America has the best companies, the best innovators, and the best entrepreneurs in the world. As economic and national security become more about technology, we need to invest in tech innovation and R&D so that the technologies of the future are designed, discovered, and manufactured in the U.S. 

— Secretary Gina Raimondo

Introduction

American economic dynamism enabled the United States to lead the world in the 20th Century. Thanks to the strength of U.S. workers, innovators and businesses, the nation’s unmatched economic might helped fuel its military prowess and raised the standard of living for all Americans. But the 21st Century has brought new challenges to U.S. economic leadership and competitiveness, including a weakening manufacturing and innovation base, growing inequality, an evolving national security environment, and the increasing threat of climate change.

Secretary Raimondo brought a new approach to economic policy and united all the tools in the Commerce Department to enhance U.S. innovation and national security. Her mission as Commerce Secretary was to enhance U.S. competitiveness, and after four years, the United States is meeting the challenges of the 21st century and poised to lead for decades to come.

First, COVID revealed weaknesses in the U.S. innovation and manufacturing base. Semiconductor chips, for example, were invented on U.S. shores but over decades, production was outsourced to Asia, putting the economy and national security at risk. Secretary Raimondo implemented a new industrial strategy and now, for the first time, Commerce is investing $50 billion alongside industry in semiconductor production and innovation.

Because of her actions, the U.S. is now on track to go from producing 0% of the world’s leading-edge chips [in 2020] to 20% by 2030. To deliver on this new approach to innovation and manufacturing, Commerce has built new capacities across the Department. For example, building on the Department’s science and technology expertise, Secretary Raimondo recruited top semiconductor experts, cutting-edge AI talent, veteran investors, national security experts and leaders in workforce and economic development to execute the CHIPS program, develop new tests for AI, and lead regional investment strategies. And for the first time ever, the Department created a supply chain office with a world-class team performing analytics to make proactive supply chain predictions.

Second, an underinvestment in U.S. regions has led to increased inequality, preventing the U.S. economy from achieving its innovation potential. Regional inequality, income inequality, racial inequality, and gender inequality all present barriers to U.S. competitiveness. America cannot lead the world unless it taps into the full potential of all American workers, businesses and communities. Ensuring all communities have the ability to compete in the 21^st century economy required a new approach to economic development. For the first time in the Department’s history, Commerce is making investments with the required scale and scope in left-behind regions, building broadband infrastructure, and bolstering workforce training. The Tech Hubs program, for example, is providing regions outside of traditional tech centers with investments of tens of millions of dollars to help fuel them to become global leaders in industries like autonomous vehicles and quantum computing. As significantly, these investments were structured to catalyze private capital, securing upwards of $6 billion in non-Federal funding for 31 new innovation centers. Additionally, the Department has invested in company-led job training for the first time ever through the Good Jobs Challenge program.

Third, a changing geopolitical landscape has challenged long-held assumptions about the free flow of technology and the unbridled benefits of economic integration. The People’s Republic of China (PRC) in particular has used U.S. commercial technology to advance their military modernization and threaten human rights. As technology like chips and AI become as important to defense as tanks and missiles, Commerce is playing a new leading role in national security, and ensuring American innovation isn’t exploited by its adversaries. Commerce has adapted to the new national security landscape, reorganizing departments, upgrading IT systems, recruiting technical talent and supply chain experts. Under Secretary Raimondo, Commerce implemented first-of-its-kind country-wide, sector-wide controls on semiconductor technology to China, impeding the PRC’s efforts at military modernization. At the same time, Commerce is setting new rules for international trade and engagement, ensuring the United States is able to compete on a level playing field and raise global standards with partners. In a first-of-its kind international agreement, Commerce led the negotiation of the Indo-Pacific Economic Framework, where 13 nations signed on to shared supply chain priorities, climate standards and anti-corruption guidelines.

Finally, climate change threatens everyone’s lives and livelihoods — uprooting communities, wreaking havoc on businesses, and upending commerce. Under Secretary Raimondo’s leadership, Commerce adopted an all-of-Department approach to building a climate-ready nation by investing in community resilience and advanced clean energy development and accurately accounting for climate impacts in economic statistics. Communities around the country are better able to withstand and recover from extreme weather events like flooding and hurricanes.

As part of its expanded role at the forefront of U.S. economic and national security, the Commerce Department has been entrusted with an unprecedented $111 billion in one-time funding through the American Rescue Plan, Bipartisan Infrastructure Law, Inflation Reduction Act, and CHIPS & Science Act. Prior to the pandemic, the Commerce Department was the smallest Cabinet-level agency in discretionary appropriations – approximately $12 billion per year. Under the leadership of Secretary Raimondo, the Commerce Department obligated over $90 billion in one-time funding to support its expanded mission. The Department has moved at an unparallelled pace to meet the challenges the nation faces responsibly and effectively. 

Executing on the ambitious and innovative policy agenda has required significant institutional change for the Commerce Department. In addition to new capacities and modernized organizational structures, Commerce expanded engagement beyond business leaders, to ensure community groups, labor organizations and civil rights organizations have a voice in Department policy.

The investments that the Commerce Department has made over the last four years will continue to bear fruit over the next decade, but the positive results are already being realized. Spurred by the CHIPS Program, semiconductor and electronics companies have announced nearly $450 billion in private investments. Regional inequality has finally started to decline. Entrepreneurship and business formation are bouncing back after decades of stagnation. Labor force participation among working-age people is near historic highs and wages have grown the most for the lowest income quartile.

Under four years of Secretary Raimondo’s leadership, the Department of Commerce is more muscular, more effective and more influential. The agency is helping businesses, communities, and workers address the challenges and harness the opportunities of the 21st century. But the work of Commerce continues. Rebuilding America’s semiconductor manufacturing and bringing Internet access to every American will take years of continued stewardship. New grant programs to invest in America’s forgotten communities are ready to serve more. National security programs are already slowing China’s military modernization and, with additional resources, can even more effectively ensure adversaries are not hijacking U.S. advanced technology. With ongoing effective management of the programs and policies created under this Administration, the Commerce Department can continue to grow and expand as a force for American competitiveness and leadership for decades to come.