is a host of this one-hour event. mr. germaine: it is a pleasure

to welcome you to today's discussion about competition and innovation and it is terrific to start this off with one of the leaders of this initiative, senator todd young from indiana. senator young is a principled conservative getting things done for the american people, meeting telehealth and seniors on business efforts, agriculture, national security, and he is one of the forces behind this discussion, a bill with senator schumer. if i got this correctly, you're on the committee on foreign relations, finance, transportation, and small business and entrepreneurship. if we get to the legislative conference, you will be by yourself, which is encouraging for the outcome. let's talk a little bit about

the broad goals and a couple of the key provisions and then i will ask you questions about the future. just to kick this off, the word competitiveness is a nice word. it means a lot of different things for a lot of different people. level us a little bit. when you think about competitiveness, what does that inspire to you? sen. young: competitiveness is part of the very fabric and tradition of the american people. it is something woven throughout our history and we are competitors. we have a system of government, we have a qanon --continent-wide dynamic economy, and we have people that is competitive against the rest of the world. if we borrow -- far behind in any particular areas, the american people, like their leaders, attend to that and do whatever we can to harness their

potential and creativity and power and work ethic so that we can outcompete the rest of the world, especially those who challenge our value system. right now, there is rightly an increasing interest in the extent to which we are falling behind in certain areas of technology development. we will fall behind in other areas if our leaders do not begin investing more in innovation, basic research and some areas, applied research in other areas, and harnessing the talent of many of our entrepreneurs, innovators, investors, and researchers around the united states. we can lead the way in developing technologies like artificial intelligence and quantum computing and robotics and so forth, which will not only drive our economic growth

but also allow us to defend the united states against those who do not share our values. innovation is always important to our growth in our military potential, but it is especially important in this era as our militaries become increasingly dependent on these next generation technologies. there is no reason why we cannot optimize our own systems to me the way in developing these technologies. we cannot only be competitive. we can ensure this century is the second american century. we often refer to the 20th century as the american century. i believe that if we have the right leadership and we harness the power and potential of our peeper -- people, we can defend our way of life. this will not happen by itself, though. mr. gurmet: to follow up a little bit, there is an urgency

of now. the country is still gripped by the pandemic and economic recovery, some very serious foreign policy crises that are pope it's -- focusing the government's attention. getting things done it all is not easy but it seems there is a real shot at a major piece of bipartisan legislation. say a little more about the now and what has allowed the congress to really coalesce around this conversation. mr. young: as fundamental as innovation is to defending our values and our way of life, and allowing each individual americans to achieve their dreams, but material wealth and realizing their full potential, we really do not have a cogent economic strategy -- cohesive economic strategy to take us into the 21st century. this has been a frustration for my colleagues and i,

irrespective of party elevation -- affiliation. what is our nation's strategy as it relates to trade? when do we apply tariffs? under what circumstances? should they be bilateral or multilateral? that should be part of an overall strategy, as shared our strategy as it relates to export controls and technology development and all these areas of economic policy. of course, they have important national security implications, but they also have implications for domestic growth. i would even say our cohesion as a country. if we are not bringing everyone along in this dynamic, hypercompetitive, 20 economy, some people will become alienated. there's a happy coincidence between domestic policy and foreign policy. if we are able to harness the power and potential of

rank-and-file americans, we grow at a faster rate, out-innovate and out-compete others like the chinese communist party, and this can become our century. mr. gurmet: you mentioned something important, the idea that competition is in the entire country's dna, and we have seen innovation land in a particular zip code. my sense is that their shared interest in making sure the entire nation would advantage from this investment. from your experience in indiana, what does the legislation do were need to do to make sure that it is equitable in its efforts? mr. young: i would love to speak to that because in indiana, we are proud of how we have improved creating a strong economic policy environment. we have a great business and relative does regulatory environment with world-class companies.

you think of the pharmaceutical manufacturer. you think of rolls-royce, which develops amazing tools for aerospace and for the auto sector. we have countless great companies in indiana at a sharp policy environment. the we have indiana university and the university of notre dame. if you look at states like indiana, there are several that aspire to keep our level of strength, when it comes to a positive business and working environment, and yet we are not attracting much venture-capital. 80% of venture-capital goes to three states -- california, new york, and massachusetts. there is incredible untapped opportunity. this is about harnessing the potential of people across the country. what this legislation does is, first, we want to reassure

essential manufacturing capabilities, semi conductors in particular. that would be chips. second, we want to invest in areas of applied research where we have seen funding go down over the years, like quantum computing and autonomous systems. we can and should lead the way in these areas. this will increase the productivity of your manufacturing worker in places like indiana so those workers and their families can enjoy a higher standard of living. perhaps most exciting to me and to hoosiers is the establish ment of regional tech hubs. by state of indiana in partnership with surrounding states has the ability to take existing expertise, battery storage or advanced manufacturing, applied to be designated a federal tech hub,

and the seed corn of the next silicon valley can be established right there in the industrial midwest. if you look at our nation's economic history, this is indeed how silicon valley was created initially. it required some federal investment in later, it was the innovators in private investors and entrepreneurs who took over. same thing applied in route 128 near boston and the research triangle of north carolina. we know how to do this. we just need to go back and apply what we have learned over the years. once again, harness the full potential of all americans as we had more deeply into the 21st century. mr. gurmet: you mentioned the integration of technology and national security. we are seeing the center of technology and foreign policy. indiana is trying to drive the

national conversation between the heartland and what is happening overseas. do you think the congress broadly appreciates that connection? mr. young: i don't, and i think it is important for republicans and democrats at the federal level to make that argument so that our constituents understand. i also think increasingly, as we consider the u.s. innovation and competition act, a regular bipartisan process, collates will have a heightened level of understanding about exactly how the domestic tech and competitive strengths of our economy complement our national security strength. and vice versa. this has been the case over the years but unless we are having that formalized conversation through committees of jurisdiction and by allowing our

house and senate to breathe through an amendment process, members are not fully engaging. our system does work good we did this in the u.s. senate when we passed our u.s. innovation and competition act. we didn't have 17 votes when we began this process. as we allowed members to engage and legislate. enter receive solid answers, -- and to receive solid answers, they became educated as did their constituents and that is how we ended up

>> i was going to dive into chips and innovation, but i can resist the idea of order, democracy. you were a recipient of the action award. we have some big legislation, the same problems, but different in their solutions. where do you see the engine of the bipartisan agreement that can move this to adoption? >> well, candidly, the conference report, when we sit down at the table, it will have to resemble the senate, if we are going to get this past. i think the important components

to that work product is semiconductor manufacturing, the chips back, which incentivizes businesses locate their fabrication facilities in the united states. that is important to our supply chain was indiana and other places don't have enough chips to produce all the automobiles that people are demanding. that is just one of many important examples, but if we are making things in the u.s., in this case computer chips, we are also on the frontlines of innovating as a relates to manufacturing processes, a key point, so that is point number one. the second facet is the establishment of an applied research directorate, call it

the tech directorate, at the national science foundation. over the years, our federal government has done a good job in funding basic research. this is sort of her yossi driven -- of curiosity-driven research at our nation's universities, but we have stopped funding some areas of applied research that aren't receiving much funding through regular market processes. we really need to up our gaming areas of applied research, especially those like artificial intelligence and quantum computing that have direct national security applications. and then, the last pillar is of course the tech hub component of this, which arguably is the most important component of the overall legislation. >> so if he can go schoolhouse rock for a minute, and legislative conference, it's almost a mystical being, reagan democrat, we've not seen this happen a lot the last several years. take a few minutes to actually explain the premise of the conference and what some of the challenges are just in terms of

the timing of getting this done. bill we really have an official conference, or do think it will be leadership, semi-conferencing across the aisle? >> of course this table will be met with skepticism, maybe a bit of excitement for those who follow these things close to, but i think we are poised to actually revisit schoolhouse rock and have a genuine sitdown conference, right, where each side, at least in the case of a 50-50 senate, has equal representation where the sitdown and respectfully negotiate and objectively negotiate the various issues, and then after doing that, over of course of weeks or more likely months we will produce a conference report, and those conferees have been appointed by their party leadership to sit as negotiators in that conference committee but they will either -- committee, they will either approve of that conference report by signing, affixing

their signature to it and it will be voted by the house and the senate, or they will disapprove of it. that is the most methodical i think responsible process, and it is a collaborative process that wins itself -- if you can get this done, you get the muscle memory of negotiation and principled compromise going again, and the american people can be encouraged by this. they can be encouraged that the federal government can still tackle incredibly challenging issues. they can do important things even during a time when our politics is tribalized and often fall short in terms of getting important legislation done. >> senator, like chris matthews i have a tingle so we would watching c-span eight to track the process.

you and other viewers. one more question as we close this out. i think relates to the building to get a true bipartisan package. we are spending a lot of time stink about the roles of innovation athletes try to transition the economy, become a dynamic and low carbon future. a lot of interest in this coming from the house. i don't think there's enough discussion of potential boards of this legislation like the infrastructure bill to moving forward on the energy innovation industry. i just wonder if you have a father to about that before we let you go vote. >> your -- sure. if you step back, big picture, this is about competitiveness and saying the telling of our researchers and entrepreneurs and our financial markets to ensure that we win this century.

as a subset of that, one area that we had designated as a key area of applied research over at the national science foundation will be advanced energy technologies. we already have existing expertise in this area. of course the united states is a net exporter of oil and gas resources. that will continue to be the case over a number of years i hope because that's a real geopolitical and geostrategic advantage for our country. increasingly we all understand that these other technologies would become cost-effective at the consumer level, and we want to lead the way in development of these technologies. so in addition to the technology directorate establishing this as a key area of research and are u.s. innovation competition act, we also ensure that we are countering the chinese communist party, the belt and road initiative, where they are investing fairly heavily in green energy technology developments and distribution to other countries.

we have a strategic competition act component of our senate bill that ensures we can compete as a relates to clean energy technologies as well. it's just one of many subsets of our efforts to lead the world in developing next-generation technologies, mostly national security technologies, as we head more deeply into the 21stcentury and compete against our leading strategic rival which of course is communist china. >> senator, look, as we stand as we do every day the possibility to move significant legislation we keep coming back here in terms of it's such an important and also the ability to resuscitate bipartisan delivered principal discussion. so really want to thank you for your leadership i know there are many people who are watching who are eager to help get this done, and so really thanks so much for what you are doing and we look forward to watching the progress. i am now going to turn this over to dane stangler who is abc director of strategic initiatives to lead the next panel. >> thanks, jason, thanks to

senator young for incredibly important conversation and for his leadership on this issue on capitol hill over the last two years. i now have the pleasure of moderating a really outstanding panel discussion of the issues that senator young talked about and this notion of competitiveness at the legislation making its way through congress. i'm going to take a quick second to introduce our really a illustrious panelists here. first we have maryann feldman, unc-chapel hill. maryann wears a variety of hats at the university.

she is a testing professor of public policy, purpose of finance and the research director of private enterprise which is outstanding work on innovation inertia. thanks for joining. we also have chris griswold, policy director from american compass and who also does excellent work include on the issues of competitiveness and innovation. chris working capital for senator marco rubio and emotionally involved in the famine all thinking of tech that it a lay the foundations for the bipartisan moment in congress so thanks for joining us. lastly with john neuffer, ceo of the semiconductor industry association. john lisette organization which is been leading advocate for strengthening and promoting the semiconductor industry that we heard store young talk about in the u.s. and distant great work especially the last couple of years highlighting some of the challenges an opportunity. thanks for joining.

i want to start with a lightning round, a definitional lightning ground for all of you. i want to go around briefly each of you. we heard store young talk about what competitiveness means to him and how he defines it both nationally and get arrested. a quick answer. john, i'll with you. >> thank you. generally speaking competitiveness means ensuring america's home to high level of innovation, and economic growth and will enable our country, our workers to succeed and prosper well into the future. for us in the chip industry that means industry and government working together to advance chip technology, improve our stem education and high skilled immigration systems, and sure for trade and open markets, free big deal our industry, and level the global playing field when it comes to the cost of researching, manufacturing, and designing. other countries are investing heavily to gain ground in chip technology. we should be doing the same thing here. as senator young mentioned, the second american century won't happen by itself.

it's going to take a lot of collaboration on the part of u.s. industry and government. >> thanks, john. i appreciate you mentioning about the tollett, the worker, the human capital component. maryann, now to you. what did you see, what you think of when you hear the word competitiveness? >> interestingly,

competitiveness when you think about it, we typically think about the competitiveness of individual firms -- at the school. there's a long intellectual history will rethink about competitiveness and perfect competition, right, large number of firms, easy entry. we had sort of moved away from that what we have now high degree of concentration in a lot of industries. i also want to mention when we think about competitiveness, this again is the way we grow the pie and we increase prosperity, but it's embedded in a system of business strategy. and so over the long run what we've seen is that how do firms secure a competitive advantage? it is either by being innovative and finding a niche that's profitable, or by cutting costs. and, unfortunately, in the u.s. i think since milton friedman said the duty of the corporation was to maximize shareholder value, we had seen a lot of leaning on cost-cutting which has really decrease our international competitiveness. and i think it's sort of mentioned at the academic and intellectual history, there are many trade economists who realize they were wrong, the theories they were proffering in the 1980's and the 1990's have really not benefited the american economy.

and specifically have not benefited american workers. so think that we need to think about competitiveness a little it differently -- little bit differently to make sure everyone is working in the same direction towards a goal of economic prosperity and renewal. >> thanks. and just as john link that of mr. workers, talent, and to people, i appreciate your linking that the individual businesses which has nations cabining as you point out is really the cover of the country especially our businesses who compete with each other and internationally. chris, turning to you, what does competitiveness mean to you? >> sure, i think it's a really great question and i really appreciate what maryann just said. i think she nailed it by referencing our failed economic theories of the last few decades. for me i think -- excuse me --

for me i think competitiveness, i mean, we should step all the way back and ask what the dictionary definition of the word is, right? to be competitive means to be capable of winning the competition. and to be capable of winning a competition you have to acknowledge that you are in one and just understand what the nature of that competition really is. in the context of national economic policy that means admitting that nations really do, in fact, economically compete. that's really important i think to say at the outset because that understanding as mary and ann referenced is a significant departure from the economic orthodoxy that his reign supreme for the last several decades. i saw an amazing quote from paul krugman the other day from the 1990's where he said a quick and teacher undergraduates to win

-- when somebody talk about competitiveness, we will have done our nation a great service. that's been the prevailing opinion for for a long time. so for me the use of the term competitiveness should imply a kind of realistic admission about the way the world works. once we admit that, once we admit as senator young mentioned that we really are and in economic and geopolitical competition with china, for example, then that lets us ask all the other questions we need to ask which is what this discussion is about. what industries matters and why, why does it matter where production happens, how does innovation actually work? and all the other things we need to ask and answer to secure our national security and supply chains and economic resilience. >> thanks, chris. both you and maryann have referred to this intellectual history and what's changed. and how we used to think about competitiveness in the '90s and that something is changed. we're thinking about it differently and we should be thinking about it carefully today. maryann, i wonder if you could take us through that.

how have economists, scholars of innovation and technology, how have you seen that evolution and what is different today from ten, 20, 30 years ago? >> really, i think one of those -- the most pressing problems right now is the rising income inequality, and also the fact there are many places that have been left behind. and so really theories of international trade said we would be better off if we had specialization in different countries and then we should compensate the people who would be laid-off, who would lose their jobs. but that never happened. and so what we are i think sort of now seeing is the emergence of the sort of new models, and they are not sort of lagging i believe. we don't have statement as powerful as milton freedman's statement that the purpose of the corporation is to maximize

the shareholder about you. and so people are now talking a lot about the responsibility and the way in which things are produced come sort of recognizing that we are in these sort of complicated economies where things are interrelated. and so there is a very nice movement to look at redefining the role of corporations in society and really rethinking the sort of workers not as a cost but as a productive input. and so that change is sorted underfoot.

one sort of also want to recognize one think that national competitiveness, one of the big surges has been the recognition that the locus of inventive and creative activity is at the regional level. so this underlies those sort of how technology hub proposal, and it really is then a matter of working with these local economies to sort of then create things that trickle up. rather than trickle down, which is been such a dominant theme, is it is a matter of creating this growth locally, creating synergies and then allowing greater participation in the economy by a variety of different places and different actors. >> absolutely want to get in discussion about that regional component. it's a big part of the legislation on capitol hill. we heard story on talk about it, absolutely want to make sure we get that in this discussion. maryann, you talked about the

corporate purpose of corporations. esg environmental social government factors is something that is paid a lot of attention, a lot of financial investments , and something bpc working on. at least in our conversations on both sides of the out is increasing recognition as you point out the close connection between esg competitiveness and also the need for more movement. we are seeing that growing recognition on capitol hill. chris, the corollary to what maryann has been talking that is the political evolution and how the views of cover and judgment of industrial policy which is been used for increasing frequency over less years have set changed? you work on capitol hill. you work for senator rubio. i think you are involved with a couple of the papers in a report that was produced on american investment. take us how you've seen the political context change over the last several years. >> yeah, sure. first of all thanks for reading. i'll let my former colleagues know, they will appreciate it.

so just for reference, the text you are referring to are are a few reports senator rubio release back when he is chairman of the small business committee, just to summarize them quickly. the first was on china's, made in china 2025 strategy which the communist party clearly outlined its very specific plans to dominate ten critical industry areas in the 21st century. what that report did was try to understand the applications of that fact which, number one, what you again admit that the chinese communist party clearly understood itself to be in fierce competition with us and was organizing its economy accordingly. the applications were important . it meant china was trying to do loud on the basis of its own economic strength to set new turn for international economic competition in a way that merely appealing to kind of global trade rules and norms couldn't do anything about.

then if global trade dorms were not can help us then we better have a plan for own industrial and innovative strengths sufficient to answer the challenge. the other thing that report included which is something maryann pointed out quite rightly is the common defense of international trade expanded, trade with china in the '90s, including all of our offshoring, was wrong. the concept was totally flawed. the idea we could design here and make there was just mistaken. the idea was we could make maintain our position on the higher end of the value chain, while china would handle the lower end, but what actually happened was china started moving up the chain brought to

that as well. we got how innovation works wrong. it does matter where things get produced. that was the first report. quickly, the second one pointed out capital investment in america's declining and that decline is being driven largely by the fact that our economy has been financialized and is in the thrall of shareholder primacy three. marion mentioned milton friedman. one of the things a quarterly return access financial private sector does is under invest in both productive and social capacity and insight and in research. senator young made this point about market forces on their own not now adequate investing in the kind of innovation and science that we need. hence the need for public investment on one in for public policy to promote investment from the private sector. those are the texts you referenced. the to answer your question, asked the time those reports were sort of a voice -- industrial policy wasn't a phrase respectable economists were supposed to say but as you mentioned in the last few years we've seen that change. the concept what are just described has become more widely accepted wisdom, academics and think tanks across the political spectrum including mine have taken up the task, and is also an appreciation that industrial

repetitiveness has always been a -- competitiveness has always been a part of her history -- our history all the way back to alexander hamilton. there are still a lot of economists and the return to don't like it and a senator young said there's still a lot of work to be done to congress connect the dots, but politicians in both parties are starting to understand that things haven't worked out the way we were told they would. the only other point i i would make is i think part of the reason politicians get it now, increasingly get it, is not just because they can see the problem themselves, although leaders like senator young clearly can. it's also because politicians are responsive to the public, and the public absolutely get it. a lot of working americans have understood this problem for a long time. offshoring manufacturing cost s billions of jobs and lump those communities have never

recovered. people have been angry for a while and i think that anger has reached a political breaking point that politicians are starting to notice and respond to and that has prompted leaders to new approaches to trade at industrial policy and competitiveness. >> thanks, chris. john, i want to take up a couple issues with you. first, i would be remiss if i did not remind our audience to submit questions using the live chat function on youtube or facebook, or comment on twitter using the hashtag bpc life. john, we've heard chris and maryann talk about how the mindset and the thinking around combativeness, a policy is changed. i want to ask you about some specific things that are in competition with regard to semiconductor that help us think about where the semiconductor industry fits into this historical revolution where are we now. where were we and our things changing? >> great question. as you said, the global chip

shortage has been really stark reminder of ubiquity of semiconductors and their importance in virtual all areas of our society and economy as we have just become amazingly digitalized. this industry is a proud history of america. semiconductors were invented here more than 60 years ago, and u.s.-based companies command the lion's share of the global market. we account for about half of the world's total chip sales. but we have lost ground in key areas, especially when it comes to where chips are made in 1990 some of you may put these numbers before, 37% of the world's modern chip manufacturing capacity was located here in america. today it's only 12% and it is continuing to fall. in addition, even as the cost of researching, designing and manufacturing more and more advanced chips has increased, federal investment in chip research have been flat as a share of gdp for decades. while other countries have significantly ramped up research investments. chris mentioned under investment

in r&d by industry, but i'll say you as a chip companies plow about one-fifth of the revenues back into r&d which is among the highest shares in any industry. but it's important for federal governments to supplement those huge private investments with its own funding. product development and product manufacturing work best in our industry when they happen in the same place. it's two sides of the same coin. when we produce more chips here, we do more of the research and development of those chips here. in addition, research funding and activity it generates at the universities, centers of excellence, national labs, et cetera, is a major driver of talent and workforce development. it's a virtuous cycle. we need to pump more oxygen into. >> thanks, john. we heard senator young mention a few times the chips act. i think he highlighted this as one of the three key components

that he sees not just have you -- not just the entity that he helps to lead, but ultimately, he could be the core of a partisan package but what is that you tell your audience what is a chip sector what does that do and will with the potential impact be? >> well, senator young and many, many of his colleagues in the senate have been huge champions of the chips act and usica, and the counterpart legislation in the house was just passed recently, all very helpful. i just want to offer my appreciation for the support of senator young for this historic legislation. most relevant in both usica and competes to the chip industry is the $52 billion to fund both critical semiconductor manufacturing incentives and research investments. this funding has the support of a broad bipartisan majority in both chambers.

i know it's hard to believe we are actually there but we are, and it's wonderful. many of america's governors, mayors, a range of top national security experts, lots and lots of ceos and business groups in many critical areas of our economy, and last but not least, the american public. as chris said, at the end of the day, politicians are responsible to the public -- response to the public and outsourcing this legislation. the senate passed usica last june and the house passed the american competes a few weeks ago. now leaders in both gyms must work together to work out differences in the bills and develop a compromised version that can be swiftly passed by both chambers and signed into law by the president. a $52 billion federal investment would spur hundreds of billions of dollars in company investments, create hundreds of thousands of u.s. jobs, and

usher in an historic resurgence of chip manufacturing in america. but the clock is ticking and the time to act is now. getting these investments across the finish line in short order would greatly strengthening america's economies, our national security, and make our supply chains more resilient. and our leadership position and a range of essential and emerging chip enable d . >> thanks, john. for all the reasons that you have laid out bpc through her advocacy arm, abc action endorsed what became usica for all the reasons you let out for the strong bipartisan support, so thank you for that summary. john has gotten us into the discussion of specific legislation that is making its way through congress. i want to ask chris and maryann

about some of the specific uses the first with a couple of audience questions. one i will save for later in the conversation but one is on this question, this issue of industrial policy, chris and maryann you were talking about and john you look to intrinsic semiconductor vestment. rebecca has asked, does the industrial policy even still exist? chris and maryann talked about some of the intellectual evolutions here but i think there is this question of what is it? i mean, we have talked about it, and you are talking about it. but does it in fact exist? i will let any of you jump in. >> let me say that we have a de facto industrial policy, which, as chris mentioned, favors

financialization right, and the growth of banking and venture capital and the evolution of venture capital to look a lot more like banking. and so we have always had industrial policy. so chris, i have never met you before but we have a lot of similarity. going back to alexander hamilton, right, and sort of thinking about what was the role of manufacturers in the economy, arguably we've had industrial policy. we just don't want to acknowledge it. and i think we need to think more strategically. i think that building back supply chain is very important, and that is a part of industrial policy. we focus on lot on science policy, and i think that we do need to be investing in science, but if we're investing in science without investing in industries and other downstream

activities, we are simply pushing on a string. >> i would agree entirely. that is such a critical distinction. which is it is about strategic decision-making. which of the intellectual history side requires admitting that we are allowed to make strategic decisions, which a lot of economists would prefer we not do. but yeah, i mean, to be a supportive and industrial policy of any kind i think you have to answer two questions -- do we care what industries the country invests in, and is there anything we can do to promote that outcome? the answer is we should care. we should anywhere and there are things we can do. so to give john and your industry some credit, to echo what you said, we did a little bit of research into the semiconductor industry, and we found that there are significant -- it costs us significantly

more to do this here, anywhere from 30% to 60% more to manufacture chips here than elsewhere. the primary explanation for that difference is the governments support that other nations are pumping into the industry there. . is a very straightforward, strategic question -- does the united states care about whether we can make chips? and if the answer is yes, then we should do something about it. and as marion said, i think industrial policy does exist. not choosing is a choice. let's be honest about the fact that we have to make a choice and do it right for the industries that matter. >> i could not agree more. the reality is the american economy does not function in a vacuum. we work in a global community that plays by different rules. countries that have strong focus -targeted industrial policies.

when it comes to chip manufacturing, it stands out starkly that strict adherence to market forces just simply doesn't work. other countries have major incentives in place to make it much, much cheaper to build chip manufacturing facilities around the world, much more expensive to do it here. so we need government to make a strategic choice of stepping in in this case. because if we don't, the endgame for us is virtually no chip manufacturing on u.s. shores, and that is not something anyone really wants when he think it through. >> thank you. we have a couple more audience questions. i will again remind the audience you can submit questions using the live chat feature and you on twitter. i want to get to a couple of those questions, there's a couple more things i want to ask the panel as well.

maryann, you just referenced a couple of pieces in the legislation, the legislation establishes a new technology directorate at the national science foundation. there is also -- you mentioned it is complementarity between research and supporting industries on the commercialization side area talk more about what you see as the need there, the industry and university commercialization piece, and how the technology director at nsf would work to promote that. >> thank you. it is absolutely true that i have been funded by the national science foundation, i worked at the national science foundation, and i have also studied the national science foundation as an agency. it is kind of a remarkable

place, and a national gem. as they expand their mission, it really is creating balance between nih, and nih funding, which is just health. health is important, but that also all the rest of science. so i think what we witnessed at nsf -- nsf started small business innovation program. they have also been very creative in adapting it to the needs of small businesses in the industry. but i want to mention three things that i think will be critical. we will be funding more research. and the act gave universities ownership of intellectual property that results from federally funded research. this passed in 1980. and universities have responded by creating tech transfer

offices that manage this commercialization process. but in many ways, this is an unfunded mandate. you can own the intellectual property, but there is no funding to secure that it will be commercialized, that it will end up in the hands of firms. so this is something, if there was money set aside to better fund the translation and tech transfer activities, i think that would enable the legislation to have its impact. so really, it is so beautiful to see this coming together, but the devil is in the details of the implementation. i also want to say, as we think about these hubs, it is important what we are doing is building ecosystems. the idea of ecosystems is to replace the older concept of clusters.

really, ecosystems are more organic in their formulation, and they require a lot of local involvement. here, the department of commerce economic development administration has been funding many projects that are sort of furthering this. so there is a need to look at the synergy between science-funding and other activities. and specifically, to let local areas define where they are going. but i think also, we tend to focus on vc funding. and what we see is that really, vc funding will fund small firms, but that it will tend to pull them to silicon valley, pull to the locations where they are located with the idea that the firm will be sold or acquired in a finite period of time. so this does not allow the local areas that are incubating these firms and sort of creating them

, to realize the value and the employment potential of new firms that are really sort of the innovative engine of the u.s. economy. and i think also, we have to be concerned about monopoly power in the u.s. what we have is a lot of small firms who are starting to sort of scale. they are going to be acquired by these monopolists and they are not able to compete against them. so it really requires sort of some fine-tuning to different components if we want to realize the potential of this fact. >> thank you. you have made a number of excellent points, all issues i wish we had time to get into. we have maybe eight or nine minutes left. i have a couple of wrap up questions for all of you, but i

want to make sure we get in a couple of audience questions. you have multiple questions from the audience regarding something that we heard senator young talk about, which is the relation between energy innovation and our energy challenges and competitiveness. a subset of that question, as senator young described it, a subset, john, directed to you, is the relationship between energy innovation and our energy challenges, and competitiveness. -- the relation between rare earth elements and critical minerals. maryann, i think you may done some work on energy innovation -- john, and maryann -- talk about climate change and economic competitors. but john, i will go to you first. to see if you have comments on this rare earth element to the critical minerals question. >> the reality is for our industry we are not exposed in that regard.

most of the key raw material is silica, which comes from coarse sand. we get it from strategic allies. so we really not heavily exposed. on the climate change issue, i just want to say that chips are absolutely critical for helping us sort through better solutions to climate change. they really are kind of a big component to that, a.i. chips and others. that is another reason that we need to get this usica legislation through congress. host: thanks, john. chris, any thoughts on the link between energy innovation, the inner challenges we face and national competitiveness policy? >> sure.

as a general matter, i think you see a really good example of how energy dependence has geopolitical implications right now in europe, with the crisis that we are facing in ukraine. europe, germany especially, is incredibly dependent on russian energy sources and that creates geopolitical problems. so the better a job we do at investing in our own energy innovation and independence across the board, of course, it is essential. host: thanks, chris. we've got just a few minutes left. i want to end on an optimistic note. let's assume congress get to the formal conference process, the mystical creature jason has described with senator young, and congress passes something, a bipartisan competitiveness bill. do we declare mission accomplished? is the job done? what do each of you think?

is it the end of the beginning? is the assembly the first step? maryann, what needs to happen after the legislation passes? >> that is a really good question. and i think simply getting this across the finish line is a big, big victory. what we're seeing is a once-in-a-generation investment in science and innovation that's unprecedented in my lifetime. and so i think that there is just great potential. but again, many times the dreams in washington are dashed in the heartland through bad implementation. i think a lot of attention needs to be paid to the details to make sure that we are talking about competitiveness and innovation, but really, the objective is to increase

american prosperity. i think that's got to be kept in mind. again, the best plans in washington will not be realized unless we can get firms on board and can get firms to adjust their thinking. host: thanks maryann. taking a cue from some of your earlier comments, i think that regional piece, the innovation piece, no matter what gets done in washington, is important. john, you represent some of those firms maryann is talking about. what do you think is still going to need to be done? what else needs to happen in terms of semiconductor? >> in terms of the chips act, $52 billion is certainly not chopped liver. but once we get this passed, we will not be able to declare mission accomplished. but i will say that it is a great start.

as i said before, this legislation would provide a huge return on investment. i expect government leaders will see this and be eager to enact similar measures in the future to reap the benefits for the american academy -- job creation national security, and supply , chain resilience. in terms of priorities that can be advanced soon after the competitiveness legislation is enacted, we believe an investment tax credit for semiconductor manufacturing and design expenses would be a very helpful complement to the grant and research investments , including usica and competes. we also support continuing efforts to strengthen america's s.t.e.m. education system, reform high skilled immigration laws, promote free trade and open markets, and protect the industries that are valuable -- intellectual property, among a number of other priorities. host: thanks, john. chris, maryann highlighted

innovation. john highlighted many of the pieces they need to get done and also paint this as passing legislation will help policymakers see the light for further action. what else do you see is going to get done? >> i agree entirely. it would be a mistake to see the passage of a single bill as kind of the endpoint. i think what we need is a shift in mindset about economic policy. sometimes i think we should stop calling ourselves a developed nation. it kind of implies that we should be complacent. i think what we need, to steal a phrase from michael linden, a mindset of development in which we are continually investing in our own capacity and innovation as a way of doing economics the long-hauler. so to the extent that the passage of this bill helps put us on that path of a shift in strategy and approach to our economics, i think that is great. but it is certainly not the endpoint.

it depends what the negotiators end up with. there are a couple of ideas, in one version or the other of these bills that i think are really ambitious that i hope make it into the final product. if they don't, we'll have to circle back. the one that i particularly hot am on is the competes act revision for an outbound investment review authority where, if a u.s. firm wants to offshore a critical capacity, the president can just say no. i think that is awesome and i hope it makes it into the package. if it doesn't, just have to come back and try again. something else, we need in national development bank or some way to invest, on the financing side, whether that is coordinating existing and national authority that federal agencies already have into any facility like a government bank, whether that is the compete at's

office of supply chain residency idea which has billions of dollars to invest in critical manufacturing abilities, whatever it looks like, we have got to get that right. there are a number of more ambitious ideas that are on the table that i really hope make it across the finish line. and if they don't, we will have to keep at it. host: thanks, chris. sadly, we are out of time. we could clearly go all day on these topics. there was too many audience questions to get to. thank you to our audience for submitting them. i apologize we didn't get to them but as our panelists have highlighted, they are questions that are important that we and our partners will continue to pursue. thanks to maryann, john and