Vance slams globalization for hampering American innovation
Vice President Vance defended the Trump administration's push for technology innovation despite any risks in a Tuesday speech to entrepreneurs and venture capitalists, arguing globalization has stifled this mission over the past several decades.
"Our workers, the populists on the one hand, the tech optimists on the other, have been failed by this government. Not just the government of the last administration, but the government — in some ways — of the last 40 years, because there were two conceits that our leadership class had when it came to globalization," Vance said during his keynote address to the American Dynamism Summit.
Vance argued the first conceit of globalization — describing the interdependence of the world's economies and services — was the assumption the U.S. would be able to separate the manufacturing of products from their design process.
"The idea of globalization was that rich countries would move further up the value chain while the poor countries made the simpler things," he said, adding later, "But I think we got it wrong. It turns out that the geographies that do the manufacturing get awfully good at the designing of things."
The vice president described how design firms work with their manufacturing partners and often share intellectual property, practices and sometimes employees as a result.
"Now, we assume that other nations would always trail us in the value chain. But it turns out that as they got better at the low end of the value chain, they also started catching up on the higher end. We were squeezed from both ends," he said.
The second conceit, Vance argued, was the idea that cheap labor is a positive thing for innovation.
"Cheap labor is fundamentally a crutch, and it's a crutch that inhibits innovation," the vice president said. "I might even say that it's a drug that too many American firms got addicted to now."
Vance, a former venture capitalist, has served as one of the Trump administration's main messengers of technology policy.
Tuesday's address built off his speech at the Artificial Intelligence Action Summit in Paris last month. Vance on Tuesday echoed his push against excessive regulation, arguing tech companies must be able to "build, build, build."
"Our goal is to incentivize investment in our own borders, in our own businesses, our own workers and our own innovation," Vance said. "We don't want people seeking cheap labor. We want them investing and building right here in the United States of America."
The vice president also took aim at deindustrialization, stating it poses a risk to both America's national security and workforce.
"It's important because it affects both, and the net result is dispossession — for many in this country — of any part of the productive process," he continued. "And when our factories disappear and the jobs in those factories go overseas, American workers are faced not only with financial insecurity, they're also faced with a profound loss of personal and communal identity."
The Trump administration has made clear it wants to bring jobs and production back to the U.S., especially as foreign competition in the technology space ramps up.
Shortly after being sworn into his second term, President Trump repealed former President Biden's 2023 executive order that placed guardrails on artificial intelligence (AI) innovation and signed an executive order to roll back any policies that “act as barriers to American AI innovation.”
Vance acknowledged the persistent concerns over AI technology taking the jobs of Americans but argued the technology might not have as much of an impact as people assume.
He used the example of the ATM, which at the time was feared to replace bank tellers.
"In reality, the advent of the ATM made bank tellers more productive, and you have more people today working in customer service in the financial sector than you had when the ATM was created," he said. "Now they're doing slightly different jobs."
"We shouldn't be afraid of artificial intelligence and that, particularly for those of us lucky enough to be Americans, we shouldn't be fearful of productive new technologies," Vance added. "In fact, we should seek to dominate them, and that's certainly what this administration wants to accomplish."
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