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61. How US chip controls on China benefit and cost Korean firms

Author:
Martin Chorzempa
Publication Date:
07-2023
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
Export controls have become one of the most contentious battlegrounds in US-China technology competition. US semiconductor export controls aimed at China, however, have also embroiled allies such as South Korea. These controls largely do not affect Korean firms' chip sales to China, but Korean firms are vulnerable because they have large chip production facilities in China, which make around 40 percent of the memory chips for these firms. Those facilities in China rely on access to semiconductor manufacturing equipment (SME) or servicing from not only the United States but also other countries that have imposed controls on exporting advanced SME to China. Although the United States is unlikely to shut off access to the technology needed to keep the plants running for the foreseeable future, it has signaled that it will not allow new technology needed to upgrade those facilities, so they will become uncompetitive over the next few years and will need to be shuttered or sold off. For future production, Korean firms will need to build new facilities at great (albeit subsidized) expense, amortizing the sunk costs of operations in China over the coming years. At the same time, the controls have created significant benefits for Korean firms by shutting off Chinese competition for their memory businesses. Yet benefiting from the tensions between superpowers comes with serious risks. Firms and governments must deal with much greater uncertainty and evaluate the risk of their dependence on both the United States and China.
Topic:
Science and Technology, Business, Exports, Manufacturing, and Semiconductors
Political Geography:
China, South Korea, and United States of America

62. How the United States solved South Korea’s problems with electric vehicle subsidies under the Inflation Reduction Act

Author:
Chad P. Bown
Publication Date:
06-2023
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
South Korea felt “betrayed” when President Joseph R. Biden Jr. signed his administration’s flagship climate legislation, the Inflation Reduction Act (IRA) of 2022, into law. This paper first shows how the Biden administration addressed Korea’s concerns about the law’s effect on its sales of electric vehicles (EVs) in the United States. Thanks in part to the Treasury Department’s regulations written to implement the law, Korean exports of EVs to the United States grew even after the IRA went into force. Whether these actions by the Biden administration are enough to assuage the concerns of the Koreans—and other allies adversely affected by the IRA—remains to be seen. Furthermore, the US accommodation of Korean concerns came with tradeoffs by offsetting key incentives Congress may have intended in passing the IRA. The paper examines the potential impact of the law on South Korean battery companies, and it provides an initial exploration into how the Korean government responded to the IRA by adjusting its own policy mix of EV consumer tax credits and industrial policy for its EV plants and battery makers.
Topic:
Climate Change, Science and Technology, Inflation, Energy, and Electric Vehicles
Political Geography:
Asia, South Korea, North America, and United States of America

63. National Science Foundation Technology Innovation Partnership Evaluation

Author:
Barry Bozeman, Nick Hart, Randolph Lyon, Theresa Pardo, and Janet Weiss
Publication Date:
11-2023
Content Type:
Special Report
Institution:
The National Academy of Public Administration (NAPA)
Abstract:
The National Science Foundation (NSF) is an independent federal agency established in 1950 by Congress "to promote the progress of science; to advance the national health, prosperity, and welfare; to secure the national defense." NSF supports research and the fields of fundamental science and engineering, except for medical sciences, and helps the United States drive leading discoveries. In March 2022, NSF established the Directorate for Technology, Innovation, and Partnerships (TIP). TIP was created to focus on significant challenges and opportunities across the entire science and engineering enterprise and to strengthen and scale the critical research that will drive future technologies and solutions. The NSF required an assessment of the organizational and management structure of the NSF's Directorate for Technology, Innovation and Partnerships. The Academy: Evaluated and made recommendations to efficiently and effectively implement the Directorate for Technology, Innovation, and Partnerships; and Evaluated and made recommendations to ensure coordination of the Directorate for Technology, Innovation, and Partnerships with other directorates and offices of the Foundation and other Federal agencies.
Topic:
Government, Science and Technology, Innovation, Management, Performance Evaluation, and Public Administration
Political Geography:
North America and United States of America

64. Chipping Away: Assessing and addressing the labor market gap facing the US semiconductor industry

Author:
Dan Martin and Hamilton Galloway
Publication Date:
07-2023
Content Type:
Special Report
Institution:
Oxford Economics
Abstract:
Thanks in large part to enactment of the landmark 2022 CHIPS and Science Act, a significant share of expected new chip manufacturing capacity and R&D is expected to be located in the US. We project the semiconductor industry’s US-based workforce will grow by nearly 115,000 jobs by 2030, from approximately 345,000 jobs today to approximately 460,000 jobs by the end of the decade. We estimate that roughly 67,000, or 58%, of these new jobs risk going unfilled at current degree completion rates. Of the unfilled jobs: 39% will be technicians, most of whom have two-year degrees or less; 35% will be computer scientists, or engineers with four-year degrees; and 26% will be engineers at the master’s or PhD level. For the US economy as a whole, we estimate that 3.85 million additional jobs in these three technical fields will be created by the end of 2030. Of those, 1.4 million jobs risk going unfilled unless the pipeline for such workers is expanded. To address the skills gap facing the broader economy and the semiconductor industry, we present three core recommendations to strengthen the US technical workforce: Strengthen support for regional partnerships and programs aimed at growing the pipeline for skilled technicians for semiconductor manufacturing and other advanced manufacturing sectors. Grow the domestic STEM pipeline for engineers and computer scientists vital to the semiconductor industry and other sectors that are critical to the future economy. Retain and attract more international advanced degree students within the US economy.
Topic:
Economics, Science and Technology, Regulation, Manufacturing, Labor Market, Workforce, and Semiconductors
Political Geography:
North America and United States of America

65. The Comeback of Industrial Policy. The Next Geopolitical Great Game

Author:
Alessandro Gili, Davide Tentori, and Paola Magri
Publication Date:
12-2023
Content Type:
Special Report
Institution:
Italian Institute for International Political Studies (ISPI)
Abstract:
Industrial policies are the key element underlying today’s geopolitical scramble and a pillar of national security. Reacting to Western weaknesses and bottlenecks in the global supply chains, highlighted by multiple shocks such as the pandemic, the war in Ukraine, and the recent Israel-Hamas war, the US in first place and the EU later have started to introduce new industrial legislation aimed at making up for lost ground with respect to other industrial powerhouses, such as China. Besides being policy tools to accelerate the green and digital transitions, however, the US Inflation Reduction Act and the Net Zero Industry Act, as well as the US and the EU Chips Acts, entail subsidies, local content requirements and export controls targeted at strengthening the domestic industrial base for critical technologies, fostering strategic autonomy and de-risking from excessive foreign dependencies. This race poses risks for the weaponisation of industrial policies and fragmentation of international trade and also potentially jeopardises technological development. How can we strike a balance between economic security and efficiency? Which sectors are the most critical and which ones are the leading global powers pursuing? What will the consequences be for global value chains and international trade? Is it possible to reach an agreement on rules for a new level playing field to prevent economic competition turning into economic warfare?
Topic:
Development, Industrial Policy, National Security, Science and Technology, European Union, Geopolitics, Trade, and Supply Chains
Political Geography:
China, Europe, and United States of America

66. Action on AI: Unpacking the Executive Order’s Security Implications and the Road Ahead

Author:
Janet Egan and Diletta Milana
Publication Date:
11-2023
Content Type:
Policy Brief
Institution:
Belfer Center for Science and International Affairs, Harvard University
Abstract:
On October 30, 2023, President Biden issued Executive Order (14110) on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence.[1] Directing agencies to take action within existing resources and authorities, this order seeks to empower the U.S. to realize the full benefits of AI, while still mitigating critical risks. Alongside a focus on civil rights, consumers, workers, competition and privacy, the Executive Order also aims to promote national security by addressing AI safety and security risks, bolstering U.S. technology leadership, enhancing government AI capacity, and leading international cooperation efforts. This article provides an overview of key national security initiatives contained in the new Executive Order and explores issues relevant to their implementation, including: Ensuring Safe and Secure AI; Maintaining U.S. Tech Leadership; Building Government Capacity.
Topic:
Security, Defense Policy, Science and Technology, and Executive Order
Political Geography:
North America and United States of America

67. Ocean Issues in Alaska: From Fisheries Management to Public Safety and Security

Author:
Fran Ulmer
Publication Date:
08-2023
Content Type:
Policy Brief
Institution:
Belfer Center for Science and International Affairs, Harvard University
Abstract:
Alaska is an important region for the Department of Homeland Security (DHS), given the Department’s statutory authority and responsibilities. This reality applies with particular force to the U.S. Coast Guard (USCG), with its jurisdiction over fisheries enforcement, drug interdiction, marine safety, oil spill response, search and rescue, and more. Challenges facing the USCG in its domains of operation around Alaska—the Arctic Ocean, the North Pacific Ocean, the Bering Sea, the Chukchi Sea, and the adjacent communities—include the following:
Topic:
Security, Science and Technology, Natural Resources, Oceans and Seas, Public Policy, Sustainability, Fishing, and Public Safety
Political Geography:
North America, Alaska, and United States of America

68. Export controls effectively constrain China's advance in microchip production

Author:
Lisa Fuller
Publication Date:
08-2023
Content Type:
Policy Brief
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
American and allied export controls have been successful in slowing the advance of China’s equipment for semiconductor chip production. Chinese players have been increasingly cut off from a global industry where customer-client interaction is essential. The US and its allies should continue with the controls and subsidies they have in place but expanding them further, as some advocate, would be excessively punitive.
Topic:
Science and Technology, Economy, Exports, Industry, and Competition
Political Geography:
China, Asia, and United States of America

69. Techno-Geopolitics and US Support for India’s Quantum Ambition

Author:
Vibhanshu Shekhar
Publication Date:
11-2023
Content Type:
Special Report
Institution:
East-West Center
Abstract:
US support would plug an important gap in India’s quest for quantum tech—access to a robust quantum ecosystem. This access is essential for the development of quantum research and technologies in India.
Topic:
Foreign Policy, Science and Technology, Geopolitics, Quantum Computers, and Research and Development
Political Geography:
South Asia, India, and United States of America

70. A shared EU-US economic agenda for the world: Engagement as an imperative

Author:
Lauri Tähtinen
Publication Date:
12-2023
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs (FIIA)
Abstract:
It is time for the European Union and the United States to build a shared, positive economic agenda towards third countries. Such an agenda would build upon the bilateral relationship but not focus on it. It would still be shared, even if the parties may have distinct reasons for supporting different aspects of it. The first elements of a shared economic agenda are evident in the EU-US Trade and Technology Council projects for Jamaica and Kenya. However, the political window for further alignment between the US and the EU, as well as for European trade deals, may be closing in 2024. Future initiatives should take into account major economies such as Brazil, Mexico, and Indonesia. The entry into force of the EU-Mercosur agreement should be a high-level priority for both Washington and Brussels. The current state of the EU-US relationship is characterized by a divergence in technology, industrial policy, and environmental policy. To move onto a path of convergence, Washington must reassess its exaggerated fears regarding the regulatory power of the EU, and use the spread of European standards as a means towards shared ends.
Topic:
Environment, Industrial Policy, Science and Technology, Bilateral Relations, European Union, and Economic Policy
Political Geography:
Europe, Latin America, and United States of America