A New Approach to Industrial Policy?

Speakers: Dr. Robert Atkinson (Information Technology and Innovation Foundation); and John Thornhill (The Financial Times)

Date: 27 May 2021

Speaker Session Summary

SMA hosted its first debate between Dr. Robert Atkinson (President, Information Technology and Innovation Foundation) and Mr. John Thornhill (Innovation Editor, The Financial Times) as a part of its SMA NDU Innovation Speaker Series.

Dr. Atkinson argued that the US needs an industrial policy because it is already deep in economic and technological competition with countries around the world, including China. Because the USG is aware of this economic and technological competition, it already has an industrial policy, even if not explicit. Industrial policies can fit along a spectrum from a true laissez-faire approach to an economy that is strictly controlled by a central government. Dr. Atkinson argued that the industrial policy he supports is not an economy run directly by the central government, which picks winners and losers. Instead, he advocated in favor of supporting strategic industries with increased federal funding to better compete with US rivals abroad for the global market share. This funding will also help companies in the private sector maximize their societal returns, which are 40 percent of what they should be, according to Dr. Atkinson.

Mr. Thornhill argued against US adoption of a robust industrial policy. He first provided an antidote of two USSR textile factories: one of which was constructed to produce tiles and the other of which was created to destroy subpar textiles. The need to create faulty textiles to keep the second factory running is an example of a non-market incentive that a government-run economic policy can create. He argued that a robust US industrial policy may focus on the wrong incentives. As a result, the United States’ free market could become less free, and kill zones surrounding the US’s largest companies could expand, which would in turn lead to less competition. Mr. Thornhill argued that instead of an industrial policy, the US needs a robust anti-trust policy that keeps its markets competitive and keeps its educational institutions minimally influenced by the USG. By maintaining its educational system, the US will continue to attract top talent from other countries as well.

Both Dr. Atkinson and Mr. Thornhill mentioned in their rebuttals and closing statements that they agreed on several points, including that an industrial policy that gives the USG a large amount of power would not benefit the nation.Dr. Atkinson emphasized that the type of industrial policy he is an advocate for would support strategic industries in the US and not determine winners or losers. However, Mr. Thornhill emphasized that implementing a true industrial policy at the state level may stifle innovation, which he believes is a process of natural selection. 

Speaker Session Recording

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Briefing Materials

Biographies:

Robert D. Atkinson As founder and president of the Information Technology and Innovation Foundation (ITIF), recognized as the world’s top think tank for science and technology policy, Robert D. Atkinson leads a prolific team of policy analysts and fellows that is successfully shaping the debate and setting the agenda on a host of critical issues at the intersection of technological innovation and public policy.

He is an internationally recognized scholar and a widely published author whom The New Republic has named one of the “three most important thinkers about innovation,” Washingtonian Magazine has called a “tech titan,” Government Technology Magazine has judged to be one of the 25 top “doers, dreamers and drivers of information technology,” and the Wharton Business School has given the “Wharton Infosys Business Transformation Award.”

A sought-after speaker and valued adviser to policymakers around the world, Atkinson’s books include Big is Beautiful: Debunking the Mythology of Small Business (MIT Press, 2018); Innovation Economics: The Race for Global Advantage (Yale, 2012), Supply-Side Follies: Why Conservative Economics Fails, Liberal Economics Falters, and Innovation Economics is the Answer (Rowman & Littlefield, 2006), and The Past And Future Of America’s Economy: Long Waves Of Innovation That Power Cycles Of Growth (Edward Elgar, 2005). He also has conducted groundbreaking research projects and authored hundreds of articles and reports on technology and innovation-related topics ranging from tax policy to advanced manufacturing, productivity, and global competitiveness. He has testified before the United States Congress more than 30 times.

President Clinton appointed Atkinson to the Commission on Workers, Communities, and Economic Change in the New Economy; the Bush administration appointed him chair of the congressionally created National Surface Transportation Infrastructure Financing Commission; the Obama administration appointed him to the National Innovation and Competitiveness Strategy Advisory Board; and the Trump administration appointed him to the G7 Global Partnership on Artificial Intelligence. Atkinson serves on the UK government’s Place Advisory Group to advise the Minister for Science, Research and Innovation on how policy can drive innovation in more regions. He is a founding member of the Polaris Council, a body of cross-sectoral, interdisciplinary science and technology policy experts who advise the U.S. Government Accountability Office’s Science, Technology Assessment, and Analytics (STAA) team on emergent and emerging issues facing the Congress and the nation. He also has served as co-chair of the White House Office of Science and Technology Policy’s China-U.S. Innovation Policy Experts Group; as a member of the U.S. Department of Commerce’s National Advisory Council on Innovation and Entrepreneurship; and on the U.S. State Department’s Advisory Committee on International Communications and Information.

Atkinson is a member of the Markle Foundation Task Force on National Security in the Information Age and serves on the boards or advisory councils of the Internet Education Foundation, the NetChoice Coalition, the University of Oregon’s Institute for Policy Research and Innovation, and the State Science and Technology Institute. Additionally, Atkinson is on the editorial boards of the Journal of Electronic Government and the Journal of Internet Policy; a member of the Global Innovation Forum Brain Trust; a nonresident senior fellow at the Brookings Institution; a fellow at the Columbia University Institute of Tele-Information; a fellow of Glocom, a Tokyo-based research institute; and a member of the Polaris Council, an advisory group to the U.S. Government Accountability Office’s Science, Technology Assessment, and Analytics team.

Atkinson was previously vice president of the Progressive Policy Institute, where he directed the Technology & New Economy Project. He wrote numerous research reports on technology and innovation policy, covering issues such as broadband telecommunications, e-commerce, e-government, privacy, copyright, R&D tax policy, offshoring, and innovation economics.

Previously, Atkinson served as the first executive director of the Rhode Island Economic Policy Council (RIEPC), a public-private partnership whose members included the state’s governor, legislative leaders, and both corporate and labor leaders. As head of RIEPC, Atkinson was responsible for drafting a comprehensive economic development strategy for the state and working with the legislature and executive branch of government to successfully implement each element of a 10-point action agenda.

Prior to his service in Rhode Island, Atkinson was a project director at the Congressional Office of Technology Assessment, where, among other projects, he spearheaded The Technological Reshaping of Metropolitan America, a seminal report examining the impact of the information technology revolution on America’s urban areas.

As a respected policy expert and commentator, Atkinson has testified numerous times before the U.S. Senate and House of Representatives, and he appears frequently on news and public affairs programs. Among others, these appearances have included interviews on BBC, CNBC, CNN, Fox News, MSNBC, NPR, and NBC Nightly News.

Atkinson holds a Ph.D. in city and regional planning from the University of North Carolina, Chapel Hill, where he was awarded the prestigious Joseph E. Pogue Fellowship. He earned his master’s degree in urban and regional planning from the University of Oregon, which named him a distinguished alumnus in 2014.

John Thornhill is the Innovation Editor at the Financial Times writing a weekly column on the impact of technology. He is also the founder and editorial director of Sifted, the FT-backed site for European startups, and founder of FT Forums, which hosts monthly meetings for senior executives.

John was previously deputy editor and news editor of the FT in London. He has also been Europe editor, Paris bureau chief, Asia editor, Moscow correspondent and Lex columnist.

The SMA NDU Innovation Speaker Series description and list of the other sessions in this series can be downloaded here.