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The four fallacies that mean sovereign capability won’t work

Making semiconductors locally sounds reassuring at a time of global supply chain challenges. But in the modern world of complex and interdependent manufacturing it’s an empty promise.

Adam Triggs and Shiro Armstrong
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As the old aphorism goes, governments are terrible at picking winners, but losers are great at picking governments. It’s advice which many governments seem to have forgotten as they start using taxpayers’ money to build industries that are deemed to be vital.

The latest vital manufacturing industry supposedly in need of government help to build “sovereign capability” is semiconductors. Semiconductors are an essential component in electronic devices, from communications, computing and cars through to military systems, healthcare and clean energy.

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Adam Triggs is director of research of the Asian Bureau of Economic Research at the Crawford School of Public Policy, The Australian National University, and a non-resident fellow in the Global Economy and Development program, Brookings Institution. Connect with Adam on Twitter.
Shiro Armstrong is a professor and director of the Australia–Japan Research Centre at the Crawford School of Public Policy at the Australian National University.
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    Original URL: https://www.afr.com/policy/foreign-affairs/the-four-fallacies-that-mean-sovereign-capability-won-t-work-20221003-p5bmwf