Leader of the pack

For the US, it is always do as I say, not do as I do

The diffusion of technical progress is not homogeneous. Some countries lead technological advancement, while others do not yet have the means to master and develop new technologies. Additionally, those countries already established as leaders in technology have created mechanisms to prevent the emergence of new competitors by selectively controlling access to their most advanced technologies. This strategy was denounced by German economist Friedrich List in the 19th century, who described it as "kicking away the ladder". This concept was taken up in a book with the same name by the Korean economist Ha-Joon Chang in 2002.

In the context of international relations, science and technology assume essential importance, as they are the basis for productive development, food production, defense capacity, the creation of new medicines and the financial structure of a country, etc. The more advanced science and technology a country has, the more developed a nation is and the greater the say it has in international affairs.

In this context, developing countries have sought to industrialize through public policies, such as economic planning, protection for local companies and industrial policies to support development. However, those countries dominating the international economic debate criticize these policies, saying that state intervention distorts the economy, blocks free trade, and creates so-called crony capitalism, and industrial policies that go against the principles of free competition.

The country that most criticizes developing countries' adoption of industrial policies is the United States. The US government also sanctions countries and companies that organize national strategies. This can clearly be seen from a historical perspective. It is worth citing the attitude of the US to the Japanese industrialization strategy in the 1980s, as shown by a report published by Fortune Magazine in Dec 21, 1987, in which the writer accused the Japanese government of reverse engineering policies and appropriating US technology through copying and theft.

The report mentioned that Japanese companies circumvented US regulations by selling industrial equipment with US technology to the Soviet Union. Another highlighted point is the legal dispute between Intel and Japanese company NEC. When NEC attempted to create its own series of microprocessors, the V-series, that did not use Intel's microprograms, the US company filed a lawsuit claiming that while NEC succeeded in creating the appearance of change in its microprograms, they were in fact copied and derived from Intel's microprograms. At that moment, the US company's "kicking away the ladder" strategy blocked the advance of Japanese companies. The same thing can be seen nowadays with semiconductors once again in the spotlight.

This brings up very important topics for discussion, such as the use of sanctions, the blocking of access to technologies, and the rhetoric employed in multilateral institutions. The US, for example, advocates policies for other countries that it does not follow itself. This aspect is analyzed by Norwegian economist Erik Reinert in his 2007 book How Rich Countries Got Rich … and Why Poor Countries Stay Poor, in which he challenges economic orthodoxy by showing that the development strategies of rich countries have moved away from exclusively liberal ideas. He draws attention to the contradiction existing among the US elite, noting that the US has always been torn between two traditions, the policies of Alexander Hamilton and the maxim of Thomas Jefferson that the government that governs least governs best. He argues that "with time and usual US pragmatism, this rivalry has been resolved by putting the Jeffersonians in charge of the rhetoric and the Hamiltonians in charge of policy".

If we look at the US economy, we can see that many of the innovations that propelled its companies to the fore came from public investments in sectors such as defense, aerospace, energy and healthcare. The leading technologies used by smartphones, for example, were created from research led by the Defense Advanced Research Projects Agency. Public resources are also destined for universities and national laboratories, and their innovations are then made available to private companies.

At this moment, when economic globalization is checked and economic efficiency abandoned in favor of security, the US government has initiated a series of industrial policies to guarantee its productive, military and technological hegemony. Among them, the most important is the CHIPS and Science Act, a US federal statute signed into law by President Joe Biden on Aug 9. The law promises investments of around $52 billion to raise the production of US-made semiconductors, tackle supply chain vulnerabilities to make more goods in the US, revitalize US scientific research and technological leadership, and strengthen US economic and national security at home and abroad.

Another initiative supported by Washington is additive manufacturing, otherwise known as 3D printing. On May 6, 2022, Biden joined five leading US manufacturers to celebrate the launch of Additive Manufacturing Forward, a voluntary compact among large manufacturers to help their smaller US-based suppliers to increase their use of the technology. According to the White House, this initiative aims to create more resilient and innovative supply chains, grow future industries, overcome coordination challenges that limit the adoption of new technologies such as additive manufacturing, and invent and make more in the US through investments in regional manufacturing ecosystems.

One more example is the creation of the Advanced Research Projects Agency for Health. Established on March 15 as an independent entity within the National Institutes of Health, ARPA-H aims to speed up the application and implementation of health breakthroughs — from the molecular to the societal, build capabilities and platforms that revolutionize prevention, treatment and cure, and support "use-driven "ideas focused on solving practical healthcare problems.

The most recent US initiative is a coordinated whole-of-government approach to advance innovations in biotechnology and biomanufacturing. Among other measures, the initiative seeks to bolster and coordinate federal investment in crucial research and development areas of biotechnology and biomanufacturing, and to accelerate the translation of primary research results into practical use.

It is essential to mention the initiatives of the US government because the US government always puts pressure on any developing countries that seek to make advancements in new technologies and boost their industrial capacity. In this regard, it is worth going back to the quote by Erik Reinert, but this time to pay attention to the contradiction of the US, which boycotts the industrial policies of other countries and uses protectionist policies to guarantee its comparative and competitive advantages. In this respect, developing countries must organize their strategies more assertively when understanding the actions of the powerful, who always say one thing and do just the opposite.

The author is a professor of international political economy at Sao Paulo State University. The author contributed this article to China Watch, a think tank powered by China Daily.

Contact the editor at editor@chinawatch.cn