William Henagan and Robert Obayda, directors at the NSC, share their expertise on the intersection of industrial policy and national security. They discuss the strategic collaboration between Canada, Finland, and the U.S. on icebreakers, emphasizing their critical role in the Arctic. The conversation touches on why cranes are vital for national security and the significance of positive incentives in American industrial policy. They also explore the geopolitical implications of the global shipbuilding industry, highlighting the need for cooperative approaches to maintain competitive advantage.
The U.S. industrial policy under President Biden aims to align economic growth with national security by strategically investing in key sectors.
Cranes are critical to the global supply chain, highlighting concerns over reliance on foreign manufacturers like China for production.
Collaboration among the U.S., Canada, and Finland on icebreaker initiatives emphasizes joint technological development to enhance maritime operations and national security.
Deep dives
Industrial Policy and National Security
The modern industrial policy under President Biden seeks to align economic growth with national security interests by strategically investing in key sectors. This policy addresses the past misconception that market force distributions alone can efficiently allocate resources, which has led to a decline in crucial domestic industries. One assumption is that all growth is beneficial, which has resulted in an over-concentration of production capabilities in certain sectors overseas, especially in the face of competition from nations like China. The strategy now includes identifying foundational sectors essential for both economic development and national security, where cost-effective private sector investment is currently lacking.
Cranes in the Supply Chain
Cranes play a vital role in the global supply chain, responsible for moving vast quantities of goods through shipping ports. The substantial market concentration in crane production, particularly by companies in China, raised concerns about resiliency in supply chains and dependence on foreign manufacturers. The introduction of economic policies aims to encourage domestic production through regulatory incentives and financial support, shifting focus to American manufacturers while collaborating with allied countries. These efforts will help strengthen the supply chain and provide trusted alternatives to foreign products that may pose risks.
The Strategic Importance of Icebreakers
Icebreakers serve a crucial function in maintaining shipping routes, particularly as climate change reduces ice thickness in polar regions. The U.S. serves nearly 0.2% of the global shipbuilding market, a stark contrast to countries like China that dominate with a significant share. This underlines the need to reinvigorate American shipbuilding capabilities, especially for specialized vessels like icebreakers which require advanced manufacturing skills. Collaborative initiatives with allies, such as Canada and Finland, have emerged to share expertise and technology, aiming to secure a steady presence in high-latitude regions while countering adversarial influences.
Collaborative Defense Industrial Policies
The shift toward industrial policies involves a communal effort among the U.S., Canada, and Finland, focusing on joint technological development and defense capabilities. This collaboration is structured to facilitate an environment where allied nations can optimize their maritime operations while boosting their respective economies. Unlike China's competitive approach focused solely on national gains, the U.S. model aims at strengthening partnerships to ensure that all parties benefit from investments in defense capabilities and national security. This initiative also signals to adversaries the resolve to maintain international norms in the face of emerging threats.
Institutionalizing Industrial Strategy
The podcast emphasizes the necessity of institutionalizing a coherent industrial policy approach that combines both incentive-driven methods and traditional regulatory tools. It highlights a call for a dedicated body within the National Security Council to attract industry experts who can navigate the complex landscape of economics and private sector relations effectively. The need for a collaborative mindset across government agencies is crucial, allowing for a more streamlined execution of these policies to benefit national interests. As changes within the government take time, a sustained commitment is essential to cultivate an environment supportive of innovation within the industrial sector.
