As Prepared for Delivery

I. Introduction

Thank you, Robyn, and thanks to the City Club of Cleveland for hosting me.  I’m happy to be here today to talk about an American industrial strategy.

About six months ago, I posited that it was long past time for America to embrace a modern industrial strategy.

At its core, the idea is a simple one: strategic public investments are essential to achieving the full potential of our nation’s economy.

It’s also an idea as old as America itself.  Alexander Hamilton, our first Treasury Secretary, insisted that “the public purse must supply the deficiency of private resource” to “prompt[] and improv[e] the efforts of industry.”

Today, I’m thrilled to be in Cleveland to renew that vision.  Cleveland’s economic story exemplifies a basic truth: government, industry, and labor, working together in partnership, can unlock extraordinary economic potential—and by doing so, unlock economic opportunity for families and communities.

Two centuries ago, when America built the Erie Canal—America’s first superhighway—Cleveland was suddenly connected to global commerce.  President Lincoln then empowered states to invest directly in their people and their local industries, by using federal lands to establish land-grant colleges—which brought us the Ohio State University and Central State University.

Cleveland soon became a vital railroad transportation hub, with booming industries from oil to steel.  That industrial strength fueled further innovation.

Cleveland was home to the first public square illuminated by electricity, the first electric streetcar, and the first electric traffic light—which is fitting, since Thomas Edison was born nearby.  A Cleveland automaker made the first car to cross the country coast to coast.  Another Cleveland automaker pioneered some of the earliest electric vehicles a century ago.

America invested in Cleveland, and across Ohio.  In return, Ohioans innovated, expanded, and generated benefits for all of America.

And when American policy turned away from that proud tradition, places like Cleveland bore the brunt.  Starting in the early 1980s, the embrace of trickle-down economics led to decades of neglect of these engines of innovation.  What followed was decline in our nation’s industrial and technological-innovation capacity.  And as we disinvested, other countries—most notably, China—raced ahead, investing in infrastructure, manufacturing, and emerging technologies.

These trends pose a clear threat to America’s economic and national security.

But the good news is that, today, a fundamental change is happening in Ohio and across America. I’m here to talk about how that is no accident.  Thanks to President Biden’s leadership, we’re embarking on a new chapter—and making the most significant public investments in decades in America’s industrial capacity.  We are reviving a uniquely powerful tradition that Cleveland embodies, rebuilt for a new era.

II. President Biden’s Modern American Industrial Strategy

Over the last year and a half, President Biden worked with Congress to enact four foundational laws: the American Rescue Plan, which brought our economy back from the brink, and more recently the Bipartisan Infrastructure Law, the CHIPS and Science Act, and the Inflation Reduction Act.

There’s a strong animating vision that unifies these laws: a modern American industrial strategy. 

Here’s what a modern American industrial strategy does.  It identifies areas where relying on private industry, on its own, will not mobilize the investment necessary to achieve our core economic and national security interests.  It then uses public investment to spur private investment and innovation. 

It means that—rather than accepting as fate that the individualized decisions of those looking only at their private bottom lines will put us behind in key sectors—we engage in strategic investment in those areas that will form the backbone of our economy’s growth over the coming decades, areas where we need to expand the nation’s productive capacity.  

A modern American industrial strategy does not react to the potential for underinvestment by seeking to replace or push aside the private sector: it uses public investment to crowd in more private investment, and make sure that the cumulative benefits of this investment strengthen our national bottom line.  It encourages that investment to reach all regions and communities.  And it invests in workers—the people who will generate all this productivity and innovation.

This is not about having government pick winners and losers.  Our approach is different.  Our modern American industrial strategy reflects a commitment to make bold investments in key areas that everyone, from academics to business leaders alike, agrees are foundational to economic growth.  These investments help accelerate and shape breakneck innovation, and they encourage private investment and market competition in a way that picks only one winner: the productivity, opportunity, and standard of living of the American people.  

The first area is transportation infrastructure.

Infrastructure literally lays the groundwork for private investment.  Businesses can move goods to market more efficiently.  Supply chains can operate more reliably.  Workers can connect with more places and higher-productivity jobs.

And today, we’re laying that groundwork at a historic scale. 

Our industrial strategy is making a larger investment in our infrastructure than President Eisenhower’s interstate highway system.

The second area of broad agreement is technological innovation.

Public investments in research and innovation power the private engine of the American economy.  They keep America on the cutting edge—especially when connected to manufacturing, because of the strong feedback loops between the research lab and the factory floor.  A nation that cedes its manufacturing capabilities risks ceding its technological leadership as well.

For decades, we have been ceding that ground.

But now, with our industrial strategy, we’re making a larger investment in innovation than even President Kennedy and the Apollo program that took us to the Moon.

We’re committing to the largest five-year investment in research and development in history.

We’re connecting all of America to the digital economy by expanding high-speed internet access. 

And we’re opening doors of opportunity by investing in STEM education and training at schools and universities nationwide, as well as on-the-job training like registered apprenticeships, which build a skilled, diverse workforce. 

And the third area is clean energy.

Globally, the transition to a zero-carbon economy may be the greatest economic transformation since the Industrial Revolution.  It will affect not only how we produce and consume energy, but how we move and live.

We know the climate crisis cannot be addressed by market forces alone.  We know public leadership and investment is key to the solution.  And yet for decades, our country stood by.

But now, with our industrial strategy, we’re making the largest investment in clean energy ever in our nation’s history.

By providing long-term incentives, we’ll encourage the private sector to invest at massive scale.  Coupled with regulations that give investors certainty, this plan will spur mature technologies to deploy more quickly, pull emerging innovations to market faster, and reduce greenhouse-gas emissions faster than at any time in our history.  As industries develop, it will reduce energy prices for families and create high-quality jobs for workers.

Far from supplanting markets or crowding out private investment, foundational investments in these three areas—infrastructure, innovation, and clean energy—will crowd in private investment at historic scale.

Indeed, we estimate that the aggregate investment from President Biden’s legislative strategy, including both public capital and private investment, will total some $3.5 trillion over the next decade.

That number may sound diffuse or distant.  So let me make it more concrete.  In just the last few months:

• Intel broke ground on a $20 billion semiconductor complex outside Columbus.

• General Motors committed nearly $1 billion to make electric-vehicle components, with UAW workers, at its factory in Toledo—and has committed to scale a lithium-ion battery factory in Youngstown.

• First Solar committed almost $200 million to upgrade and expand its three solar-panel factories around Toledo.

• Ford committed $1.5 billion for its Avon Lake assembly plant, just outside Cleveland, adding nearly 2,000 new union jobs.

• And just this week, Honda and LG announced plans to invest up to $4.4 billion in an electric-vehicle battery plant in Fayette County, and a further $700 million retooling Honda’s existing Ohio facilities to manufacture electric vehicles.

This is just in Ohio.  I could go on, and on.  Companies across the nation are investing in manufacturing in the industries of the future.

This is the dynamism our industrial strategy is helping unlock: the crowding-in of private capital, the resurgence of American manufacturing, the re-shoring of supply chains, and the strengthening of our industrial base.  This is not the future tense.  It’s happening right here and now. 

III. The Imperative for an Industrial Strategy

And it’s happening at a crucial economic moment.

We face a complex set of global economic challenges.  The serial shocks from the pandemic, supply-chain disruptions, and Putin’s war.  Global inflationary pressures, inequality, competition with China and other countries, a widespread reassessment of globalization, and uncertainty about America’s productive potential.

Even as we grapple with the immediacy of these challenges—including our urgent work to bring prices down for American families—behind them is a central question:  Can the United States come through this post-pandemic transition stronger, more dynamic, and with a higher-growth potential and broadly shared prosperity?  Or do we risk slipping back into a pre-pandemic equilibrium of low investment, low growth, broadening inequality, and ceding our competitive edge?

Suppose you wanted to design the best antidote to this scenario—the best answer to those who believe that we risk lower productivity and lower economic capacity in the years ahead.

You’d look to strategic, long-term investments in areas with the highest returns for our economy’s productive potential.  You’d look to places where public capital could help expand supply capacity and reduce price pressures.  You’d look to areas of growing global demand, where America could gain a competitive edge and increase exports.

In other words, you’d look for a modern American industrial strategy.

In this context, Secretary Yellen’s emphasis on the “modern supply-side” in describing our economic strategy is apt.  And here, we’re seeing an emerging bipartisan consensus around a more explicit government role in America’s industrial development.

As Senator Todd Young of Indiana recently put it: “It’s really important not only to our national security but to our economic security and our very way of life that we have effective and at times energetic government.”

At a moment when some claim that America is too divided, and that democracy can no longer deliver effective results, our industrial strategy is showing we can come together and invest in ourselves and our future.

IV. Executing an Industrial Strategy

As we look forward, our focus will turn to the hard work of executing this modern industrial strategy.  I want to focus on three key elements of our execution plan:

A. Deploying New Tools and Fresh Approaches

First, we will use public investment in new ways.

The path from research and development to production to commercialization—from lab to fab to market—is often long and twisting.  Our modern industrial strategy will use an array of tools to accelerate that process in new ways.

Let me offer an example: clean hydrogen.  

A scalable hydrogen economy poses a series of collective-action challenges that make traditional, siloed approaches to energy infrastructure incomplete.  It requires cutting-edge innovations, industrial uses, large-scale production, massive infrastructure investments, and available consumers simultaneously.

Traditionally, public investment has focused on subsidizing production—like building a hydroelectric dam—or distribution—like building transmission lines.  We’ve now done that for hydrogen, with long-term tax credits that make it more attractive for companies to invest in production.

But that alone may not be enough to capture the full opportunity at sufficient scale and speed.  So we’re launching a novel national collaborative effort: hydrogen “hubs.”  These hubs will build regional networks of producers, distributors, end users, and others—to do demonstration projects at scale. 

This scaled collaboration across the hydrogen supply chain will be critical to building capacity and solving this collective-action problem.  It could position the U.S. to lead the world in providing clean, low-cost fuel to Europe and other allies.  It could even reshape other industries, like steel, making them cleaner and globally cost-competitive.

Yes, we’re incentivizing business investment through deployment-oriented tax credits.  But through these hydrogen hubs, we’re also helping industries work through their deployment hurdles.

Here’s another example: semiconductors—the chips that power everything from phones to household appliances to cars and defense systems.  Reclaiming our leadership is an economic and national security necessity.

So we’re investing in the full microelectronics supply chain to enable leading-edge technologies to be both invented and made in America.  We’re using grants and tax incentives for manufacturing.  Our R&D investments include support for prototyping and equipment, to drive collaboration across industry and researchers to design and manufacture next-generation chips.  And as we’ve already shown, we will use export controls when necessary to protect our national security and foreign policy interests.

These examples underscore how our industrial strategy could scramble old divisions.  Advancing our industrial strategy must now involve advocating for rapidly and responsibly building out next-generation capabilities.  Which leads to the next part of the gameplan.

B. A National Commitment to Building Fairly at Scale and Speed

Second, we will build.  And we’ll build at scale and speed.

Our industrial strategy is at its core a multiyear national mobilization effort.  This combined endeavor—infrastructure, innovation, clean energy—is no less ambitious than the Erie Canal, the transcontinental railroad, rural electrification, or the interstate highway system were in their time.

We’re talking about 950 million solar panels and 120,000 wind turbines by the end of this decade, billions of semiconductor-powered devices, millions of electric vehicles, and thousands of miles of fiber-optic cable and transmission lines.

The scale of this task is enormous.  It will test our country and our institutions.  And it will require reforming how we build in America.

It’s a hard fact that America has lagged other major countries—even those with strong labor, environmental, and historical protections—in building on budget and on time.

We’ll need to do things differently.  We’ll need to build a renewed capability to move fast, not only at the federal level, but with state, local, and tribal partners.  Before much of this legislation passed, I noted this could be the single hardest element of our entire effort.  And so, over the last six months, we’ve been developing a gameplan with building faster and smarter at the center.

As with any project, it starts with planning.  A better permitting process benefits everyone.  Advocates and community members want certainty just as much as developers and investors.  Our new plan will surge resources for agencies to provide that certainty by streamlining their environmental reviews and permitting processes.

We need serious accountability to measure and monitor progress in building.  Our plan is overhauling systems to track and manage projects.

We’re expanding an infrastructure program called “Every Day Counts” that helps accelerate projects, by bundling the contracting and execution of related highways or railways, not going one-by-one.  We’re using an approach called “Dig Once” to coordinate projects—so if we’re widening a road, we make broadband and electricity upgrades at the same time.  And we’re expanding the use of project labor agreements, which reduce the risk of costly delays and disruptions on complex projects by making sure they’re handled by highly skilled workers.  

In fact, today at the White House, we’re convening a first-of-its-kind summit on better project delivery with state and local partners, so we can build faster and smarter across all levels of government.

Consider critical minerals, the building blocks for many modern technologies, including electric-vehicle batteries.  There are those who doubt America is up to the challenge of developing its own upstream and midstream critical-minerals industry, an area dominated by China.  But just last week, America’s first cobalt mine opened, working with local environmental groups.  Businesses are racing to build new factories to recover lithium from California’s brines near the Salton Sea, nicknamed “Lithium Valley” for its vast resources.

As part of our plan, this month we will launch a dedicated effort around critical minerals, which will bring together new approaches to community engagement; grants and loans supporting critical-minerals extraction, processing, and recycling; and diplomatic efforts to build reliable global supply chains.

And our plan to build will focus on place and equity—on where and how we build—because this helps us unlock more of our nation’s economic potential.

Cleveland again embodies a clear-eyed view of this task.  For those escaping the Jim Crow South, industrial jobs available in Cleveland offered a beacon of hope and economic opportunity, even as they continued to face discrimination.

Among them was the great inventor Garrett Morgan.  Born in the wake of the Civil War to parents who’d been enslaved—and with only a sixth-grade education—he moved to Cleveland and started repairing sewing machines.  Eventually, he developed “safety hoods” for firefighters and traffic lights with a third signal.  We know these today as gas masks and yellow lights.

Indeed, each time our nation has embarked on a new effort to build, we’ve taken a step toward perfecting our imperfect union.  Now, this opportunity to rebuild can be an opportunity to repair.

Because building fast and building fairly don’t have to be in tension. 

Building infrastructure in every part of our country—including communities that haven’t reaped the benefits of past investments, and communities that were harmed by projects built long ago—is precisely what unlocks the productive potential of our economy.  That’s why one of the most powerful and important elements of our plan is that—for the first time—businesses get a 10 percent boost to their clean-energy tax credits if they establish projects in communities that have relied on traditional energy-industry jobs. 

We should have no illusions this will be easy.  Nor is this the job of government alone.  It will require a national mobilization and building capacity across the board.  But we’re up to the task.

C. Closer Cooperation with Allies and Partners

And third, we will meet the global moment, even as we build American strength.

Enhanced engagement with our partners abroad is a matter of economic and geographic necessity.  It’s neither feasible nor advisable for us to produce everything domestically.  We need international coalitions of reliable partners that reinforce secure supply chains and amplify our own sources of strength.

This is also a matter of geopolitical necessity.  America’s national and economic security is bolstered through strong alliances.  This is what we’ve been advancing around the world.  We’re developing a new economic framework for the Indo-Pacific region.  We’re strengthening our economic relationship with Europe.  We’re partnering with our G7 allies on global infrastructure.  We’re leading a global corporate tax agreement.

We’re also fully engaged in “supply-chain diplomacy.”  This summer, we agreed with 18 close trading partners to make our collective supply chains more secure, diverse, resilient, and sustainable against disruptions.  We’ll continue these efforts, exploring new ideas like supply-chain stress-testing to identify vulnerabilities before they become crises.

Let me be clear: this is about strategic engagement, not isolationism.

Some have raised a valid concern that countries may keep one-upping each other on ever-larger industrial subsidies, reducing their efficiency.  But the investments we’re making will pay enormous global dividends in expanding supply, speeding adoption, and driving down costs.  And for industries like semiconductors and clean energy, we’re nowhere near the global saturation point of needed investments.  We should welcome actions by most countries if they’re structured fairly and scaled appropriately.

All this building will require time and vigilance.  As Secretary Blinken has explained, to compete with China, we’ll need to make “far-reaching investments in our core sources of national strength—starting with a modern industrial strategy.”

V. Conclusion

I spoke earlier about how public investments have fueled growth and innovation in places like Cleveland, going back two centuries.

And when it comes to innovation, history can move fast.  It was here in Ohio that the Wright Brothers opened a bicycle shop that changed the world.  They made their first flight at Kitty Hawk, but they honed their craft in Dayton.  And just 66 years later, led by Ohio’s own Neil Armstrong, American astronauts launched into space on Apollo 11.

We went from a bicycle shop to the Moon in the span of a single lifetime.

America invested in Ohio, and Ohioans invested in America.

Today, history is again moving fast.  We as a nation need to keep pace.  With this modern American industrial strategy, we’re embarking on a mission America has not seriously attempted in decades.  We must meet this moment.

Participating in this endeavor should be a source of national, community, and individual pride.

For the corporate leaders here today: now that America is making these investments, I hope you will do everything you can to invest in America’s industries, workers, and communities.

America has always been a nation of builders.  Cleveland knows this as well as anywhere in America.  This city has shown the world before how an industrial strategy can work—and now we can do it again in our time.  Let’s go forward and build together.