Why the New Administration Needs Federal Industrial Strategists

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Smart strategy will require smart strategists who know the government’s policy levers and the technology innovation process. 

As President-elect Joe Biden makes plans for his presidency he is likely to be reminded of the well-worn observation that “personnel is policy.” While this is usually understood in the context of senior appointments, it is also a reminder that the federal government's ability to make things happen fundamentally depends on the skills and knowledge of its workforce. 

One aspect of the new president’s agenda with implications for that workforce is his apparent willingness to adopt a more active industrial strategy. By that, I mean using government policy to steer the economy to help achieve specific policy goals rather than simply leaving its direction to chance—something that has recently been politically taboo in the United States. Put simply: New strategy will demand new strategists.  

The policy shift is a sensible one: With China rapidly emerging as a tech rival and that rivalry having implications for both the U.S.’s national security and global economic competitiveness, past assumptions that the free market will always work in favor of the United States’ national interest are being re-examined. And that is before we consider efforts to manage climate change or ensure pandemic resilience. If the Republicans retain control of the Senate, it is possible that Biden may not be able to realize the significant increases in spending on research and development and procurement-driven investments in emerging and critical industries envisaged in his “Build Back Better” campaign platform. Nevertheless, the challenges are not going away and, arguably, the fewer resources that are available, the smarter the strategy will need to be. 

It follows that smart strategy will require smart strategists: in this case, people trained to make use of the policy levers available to the U.S. government, knowledgeable about the underlying technology and with an understanding and appreciation of the complexities of the innovation process. 

As I have argued in a recent brief for the German Marshall Fund’s #Tech2021 project, developing this cohort of strategists will be a generational project. But the sooner that we start growing the talent pool, the better. As the #Tech2021 brief sets out, there are four actions that ought to be taken as soon as possible, ideally as part of a wider commitment to the future of U.S. industry: first, Biden needs to embrace the vision of a group of leaders that have knowledge of—and talent for— three disparate disciplines: (1) an understanding of the government levers (e.g., labs, direct spending, tax incentives, contracting/buying, demonstration projects, regulation and deregulation) that can spur innovation; (2) an appreciation for the new and emerging technologies that will define global power in the 21st century, and the conditions required for the U.S. to grow the industries to develop them; and (3) an aptitude for global strategic competition. Second, the president should designate an empowered leader in the White House with a small staff to make that happen. Third, that team should work with the rest of the government to build a plan to make the vision a reality.  And fourth, that effort should involve leveraging the federal government’s existing training and development—including the military capacity to develop strategic thinking—to help nurture this cohort into maturity.

Let me be clear: I am not proposing laying the groundwork for the United States to shift to some kind of command economy. One of the underlying strengths of the United States, and one that has been fundamental to its global leadership over the past century, has been the vibrance, talent and ambition of its private companies. Rather, as part of a wider realization that government must be willing to play a more active role in the innovation process, we need to ensure that the federal government is staffed by people who are best-prepared to calibrate where government should engage—and at what point it can and should step aside and let the private sector do its thing. If we are going to make a return to the public-private partnerships that underpinned U.S. global leadership after the Second World War and the Cold War—that gave us such innovations as the semiconductor and the Internet—we need to invest in the leadership to deliver that.  

Just as we seek to train our military leaders to combine the subject-matter expertise with the strategic judgment that we need for them to guide our military competition with our adversaries, so we ought to be identifying, training and supporting the leaders who will be leading the government’s contribution to our technology and economic competition. The sooner we start on that path, the better. 

Ian Wallace is a senior fellow with the German Marshall Fund's Digital Innovation and Democracy Initiative and, prior to becoming a U.S. citizen, was the Defense Policy & Nuclear Weapons Counsellor at the British Embassy in Washington, D.C.

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