President-elect Joe Biden won the US election in part by running on an ambitious climate platform promising to invest heavily to avert climate catastrophe while creating millions of well-paying jobs. But the question of how Biden's proposed nearly $2 trillion in green investment will get spent, and what other measures the government will take to put the green economy on the fast track, is still up for debate. Some politicians are now championing industrial policy as the way forward. Under industrial policy, the government makes investments that the private sector is unwilling or unable to make, and which will help the country achieve certain socially desirable goals. In short, industrial policy is a form of government planning to create or support strategic industries.
Manufacturers face a difficult task juggling the current "innovation agenda." Today, the Industrial Internet of Things (IIoT), robotic automation and artificial intelligence (AI) are all poised to be the next big thing. But those on front line of manufacturing are cautious to embrace innovation--and rightly so. Too often expectations are unfulfilled, capital investments are made in vain, and experimentation doesn't translate positively into profits. Instead, many enterprises take a wait-and-see approach.
That term has changed over the years. As we enter the Fourth Industrial Revolution, analysts and researchers are categorizing the future technologies that will change our lives. I've grouped these categories together, and they include: "The best way to predict the future is to invent it." For those of you unfamiliar with my work, I write frequently about Fourth Industrial Revolution (#4IR) themes such as Tech Innovation, Agtech, and Industrial Disruption. If I had to pick one area I find most exciting, most potentially disruptive and thus the best opportunity for return on investment, it would be A.I.
Despite healthy corporate earnings, an employment rate that has slowly rebounded since the financial crisis of 2008, and the outpouring of high-tech distractions from Silicon Valley, many people have an aching sense that there is something deeply wrong with the economy. Slow productivity growth is stunting their financial opportunities; high levels of income inequality in the United States and Europe are fueling public outrage and frustration in those left behind, leading to unprecedentedly angry politics; and yet despite the obvious symptoms, economists and other policy makers have been largely befuddled in explaining the causes and, even more important, the cures for these problems. A series of essays by authors including Joseph Stiglitz, an economist at Columbia University who won a Nobel Prize in 2001, and Mariana Mazzucato, a professor of the economics of innovation at the University of Sussex and a rising voice in British politics, the book attempts to provide, as explained in its introduction, "a much better understanding of how modern capitalism works--and why in key ways it now doesn't." Together, the essays provide a compelling argument that we need more coherent and deliberate strategic planning in tackling our economic problems, especially in finding more effective ways to reduce greenhouse-gas emissions. In particular, Mazzucato, who also co-edited the book and co-wrote an introduction with Michael Jacobs, wants to counter the view that free markets inevitably lead to desirable outcomes and that freer markets are always better: the faith that "the'invisible hand' of the market knows best."
The prime minister is to unveil a new, more interventionist, industrial strategy on Monday, designed to boost the post-Brexit UK economy. The government will be "stepping up to a new, active role," Mrs May said. She will launch the new strategy at her first regional cabinet meeting, to be held in the north-west of England. Business leaders welcomed the plan which will focus on "sector deals" in areas such as life sciences and low emission vehicles. A green paper will set out ways the government can provide support to businesses by addressing regulatory barriers, agreeing trade deals and helping to establish institutions that encourage innovation and skills development.