlantic Council’s mission of shaping the global future together. We are proud that the GeoEconomics Center has been a leader on this issue since its launch last year under the capable leadership of its director, Josh Lipsky, and Deputy Director Julia Friedlander.
Some may question the need for a US industrial policy, but we all know something has to change. Pandemic-induced trade disruptions and ongoing product shortages have caused real economic damage. The strain on our system has sparked debates about the proper relationship between the public and the private sector. . . .
Deese prepared speech opening, policy topic intros, closing:
Hello, everyone. Thank you to Fred Kempe and the entire Atlantic Council staff for hosting me today. I’m very excited to speak with you all. We meet today at a unique inflection point for American economic policy. Unique in the speed and strength of our economic recovery. At the beginning of this year, our economy was in a tailspin, job growth had stalled, and we were losing, on average, 3,136 people per day to the virus.
Today, we’re in a very different place. COVID-19 deaths are down 85 percent. We’ve averaged more than 500,000 new jobs per month, for the last four months; our economy is growing at the fastest growth rate in almost forty years. In fact, the US is the only major economy where future growth projections are stronger now than they were in January 2020. This is a direct result of our vaccination effort and our fiscal response—and an economic strategy to drive growth from bottom up and the middle out.
At the same time, this pandemic exposed unique economic vulnerabilities. Empty store shelves, shortages of basic medicines, supply chain bottlenecks from computer chips to advanced medical equipment. The acute crisis exposed a long-term hollowing out of our country’s industrial base, occurring over decades. Nearly 90 percent of generic active pharmaceutical ingredient facilities are located overseas and have been moving offshore for the last fifty years. Until the 1980s, the United States was the world leader in rare earths production. Now, China controls 85 percent of global refining capacity.” And the US share of semiconductor production has fallen from almost 40 percent to just over 10 percent over the last forty years.
Our private sector and public policy approach to domestic production prioritized low, short-term costs over security, sustainability, and resilience. This was the wake-up call.
Which is why, as we navigate out of this pandemic, and through this uniquely strong economic recovery, the Biden administration is putting rebuilding that resilience—with a focus on creating good paying jobs for American workers—at the core of our Build Back Better agenda. And it is why, today, I am excited to lay out our vision for a twenty-first century American industrial strategy—a strategy to strengthen our supply chains and rebuild our industrial base, across sectors, technologies, and regions.
It is worth noting at the outset that a national, industrial strategy is neither novel or new. In the early nineteenth century, “the American System” described the set of federal policies designed to grow our early nation’s nascent infrastructure and industrial base at a time when our nation’s economy was driven by agriculture. These policies, including subsidies for transportation and the creation of a national bank, grew the US economy in a way that benefited diverse regions of the US. In the twentieth century the federal government again made major strategic investments after World War II, developing emerging technologies and industries such as microelectronics and biotechnology through federal purchasing, public research, and public-private partnerships. Strong unions in the mid-twentieth century ensured more of the gains of economic growth were broadly shared—though many families of color were still excluded.
At the same time, today’s global economic environment is very different from that of the past: The pace of technological change—the idea of Moore’s law for everything—is upending production processes, transforming supply chains and transforming the modern workplace and meaning of work. The pace of the climate crisis is accelerating—threatening to transform economies, migration patterns, and supply chains. Persistent inequality in the US is slowing economic growth and risks fracturing the democratic stability upon which our economic success depends.
And the approach of our competitors and allies has changed. We should be clear-eyed that the idea of an open, free-market global economy ignores the reality that China and other countries are playing by a different set of rules. Strategic public investment to shelter and grow champion industries is a reality of the twenty-first century economy. We cannot ignore or wish this away.
That’s why we need a new strategy. An industrial strategy for the second quarter of the twenty-first century. One that draws from the best lessons of the past, but leans into the challenges of the future. This strategy is built on five core pillars: supply chain resilience, targeted public investment, public procurement, climate resilience, and equity. . . .
First, the pandemic made clear that resilient supply chains must be at the center of a twenty-first century industrial strategy. . . .
Second, there is a compelling and urgent economic need to make a one-time capital investment in this country today. . . .
Third, we need to reimagine public procurement policy. . . .
Fourth, we need an industrial base that drives our effort to address the existential threat of climate change, which requires a fundamental shift in how we produce—how we power the economy. . . .
Finally, equity must run through everything we do. We must learn from our historical mistakes. Prior economic transformations have not brought everyone along, to the detriment of economic growth and innovation. . . .
So, this is our five-pillar strategy.
To conclude, I want to make a final point: this strategy—and indeed all of President Biden’s economic agenda—rests on the belief that American capitalism and American democracy can deliver for our people and our future. At this moment, the stakes could not be higher. We need to demonstrate that American capitalism can work to benefit everyone, not just shareholders. That smart public investment can help unleash innovation and deliver strong, resilient, inclusive growth.
And we must show that our democratic system of government can serve working people—better than any other form of government. We are off to a strong start—but we have a lot of work to do. And no time to lose. As the president has said, years from now our children will look back at this time as the moment when America had the chance to win the twenty-first century. Let’s seize this moment, together.