The Great Rebuild: America’s Second Industrial Policy

With over $635 billion in U.S. manufacturing investments announced since 2022, America’s shift toward industrial policy has reshaped its economy. Yet, labor shortages and bureaucratic roadblocks threaten to stall what advocates call a new era of domestic manufacturing dominance. The stakes—spanning global competitiveness, clean energy, and national security—could upend decades of economic orthodoxy.

The numbers are striking: more than $635 billion in new U.S. manufacturing investments announced between 2022 and 2025, much of it fueled by federal industrial policies like the CHIPS and Science Act and the Inflation Reduction Act (IRA). According to Atlas Public Policy, EV and battery manufacturing alone accounts for $208.8 billion of this total, creating an estimated 240,000 manufacturing jobs. Semiconductor giant Intel, another beneficiary, has pledged more than $100 billion to U.S. operations, aided by CHIPS Act incentives. Federal policymakers argue this intervention will restore American leadership in critical industries, from clean energy to semiconductors.

Yet, the grand vision is colliding with the stubborn realities of implementation. Permitting delays for critical infrastructure projects now average five years, according to the Harvard Business School’s Institute for Business in Global Society, marking a key bottleneck in rolling out investments. Workforce shortages add another layer of complexity. A report from the Semiconductor Industry Association projects that 67,000 semiconductor jobs—nearly 60% of the sector’s anticipated workforce growth through 2030—risk going unfilled.

The financial incentives underpinning this revival are unmistakable. Federal subsidies, grants, and tax credits under the IRA and CHIPS Act total in the hundreds of billions, channeling private capital toward factories in Arizona, Ohio, and Texas. Economist Joseph Stiglitz summarized the broader shift: “The absence of those chips showed America was not resilient in the pandemic.” But this flood of capital requires corresponding infrastructure, labor, and materials—all of which suffer from decades of underinvestment in domestic capacity. The Department of Energy notes that U.S. manufacturing capacity for lithium-ion batteries sits at just 60 GWh compared to 1,200 GWh projected by 2030.

Businesses are feeling the strain. "Our inability to build quickly is a major problem," a renewable energy sector investor told the Harvard Business School report. Lengthy permitting processes under the National Environmental Policy Act (NEPA) frequently span three to four years, with legal disputes adding costly delays to solar and wind developments. Nearly a third of solar projects and half of wind projects that undergo rigorous environmental impact reviews face court challenges, per Resources for the Future data. These delays thwart timelines for the green energy transition and U.S. competitiveness in emerging industries.

The labor constraints are equally stark. Semiconductor workforce growth alone requires an estimated 115,000 additional employees by 2030, yet education pipelines fall far short. Approximately 16,000 international master’s and Ph.D.-level engineers leave the U.S. annually, despite constituting over half of advanced engineering program graduates, according to the Semiconductor Industry Association. “We think our investments in leading-edge logic chip manufacturing will put this country on track to produce roughly 20 percent of the world’s leading-edge logic chips by the end of the decade,” said Commerce Secretary Gina Raimondo. “That’s a big deal. Why is that a big deal? Because, folks, today we’re at zero.”

This workforce gap mirrors broader cracks in America’s skilled trades. A BlackRock report estimates that infrastructure-related skilled trades—including electricians, HVAC technicians, and pipefitters—will grow 5% by 2034, outpacing the national job growth average of 3%. However, nearly one-fifth of today’s construction workforce is over 55. With multi-year apprenticeships required to train younger workers, industry veterans are aging out faster than replacements can be trained. These demographic and educational challenges compound pressures to deliver on promises of reshoring critical industries.

These hurdles do not diminish the strategic imperative behind the policies. The Biden administration’s industrial strategy seeks to reduce reliance on China, which dominates over 76% of global lithium-ion battery production capacity and remains a leader in semiconductors and clean energy technologies. Markets reliant on such foreign dominance, officials argue, are vulnerable to geopolitical shocks and supply chain disruptions. “We cannot allow ourselves to be overly reliant on one part of the world for the most important piece of hardware in the 21st Century,” said Raimondo.

For businesses navigating this new environment, time looms as the biggest uncertainty. The National Association of Manufacturers reported that 40% of large U.S. manufacturing projects funded by the IRA and CHIPS Acts were delayed or even paused due to unclear rules, supply chain costs, or weak demand. Key projects like a $2.3 billion battery storage facility in Arizona and a $1 billion solar factory in Oklahoma highlight how policy wins on paper face tangible barriers in execution.

The challenges of industrial policy also reveal a deeper tension within U.S. markets. For decades, the country relied on globalization, particularly outsourcing, to keep costs low. Reversing that trend requires untangling years of institutional disinvestment without collapsing the delicate structures of international supply chains. Permitting reform—touching federal, state, and local jurisdictions—has drawn bipartisan support, though concrete progress remains minimal. Without addressing these systemic inefficiencies, the broader goals of restoring U.S. manufacturing dominance risk falling short of their transformative ambitions.

What happens next remains unclear. In the short term, permitting reform, workforce development, and immigration policy will play critical roles in determining whether these historic investments deliver on their promises or stall amidst bureaucratic delays. Longer term, they reveal a nation grappling with the structural requirements of reshaping its economy while balancing geopolitical and environmental demands. With over $635 billion on the line—and the future of America’s global competitiveness at stake—the stakes could hardly be higher.