NSF’s Technology Innovation Partnership Should Offer Grants for Universities to Establish Industrial Policy Programs

With the rise of stiff industrial competition from China in the technologies and industries at the heart of the modern economy, the United States needs a coherent policy strategy to ensure its advanced industrial base does not hollow out even more than it already has.

Yet while most civil servants and political appointees in the U.S. defense, intelligence, and foreign policy establishments have deep backgrounds and extensive knowledge in their respective disciplines—most having attended leading universities with specialized programs in these areas, before continuing their educations at leading institutions—there is no equivalent field of study, nor are there professional circles that could be called an “economic war” establishment. No U.S. universities teach economic war fighting as either theory or an applied practice. In fact, they teach that it’s bad to fight economically. As a result, the United States is essentially defenseless against the kind of mercantilist aggression it now faces from China. Congress should respond by funding university programs and career training programs that focus on economic warfighting, which is distinct from learning about foreign affairs, economics, or military affairs.

The skill set required to analyze and articulate the public policies the country needs to prevail in the struggle for competitive advantage in strategically important industries would include advanced studies in the following fields:

1. economics, including international economics, macro-economics, regional economics, and industrial organization economics;
2. business administration, including business strategy, management, international business, R&D management, and entrepreneurship; and
3. public policy and political science, including political theory, international relations, and public administration.

In addition, competent graduates should understand:

1. how to assess the competitive position of industries, including what data are available and how to use data analytical tools;
2. national innovation systems theory and analysis;
3. understanding of core technology areas, including various branches of engineering and science; and finally
4. how micro, macro, meso, sectoral, and technology policies affect industry productivity, competitiveness, and innovation.

A student might be able to pick up some of this knowledge if a university program allowed them to take classes in various disciplines, but even then, there would likely be major gaps. They certainly wouldn’t become competent in industrial policy if they were in a standard economics department because economics focuses on markets, not industry. Business administration departments get closer because they focus on the real world of firm behavior, but while that is valuable, it is still too narrow. It doesn’t allow depth in industry analysis nor an understanding of the nexus between public policy, firms, and industries. Some urban and regional planning and public policy programs get closer, particularly ones that integrate with engineering schools. But even there, the focus is usually on science and technology policy as opposed to industrial policy.

As such, given lawmakers’ intent for the new NSF Technology Innovation Partnership program was to play a more central role in supporting advanced industry development, TIP should offer a modest grant to several universities that come up with the best proposals to establish a master’s program in industrial policy. There is less need for this concept at the Ph.D. level, because doctoral students often have the flexibility to focus more intensely on this area of research.

And while developing several such master’s programs would be useful, there is also a need to train federal employees in economic warfighting. Few federal employees involved in industrial policy have had formal training in all the related disciplines. While the Eisenhower School of National Security and Resource Strategy offers some courses that touch on the requisite topics, additional efforts are needed to ensure more federal employees can gain the education and skills they need to effectively practice advanced industry policy and implementation.