The US Innovation and Competition Act, which sailed through the Senate on Tuesday [June 8, 2021], seeks to strengthen cutting-edge American technologies, manufacturing, and — the reason for this rare bipartisan enthusiasm — competitiveness against China. The bill calls for spending a quarter of a trillion dollars on these problems, a huge increase over paltry earlier efforts. But from observing technology industries, I know that if the United States is really going to rejuvenate its high-tech manufacturing, Congress will have to ensure this bill strengthens countless small and medium-sized firms you've never heard of and doesn't just throw money at major companies. To better understand why, I reached out to Suzanne Berger, an MIT political scientist and Institute Professor I studied with in the 1990s. Berger has led several efforts to examine the decline of American manufacturing, including MIT's Production in the Innovation Economy project and part of the Work of the Future task force.
Jonathan Schlefer is a senior researcher in political economy at Harvard Business School and the author of “The Assumptions Economists Make.”