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A new game for US economic prosperity

Deborah Wince-Smith has been the president and chief executive officer of the Council on Competitiveness for 19 years. The Council recently released their latest report, “Competing in the Next Economy”, which offers a new perspective, compared with previous reports, by focusing more on the equitable distribution of the opportunities it seeks. I talked with Deborah for an editorial in Science. Here’s more of our conversation.

Holden Thorp: You’ve been watching US competitiveness for a long time now. What are your impressions on how it has changed—administrations coming and going and our changing relationship with China—and what brings us to the moment we’re in now under the Biden administration? In other words, give me the big picture.

Deborah Wince-Smith: Well, in a way, where we are today is almost a back-to-the-future story, but with some different parameters. When I look back, some 35 years ago when the council was formed, it was a time of tremendous turbulence. We were in transition and we felt that as a country, we were transforming. And what was very exciting back then, as it is today, is the creativity and ferment in the policy world. President Reagan, in response to the competition in trade and technology from Japan, created a national commission on industrial productivity chaired by John Young, who was CEO of Hewlett-Packard at the time. What came out of that was the need for a new game in this country. We needed to understand our assets, our capabilities, and how to ensure economic growth and prosperity from all our incredible technology advantages. These advantages didn’t stop the Japanese from beating the US in many strategic industries that we had created. So that was where we were when the council was formed. What was really exciting then, and today, is how a leadership organization in the private sector can’t really be a leadership organization, in my opinion, unless it brings in the relevant stakeholders. So having industry leaders from all sectors, including university presidents, labor leaders, and national lab directors, is a very powerful construct for understanding policy and coming up with some very high-level solutions to move forward. That’s where we were 35 years ago, and the council’s DNA has always been in technology.

Holden Thorp: One thing that has always impressed me about the council is that it has a lot of diversity. You have university presidents, labor leaders, and people from corporate America. At a time when everybody is wondering how to bring people together, how have you managed to bridge those worlds ?

Deborah Wince-Smith: Well, one of the things that is in the council’s DNA is that from the get-go, it has been bipartisan. So throughout its history, we’ve never engaged in partnerships with members of Congress or the administration without having them be bipartisan. That is something that we guard with sanctity. And so I think that in forming these partnerships across administrations and across the agencies, there’s a trust in working with the council—that we’re not pushing the interests of a company or industry, or the universities. When the council was formed, people thought, “Well, what corporate America does is good for America.” But we’ve learned during this period with the demise of many of our manufacturing centers, that individual Americans in regions throughout our country have not been part of the prosperity game that’s at the heart of who we are as a nation. It’s not just what we want to do for our individual members, but for our country. I always say that the people who joined the council—our leaders, CEOs, university presidents, and labor leaders—they’re patriotic in the best sense of the word. They are globally focused, but they care about this country.

Holden Thorp: That comes through loud and clear in everything that you all do. Why have you now doubled down on your historical focus on leadership and created this national commission on innovation and competitiveness frontiers? Tell me your thinking that led to this and why now?

Deborah Wince-Smith: Back in 2004, the council put together the first ever national innovation initiative, really focusing on innovation, not just research and development, as the determinant of wealth creation, and ensuring higher skills and jobs for people, and securing our national interests globally. The world, of course, has fundamentally changed since the council was formed. The US used to support two-thirds of R&D; now it’s a little under a third. And we have the emergence of competitors around the world, some of whom are close allies. Some are countries that are entering the mainstream, such as India. But the real imperative for our work in the national commission is the systemic decline in federal investment in R&D. In 1964, federal R&D support was about 2% of GDP. That was during a time of the Cold War and the Space Race. Now we’re about 0.6% GDP. And yet the challenges and issues are more important than ever with the emergence, particularly, of China. All countries want to raise their game, and we’ve been a little bit stagnant, both in our investment and coming up with new models of how we capitalize on our assets and combine them in new ways, in new models, in new partnerships to meet the challenges of the day.

And our workforce training has not kept pace with the change. It isn’t tackling how work is going to be in the future. And very importantly, are we educating? Are we ensuring that the next generation of young people has the skills and talent to move ahead in the enterprise? Because no matter what job it is in the future, you have to be digitally literate. You can no longer have just basic reading and writing and arithmetic to survive and prosper. So there was a confluence of circumstances in our historic work in innovation, advanced manufacturing, and energy transformation that led our leaders to say, “We need to really come together, understand this new world, new landscape,” and then come up with a very forward-thinking new game for a new world and to ensure US leadership at home and also in the global environment that we’ve helped shape since World War II.”

Holden Thorp: Tell me who’s involved in the commission and what’s been going on in the first year.

Deborah Wince-Smith: Well, we have a great group of leaders. Dr. Mehmood Khan has been our chairman. He was vice chairman of PepsiCo and a medical doctor, interestingly, and the forefront of health care. He led the commission with our vice chair, Brian Moynihan, CEO and chairman of Bank of America. And then our university vice chair is Michael Crow at Arizona State University, one of the big innovators in higher education. And then Lonnie Stephenson, the president of International Brotherhood of Electrical Workers, which is such a high skilled, critically important union for many, many industries.

So in the first year, these are our chairs. We have a commission now of some 70 leaders, spanning industry and universities, and including all the big lab directors and union leaders. During this last year, we’ve really come together. “Virtually” turned out to be an advantage for us because we had so many meetings that were easy and we produced a very powerful agenda that we released in December: the 10x Agenda for a new era of innovation.

Holden Thorp: What’s the biggest thing that the administration has done that’s consistent with your plans?

Deborah Wince-Smith: Well, everyone was very pleased, of course, when the president made the director of OSTP, Eric Lander, a cabinet-level official. That is something we’ve all wanted for a very long time. But I think, and this relates back to some of our challenges, some of the early executive orders have been fantastic. I would like to reference the one from February 24th, around the whole criticality of supply chains in advanced manufacturing. That really pushes forward one of our strongest recommendations around ensuring US leadership in advanced microelectronics and these underlying platform technologies that will determine everything in the future economically and in national security.

This is a time of creativity, of fermentation, of doing new things to meet new challenges. I see what was accomplished in vaccine development in this last year. It’s an incredible model of what we need to do for an “all-nation, hands-on” development of some of these next capabilities. Why can’t we have the equivalent for quantum technology platforms and AI that we had for vaccine development?

Holden Thorp: There’s no reason why we shouldn’t have the capability to do it. What about the way we teach science in America? What do we need to do to get more of the kind of folks that you need to achieve your goals out of America’s colleges and universities?

Deborah Wince-Smith: Well, I would even start earlier perhaps, going back into the K-12 world. I often think about how we develop sports talent in our country—we start identifying children in the fourth or fifth grade who have talent and interest in things, and they are cultivated. We don’t do that in the core foundations for STEM science and technology. Combining that capability in STEM with our leadership in liberal arts and humanities and social sciences is just as important as the core science and technology, because creativity and innovation occur at those intersections.

We can’t just have nodes of innovation capability on the coasts. We have to think about how to create a new agenda in this country for regions and states. That’s part of this whole educational imperative as well. Certainly, parts of the country have been totally hollowed out because of the global supply chain shutting down. US manufacturing was decimated, and we all know where the affected regions are.  We need to think differently about the revitalization of these areas in terms of investment. And I look at other parts of the world. In fact, I said this a few years ago to a very senior Chinese official who visited, and he said, “You cannot do this.” And I said, “Why?” And he said, “You can’t do that in the United States.” I was thinking of Shenzhen, which is near Hong Kong, where there are 22 million people. Twenty-five years ago, there was almost nothing there. But creating economic trade zones, manufacturing zones, doing things that give tremendous incentives beyond just tax rebates that draw some high-value economic activity in these regions is essential. We need to think of this in a new way and not be crippled by the old language of industrial policy that is really hurting us.  We don’t want to take away the vibrancy of our entrepreneurship or our private sector of partnerships, but at the same time, there is an equity issue. We can’t say we are a great nation when so many parts of our country and so many citizens are not participating in the opportunities.

Holden Thorp: I’m pivoting now to international stuff. You’ve already said some things about China, but what about the UK? I’m very impressed with their ideas and plans. I don’t know if it will achieve them, but I don’t know what you all have thought about that.

Deborah Wince-Smith: Well, I’m a huge fan of the UK for many, many reasons. I received a graduate degree in archaeology from King’s College, Cambridge—the first year of women there. So it’s part of my history . And of course, they have tremendous science and engineering and industrial capability. I’m on the bullish side of coming out of Brexit. I think their strategy for doubling down and building up and redesigning their relationships across the Commonwealth is going to be very important. In fact, we just had a discussion at the Council on Competitiveness of building on our deep partnership with Australia, a very close ally, a tremendous player in science and technology and innovation, and including the UK. And bringing in India.

Holden Thorp: And so with regard to China, how do we think about the partnership and the competition? On the one hand, we want science and technology to flourish anywhere in the world all the time with as much collaboration as possible. On the other hand, the industrial part is very competitive. Trump wanted to do it with tariffs. Biden wants to do it with talking. What should the industrial sector do to manage this?

Deborah Wince-Smith: I’ve talked to many leaders from both political sides who served at very high levels of our country when our China policy was being designed and implemented, and they have all said something that’s very, very profound—that the US view, which I think is shared by the EU and the UK—is that if we brought China in to the WTO and into these global networks, it would become more like us in terms of rule of law, transparency, regulation—all the things that are the foundations of trust that enabled global commerce trade and things. But that hasn’t been the case. And unlike Japan, which kept its economy closed in many ways, the Chinese did not do that. China welcomed us and other companies to come in and to invest and to build capability there. But at the same time, you saw the beginning of a very, very mercantilist predatory set of industrial practices. If China implemented the existing intellectual property laws they had on their books, we would have $1.3 trillion more in GDP. This is a staggering transfer of knowledge. An improper wealth creation that’s never occurred in human history. And now it’s being augmented with very pernicious, very accomplished cyberattacks. One thing about the US-China relationship is that they don’t like things to be called out. And that is something that the previous administration maybe did in a rough way. I think this administration will continue it perhaps with a different style. So we have to have rules of the game for this powerful market.