SIPA Conference Examines US and International Industrial Policy in 2024
Industrial policy is back—but how can it be better? The two-day academic conference hosted by Columbia SIPA and the Institute of Global Politics (IGP), New Thinking in Industrial Policy: Perspectives from Developed and Developing Countries, centered on this fundamental question. Convened by IGP Faculty Advisory Board member, Nobel laureate, and SIPA economics professor Joseph E. Stiglitz, and SIPA economics professor, IGP Affiliated Faculty member and codirector of the Center for Development Economics and Policy Eric Verhoogen, on November 1 and 2, the conference brought together 25 speakers and over 100 distinguished scholars and policymakers to share their papers and latest research on the role of industrial policy in the United States and around the globe.
In her opening keynote, Alondra Nelson, the Harold F. Linder Professor at the Institute for Advanced Study and former acting director of the Office of Science and Technology Policy (OSTP) in the White House, emphasized that modern industrial policy’s goal was to fill a funding gap on issues that private investment did not fully cover, such as early stage scientific research, climate technology, and vaccines for rare diseases.
She outlined the Biden administration’s notable successes: setting up the Advanced Research Projects Agency for Health (ARPA-H) and driving drug development and cancer diagnosis. She also touted the Inflation Reduction Act (IRA), whose far-reaching effects combined investment in electronic vehicles with reduced insulin costs, and the CHIPS and Science Act, which aimed to push technology and innovation hubs in underserved regions of the country. The overarching aim was to “create new markets that don’t exist yet, and do social good,” what she termed a “value proposition and values proposition for an enhanced and enriched society.”
The conference continued with panels on industrial policy lessons learned in the US and abroad, followed by lively discussion. Christopher Snyder, the Joel Z. and Susan Hyatt Professor of Economics at Dartmouth University, examined the role of Operation Warp Speed in accelerating the development of a COVID-19 vaccine and whether it could serve as a model for future innovation projects. Acknowledging the massive investment, he believed that cases of immense urgency and no comparable commercial investment justified the cost. He also identified tactics that helped facilitate the speedy and successful vaccine distribution, such as the portfolio approach.
Internationally, industrial policy has long played a prominent role in developing nations, but it is struggling in Europe. Tobias Wuttke, a postdoctoral researcher at Bard College Berlin, discussed the challenges faced by the European Union with its approach to spurring the green transition, known as Important Projects of Common European Interest (IPCEI). The rules governing investments by the European Union are so restrictive that they can sometimes constrain innovation rather than promote it. By contrast, in developing countries, Gale Raj-Reichert, Professor of Politics at Bard College Berlin, illustrated how Malaysia had used tax incentives to spur the production of semiconductors. Philipp Barteska, postdoctoral fellow at Harvard Kennedy School, quantified the effect of experienced South Korean bureaucrats in the Korean Trade-Investment Promotion Agency (KOTRA) on stimulating trade, creating what he termed Korea’s “export miracle” after the 1960s.
In a second keynote, Dani Rodrik, Ford Foundation Professor of International Political Economy at the Harvard Kennedy School, celebrated the academic re-evaluation of industrial policy as central to producing structural change in countries. Rodrik, who also serves as codirector of Kennedy’s Reimagining the Economy Program, noted that each panel acknowledged historical antecedents in the US – the Manhattan Project, NASA, IN-Q-TEL – driven by World War II and the Cold War. He demonstrated that the driving forces behind the global shift in industrial policy are similar geopolitics, strategic competition with China, and climate change.
The full program and papers can be found here.
Watch the full conference:
