The US Needs a Techno-Industrial Strategy

By: Liza Tobin & Addis Goldman (Project Syndicate)

In the aftermath of the Great Recession of 2008-09, there was widespread belief that China’s economy would surpass that of the United States by 2030. However, China is now grappling with various crises that threaten its economic “miracle.” To regain momentum and bolster its strategic position, China is shifting its focus from real estate to advanced industries as the primary growth engine. The US response will play a crucial role in determining the outcome of the strategic competition between the two nations and the future of the global economy.

The US economy remains vibrant, as evidenced by its swift recovery from the COVID-19 shock. A key factor behind this resilience is US leadership in artificial intelligence, which is already generating economic value across various industries and holds potential for significant productivity gains. With substantial investments in cloud infrastructure by US technology companies, the American innovation ecosystem is poised to benefit from enterprise-scale AI capabilities. As 2030 nears, these advancements could drive innovation in “deep-tech” sectors such as robotics and biotechnology.

Despite its strengths, the US economy has a significant shortfall: insufficient production capacity in advanced industries like semiconductors and clean energy, which are vital for economic competitiveness and national security. Since 1980, the US share of global high-tech goods manufacturing has plummeted from over 40% to just 18%.

While the US has experienced deindustrialization, China has risen as the world’s manufacturing superpower, transitioning from dominance in textiles and toys to leadership in advanced technologies like networking components, electrical equipment, and machine tools. China now produces more than half of the world’s electric vehicles and is projected to control over 80% of global solar-cell manufacturing capacity through 2026…

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