Economists, industry leaders, and policymakers explored the current debates over industrial policy—the strategies a government takes to stimulate economic growth through tools like subsidies, tax incentives, or trade barriers—and its relationship with economic security at a recent campus convening.
The conference, hosted by the Mossavar-Rahmani Center for Business and Government (M-RCBG), ranged from lessons from past industrial policy decisions to questions about Chinese-U.S. competition, what national security aims might be at stake and more. The activities kicked off on Tuesday evening with a John F. Kennedy Jr. Forum on industrial policy and security with former United States Secretary of Commerce Gina Raimondo and Lawrence Summers, M-RCBG faculty director and Charles W. Eliot University Professor.
On Wednesday, policymakers, industry leaders, and academics joined Summers, M-RCBG center co-director John Haigh and Chris Miller, a professor from Tufts’ Fletcher School and author of “Chip War: The Fight for the World's Most Critical Technology,” for a full day of public panel discussions. Issues related to industrial policy, Miller explained, are “much in the news, but poorly understood” and emphasized that economics and security goals are intrinsically linked.
Catch some takeaways from the speakers below—or watch the panels.
The telecom industry, semiconductors, and aviation
Experts from academia, government, and industry talked through the pros and cons of industrial policy in big industries including telecommunications, semiconductors, and aviation, as moderated by John Haigh and focusing on the role of government in supporting national champions, particularly failing ones.
Jonathan Pelson, author of “Wireless Wars: China's Dangerous Domination of 5G and How We're Fighting Back” argued that China’s industrial policy is more akin to “national security by other means” than trade. “Any discussion of industrial or economic policy needs to be held in the context that accounts for the difference between business and war, between industrial policy and national security,” Pelson said. He described industrial policy as a security strategy since countries are using it to achieve geopolitical means and used the telecom industry as an example.
Mike Schmidt, former director of the CHIPS Program Office, talked about U.S. manufacturing and the CHIPS and Science Act, which invested in the research and manufacturing of semiconductors. Schmidt argued that the United States should sustain demand for at least two related manufacturing ecosystems and “sustain and grow leading process technology in the United States.”
And Richard Aboulafia, a professional from the aviation industry, discussed innovation and policy in his industry, saying Boeing has “stumbled” in the past few years, but is doing fine attracting capital. He said, “everything that made this industry great depends upon multilateral treaties and institutions.”
China’s electric vehicle success
Experts discussed China’s electric vehicle (EV) policy evolution, which has led to significant and rapid market growth in the last 15 years, as Kelly Sims Gallagher, dean of the Fletcher School, reflected.
Ilaria Mazzocco, an expert from the Center for Strategic and International Studies, discussed how China’s “comprehensive, industrywide approach”—and its ability to scale—rapidly made it dominant in EV production.
Elaine Buckberg, a senior fellow at Harvard’s Salata Institute for Climate and Sustainability, and a former chief economist for General Motors, said “it’s tough being in auto,” citing supply chain issues and other challenges. The international playing field, she said, is dominated by China, which is “pervasively involved” in its EV industry and has developed a monopoly position.
Kristin Vekasi, a professor from the University of Montana, discussed EV supply chains and China’s dominance in the rare earth minerals that are essential for these chains. “China does control a lot of mining in many of these minerals,” she said, as well as the processing, and Chinese restrictions on exports of these minerals gives the country significant power in the automotive industry.
Lessons from U.S. government economists
Miller spoke with Brian Deese, former director of the National Economic Council in the Biden administration, about insights from his time in government dealing with industrial policy and the automotive industry. Deese talked about an environmental objective to decarbonize the transportation sector as well as a security objective to secure battery- and electrical-related supply chains—and addressed criticism of “everything bagel liberalism,” a term coined by writer Ezra Klein to describe progressive liberalism’s tendency to overburden projects with requirements and goals.
Former World Bank president Robert Zoellick, who held a range of senior positions in the George W. Bush administration—as well as the George H. W. Bush and Reagan administrations—discussed the history of industrial policy and drew on his own experiences. Zoellick, a senior fellow at the Belfer Center for Science and International Affairs, argued not for industrial policy but for other economic approaches, including sound macro policies, a broad-based tax system, support for science and basic R&D, immigration with secure borders, strong infrastructure, the removal of regulatory barriers, and the reduction of trade barriers.
Zoellick also cautioned against overreach of executive power and the possibility of corruption. “When you enhance the executive power of the presidency over and over and over again,” he said, “it’s a very dangerous thing for the system.”
Artificial intelligence and industrial policy
In a session moderated by Jason Furman, the Aetna Professor of the Practice of Economic Policy at HKS, experts on AI looked ahead to what may be on the horizon. Dan Wang, author of “Breakneck: China’s Quest to Engineer the Future,” and Jeff Ding, the author of “Technology and the Rise of Great Powers: How Diffusion Shapes Economic Competition,” discussed what the AI revolution may mean for artificial intelligence.
Wang stressed that the United States is currently leading in AI, but China is “catching up in some pretty substantial ways,” especially with its DeepSeek model. The pursuit of AGI—artificial general intelligence—might also allow China to boost its manufacturing power even further, Wang said.
Ding, too, focused on U.S.-China competition, and on economic productivity as a goal for industrial policy. He argued that AI, as a general-purpose tool—akin to electricity—offers a lot for industrial policy writ large as it can undergird many different technologies.
“In order to get to comfort in terms of our national security and our long-term economic competitiveness, you need a vibrant manufacturing ecosystem, and you need a vibrant ecosystem in innovation.”
National security and innovation
Jake Sullivan, former U.S. national security advisor to President Biden and the Kissinger Professor of the Practice of Statecraft and World Order at HKS, spoke with Summers about innovation in the United States. Sullivan said the primary driver of government investment in specific sectors is tied to “basic national security demands” but that “we shouldn’t lose sight of, at the end of the day, whether we are improving the lives of working people in this country as well.”
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Banner photograph by Bethany Versoy; inline images by Photo by AFP/China OUT/Getty Images; imaginima/iStock; Victoria Groves-Cardillo