💪 For energy-rich but capability-poor regions, powershoring can be a once-in-a-generation development opportunity.

🎯 Policymakers can also target energy-intensive industries that generate lots of spillovers, rather than those that consume lots of energy but add little to local ecosystems.

💡 Policymakers must understand their regions’ clean energy endowments and industrial capabilities, and design strategies that match both.

Key Takeaways:
⚡ Energy-intensive industries will increasingly locate where renewable energy is abundant, in a trend called powershoring.

Ricardo Hausmann
and I tackle this question in the Climate Club's latest report: climate-club.org/wp-content/u... (p40)

See more in Bruegel's Blueprint, writing with Ricardo Hausmann: lnkd.in/esFv-wJ6

With many thanks to Simone Tagliapietra and Heather Grabbe for producing a great @bruegel.bsky.social volume.

The economic winners in the energy transition will be the states and regions that develop appropriate institutions to succeed at building competitiveness in emerging clean-energy industries.

3. Companies become big by being competitive; they should not be made big so that they can become competitive. Industrial policy should aim to make companies good rather than big, by combining the right support with engineered competitive market conditions, rather than create national champions.

2. Industrial policy and competition policy are intrinsically related and mutually enhancing.

This changes how we should think about competitiveness, industrial policy and competition policy in several ways:

1. States have a role in shaping competitiveness above and beyond organic market processes, through shaping supply, demand and market conditions.

Instead, state-directed goals, engineered market structures, and policy-driven scaling of supply and demand have driven this economic progress, largely from China. In the process, China has built a commanding lead in the industries of the future, threatening European and American competitiveness.

Don't listen to Google or anyone else who tries to paint these remedies as radical. Google's conduct was egregious (paying its competitors $26 billion annually to collaborate 🤫) and its monopoly is entrenched. We need bold remedies that actually fix the problem, the the DOJ's proposals aim to do.

Some details still need to be worked out. But bold and creative remedies are needed here, and the DOJ's proposal has delivered on its mandate to fix the problem.

The DOJ recently proposed a suite of remedies, including forcing Google to sell Chrome, that would end Google's monopolistic practices and nicely reintroduce competition in search, benefitting millions of ecommerce entrepreneurs around the country.

Ecommerce brands can spend 15-20% (and up to 40% depending on their stage of growth) on digital ads, often representing all their profit margin. As you often hear from people in the tech industry, if you control distribution, you control the market.