ITIF Calls for New Federal Agency to Help America Compete With China in Advanced Industries and Technologies

June 17, 2021

WASHINGTON—To compete effectively with China, the United States must develop and implement a national advanced industry and technology strategy that is explicitly focused on the commercial competitiveness of select sectors that are most critical to the economy—and the U.S. government needs a new, free-standing agency that is solely dedicated to carrying out that mission, according to a new report released today by the Information Technology and Innovation Foundation (ITIF), the leading think tank for science and technology policy. 

Legislation recently passed in the U.S. Senate is an important step forward in shoring up innovation-based competitiveness, but it is not clear that the House will support a strong NSF technology directorate, in part due to the university community opposing it. ITIF argues that the scale and scope of America’s competitiveness challenge demands a standalone advanced industry and technology agency with a budget equal to that of NSF itself.

“There are many steps Congress and the administration should take to compete against China, but the best way to completely change the game would be to create a specialized agency with a focused mission and sufficient resources to bolster the competitive position of advanced technology industries,” said ITIF President Robert D. Atkinson, who authored the report. “More than 50 other countries have national technology agencies that support specific industries and technologies. Creating one in the United States will require overcoming deep ideological divides in Congress and interest-based opposition from the scientific community. The White House and the business community will need to spend political capital to make it possible.” 

ITIF’s report calls for creating a National Advanced Industry and Technology Industry Agency (NAITA) the same size as NSF to analyze U.S. industry strengths, weaknesses, opportunities, and threats, and to respond with well-resourced solutions ranging from support for domestic R&D to production partnerships and investment in advanced research facilities. 

ITIF recommends structuring the new agency with five divisions: 

  1. data and analysis division to understand the U.S. competitive position vis-à-vis other nations on key technologies and industries, as well as key strengths and weaknesses and where specific policies are needed. 
  2. An advanced industries division, which would focus on boosting the overall competitive position of the United States and key industries, with programs to reshore production, strengthen cooperative ventures in areas such as R&D and skills training, establish industry-focused federal labs, demonstrate new technologies, and lead in global standards-setting.
  3. An emerging technologies division, which would scan and assess important emerging technologies; identify what other nations, including adversaries such as China, are doing in these spaces; assess overall U.S. efforts to support the technologies; and, where necessary, fund R&D in them. 
  4. An innovation systems division, which would develop core competencies in key systems for sectors such as health care, transportation, and finance, and work with stakeholders to better understand policy interventions to boost innovation in the entire system. 
  5. A division focused on cross-agency and cross-government coordination to facilitate a whole-of-governments approach to the competitiveness challenge, aligning the efforts of federal agencies, states, and allied nations.

ITIF argues that no other agency is equipped to tackle the tasks that NAITA should take on. NSF plays a key role in advancing basic science, but it doesn’t support technological innovation. Meanwhile, departments such as Defense and Energy focus on industries related to their missions. 

“After 9/11, Congress recognized that the threat of global terrorism was severe enough that the United States needed to create the Department of Homeland Security. Today, the competitive threat from China requires that we create a dedicated agency to make sure the United States maintains its leadership in critical technology areas,” said Atkinson. “Policymakers need to recognize that free markets and limited government are no longer recipes for success and the emerging anti-corporate ideology from the left is just as damaging. We need a concerted approach to bolstering U.S. competitiveness in advanced industries, because it will be much more difficult to achieve other societal goals if America is a weakened power economically, technologically, and militarily.”

Read the report