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A brand new globalization – How sensible know-how altering lives


A brand new globalization – How sensible know-how altering lives


A few months ago, South Korea announced a 10-year, $450 billion investment plan to develop one of the world’s largest semiconductor manufacturing ecosystems. Let us remember that South Korea is a country comparable in size to Spain, with a GDP and per capita income similar to ours. It is just one more sample of the avalanche of news about gigatech investments that leading countries are announcing.

We have entered an era of technological hyper-competition. The Covid has been a great time machine, which has projected us ten years into the future in digitalization, but has taken us back to 1945 in geopolitics. A Second Cold War has broken out, this time between the US and China, which will be settled in the field of high technology. A preview was Donald Trump’s veto of the deployment of Huawei’s 5G communication networks.

In 1945, a letter from Roosevelt to his scientific adviser, Dr. Vannevar Bush originated the iconic report “Science: The Endless Frontier”, which launched the technological race that has sustained North American economic and geopolitical leadership for 75 years. Just as he became president, Joe Biden also sent a letter to the presidents of the main universities in his country (including Harvard and MIT), stressing the need to relaunch American science and technology as the basis of its economic prosperity. , of their health and national security, and as an instrument to combat and mitigate major human problems (including climate change or pandemics). Next, he proposed a massive reform plan, a revamped New Deal that included a $325 billion R&D and digitization package; 50,000 million for strategic research in fields such as semiconductors, biotechnology or supercomputing; 40,000 million for new research infrastructures. And more than 100,000 for the deployment of the electric vehicle.

Biden, deep down, was relaunching a race for technological supremacy in the face of the advances of China, which, unlike the Soviet Union, puts its technology at the service of the economy, and is at the service of technology. The new age of technological hyper-competition is an age of big numbers and big bets. Suffice it to say that China intends to spend 100,000 million in R&D in the technology hub of Shenzhen. Can we imagine what level of technological intensity they will reach in that Asian Silicon Valley? Just that amount is what TSMC (Taiwan Semiconductors Manufacturing Company) has announced to update its global supply chains. The giga-investments are also palpable in the size and efforts in R&D carried out by large technology corporations, which already dominate the top of the world economy. The combined financial value of Apple and Microsoft already exceeds the GDP of Japan. The value of Tesla is close to the Spanish GDP. Amazon declares to invest 40,000 million annually in R&D (to have a reference, the R&D effort of the entire Spanish economy is only 18,000 million).

Globalization has mutated. From a model where the driving force was the outsourcing of activities for cost, we are witnessing a new globalization directed by the attraction of innovation activities. From a geoeconomic paradigm marked by market fundamentalism (“the best industrial policy is the one that does not exist”), to a new techno-nationalist paradigm, where countries compete to attract and concentrate investments in R&D and advanced industry. It is not in vain that we see countries like Germany or Italy starting talks with companies like Intel or TSMC to create local semiconductor manufacturing hubs, at a time when the US is also offering incentives to Samsung or TSMC to set up chip factories in Texas. Biden’s Chip Act contemplates aid of 53,000 million dollars for the research and production of chips in the US. Let us not forget that a semiconductor factory is a large facility, comparable to a nuclear power plant, that requires investments of around 20,000 million, and that manufacturing companies are going to locate where they find better institutional quality, innovative talent, favorable taxation and incentives . to R&D. An underground competition is developing for the attraction of gigafactories of semiconductors, or electric batteries, to advanced economies. These gigafactories will determine the new industrial geography of the coming years, and will guarantee the prosperity of the territories that host them for several decades.

Europe must be the third agent in the game, between the US and China; and is aware of it. The Next Generation funds represent a massive proposal for digital and ecological transformation. Thierry Bretón, European Commissioner for Industry, proposes that Europe reach 20% of the world’s semiconductor production in 2030. Europe has some of the most innovative economies on the planet (such as Germany), and can play the league of sustainability: the economy of the future will be sustainable or it will not be.

In this context, this November we have known the latest R&D statistics for the Spanish economy, corresponding to 2020. Although we have gone from 1.25% to 1.41% in R&D over GDP, this progress is due more to the fall in Spanish GDP due to the pandemic (around 11%), than to the increase in investment (only 1.3%). We are growing in the index more by reducing the denominator, by destroying non-innovative productive activity, than by growing the numerator. Figures that seem very worrying to us, especially when we see that leading countries such as Israel reach 4.9%, South Korea 4.6%, Germany 3.2%, or the OECD average is 2.4%, and all, as we have seen, rearm with new and vertiginous investments. The next generation funds are a great hope. Don’t let us down.

Ametic Reflection Group


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