In a large room in the West Wing of the White House is the important Office of Science and Technology Policy (OSTP). With more than 140 PhDs, experts in artificial intelligence, robotics, supercomputing or biotechnology, the OSTP gives North American technology policy a strategic perspective and places it very close to the highest executive power: the presidency. The office is headed by Dr. Arati Prabhakar, an engineer with extensive executive experience. Prabhakar was director of the Darpa agency (Defense Advanced Research Projects Agency), considered "the mind of the Pentagon." Darpa works on bold moonshot initiatives, with elite teams undergoing disruptive challenges. Thus, basic research becomes engineering and real solutions, many of them futuristic.
The importance of Darpa in shaping the modern economy and society is beyond doubt. Created in 1958, as a strategic response to the launch of the first satellite (Sputnik) by the Soviets, Darpa brought together the best scientific minds from the Manhattan project (now in fashion with the Oppenheimer movie). From Darpa came the first drones, processors, GPS or the internet itself. A competition organized by Darpa in 2004 in the Mojave Desert launched the race for the self-driving vehicle. With the injection of 25 million in 2013 in a young startup called Moderna, Darpa was fundamental in the development of messenger RNA (mRNA) technology, which made it possible to manufacture the vaccine and overcome the covid pandemic in record time.
The American technology industry would not exist without the Office of Science and Technology, or without agencies like Darpa or NASA. Without them, there would be no Google, no Tesla, no Apple, no Intel. The technological power of the US is not due only to the Zuckerbergs, Musks or Gates, young and brilliant entrepreneurs with a hacker spirit. It is due to the prior consolidation of powerful applied knowledge platforms, sponsored by the strategic leadership of the government.
Today we realize the huge mistake made. While the US lowered its guard and Europe embraced neoliberal dogma (no decision was the best decision: the market would decide), a silicon belt was rising in Asia, as electronic chips became the building blocks of the digital economy. Chips were used everywhere: communication systems, mobile phones, household appliances, medical devices, cars, industrial robots, or critical infrastructure. Also in defense and security systems: the Eurofighter planes or the Leopard tanks that Europe sends to Ukraine would be useless coffee makers without chips. Billions of chips are made every year, but Europe (and to some extent the US) have lost control of this technology.
It is not easy to compete in chips. The most critical value chains on the planet are guided by technological laws, which has implications for management decisions. The silicon industry is undergoing rapid technological change, explained in the famous Moore's law: whoever wants to play in the sector must double the capacity for integrating devices every two years. But the law of diminishing returns also works in R D: with equal effort, the results are progressively smaller. For this reason, maintaining Moore's law requires huge investments in R D and machinery, within the reach of very few. Finally, the logistic density of the chips determines the location of the facilities: their economic value is so high that filling an airplane with them does not affect the price. They can be manufactured in a single, centralized location and exported all over the world. And since they do not depend on natural resources (silicon is nothing more than beach sand), factories can be located anywhere on the planet that offers stability and access to fundamental resources: capital and frontier knowledge. Any place that bets on chips.
That is why the West Wing dictates strategy once again: the US aggressively recovers its production capacity for electronic chips and reactivates its industrial policy mechanisms. Europe wakes up, between frightened and sleepy. Germany announces a new effort of 20,000 million in its semiconductor ecosystem. Asml, the Dutch occult champion supplier of the light that allows chips to be engraved on the nanometer scale, limits its sales to China for reasons of national security. China reacts by strangling its germanium and gallium exports. The war for chips intensifies. How to make the best minds and the best industry stay in Europe?
If in the 19th century, with the railways and electricity, critical infrastructures were built that guaranteed economic development in the following decades, today superclusters of RD and advanced manufacturing are being built that will mark the geography of prosperity in the coming years. And we? The question is no longer what we have done with the Next Generation. The question is what we will do when they are gone.
