Going, Going, Gone? To Stay Competitive in Biopharmaceuticals, America Must Learn From Its Semiconductor Mistakes



Stephen Ezell | Information Technology & Innovation Foundation

U.S. leadership in advanced-technology industries is never guaranteed. America once held dominant market shares in a long list of industries—including consumer electronics, machine tools and robotics, telecommunications equipment, and solar panels—only to see those leads significantly erode, and in some cases evaporate entirely. And because process and product innovation are so often joined at the hip, losing production capacity to overseas competitors often leads to loss of U.S. innovation capacity. Some contend it’s acceptable to cede leadership in innovation industries because America will just create new ones. But intensifying global competition, notably from China, now makes such indifference untenable.

America’s loss of semiconductor manufacturing capacity (which has fallen from 37 to 12 percent of global production over the past three decades) and its lag in cutting-edge chip development both are due in significant part to policy inattentiveness. This should serve as a warning for policymakers: Failing to maintain a policy environment that nurtures both innovation and domestic production capability risks sacrificing U.S. leadership in other advanced-technology industries, such as biopharmaceuticals.


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