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Four steps for a bipartisan effort to outcompete China

November 19, 2020

While economic development tends to be nonpartisan at the state level, many states are limited in their ability to fund innovative programs. In order to fund efforts that may serve as part of a national development strategy, Congress should use the bipartisan support of state efforts to establish and expand federal-state development partnerships and a strategy focused on countering China’s rise in advanced industries. That is the sentiment behind a recent roadmap from the Information Technology & Innovation Foundation (ITIF) that proposes four things Congress should do to align state efforts to an overall mission of outcompeting China.

ITIF argues that a federal-state partnership is necessary to help fund programs at the state level while approximating a national development strategy. It also proposes that the federal government cannot be expected to solely fund the programs and that state funding is needed to ensure optimal project selection. Finally, ITIF notes that a shared goal of establishing a robust advanced technology strategy to counter China will enable states to be partners on the end goal instead of adversaries that try to attract development to their own localities.

“Given the national priority of strengthening traded-sector, advanced industries nationwide, states need to be partners in this,” writes ITIF President Robert Atkinson in the report. “This means that if Washington is going to help support subnational efforts, it gets to help align state and local actions to national goals.”

The four bipartisan steps outlined in the report that could be undertaken to forge the federal-state partnership are:

  1. Establish a grant program for states to attract Foreign Direct Investment or reshoring (or retaining) advanced technology production to the United States.
  2. Significantly expand the Regional Innovation Strategies program to at least $500 million per year.
  3. Expand NIST’s Manufacturing Extension Program to at least $600 million and charge it with focusing more on helping U.S. manufacturers adopt “smart manufacturing systems.”
  4. Expand support to communities for manufacturing initiatives.

The full report is available here.

china, economic development, innovation