The neoliberal era of hands-off governance has officially been replaced by the return of industrial policy. From semiconductors to renewable energy, the state is once again picking winners and providing the capital necessary to secure supply chains. This is a recognition that economic efficiency must sometimes be sacrificed for national security and resilience.
Securing the Technology Stack
The race to domesticate chip manufacturing is the clearest example of this new reality. Nations are realizing that dependence on a single geographical point for their most critical components is an unacceptable strategic risk. The resulting subsidy wars are distorting markets, but they are also building the infrastructure for the next industrial revolution.
The End of Globalized Production
We are moving toward a world of regionalized trade blocs where proximity is valued over price. The focus is now on friend-shoring and near-shoring, ensuring that production remains within reach during times of crisis. This transition will be expensive and inflationary, but it is the price being paid for a more stable and predictable global economy.