The Economic Losers in the New World Order
free trade, but are at a disadvantage in a new era of aggressive industrial policy. Industrialized nations such as the U.K. and Singapore lack the scale to compete against the biggest economic blocs in offering subsidies.
Emerging markets such as Indonesia, which had hoped to use its natural resources to climb the economic ladder, are also threatened by the shift. Intel has been offered $11 billion in subsidies from the German government to build two semiconductor plants, in what Prime Minister Olaf Scholz called the largest foreign direct investment in German history. The pledged government financing is substantially more than the annual budget of Singapore’s Ministry of Trade and Industry.
“Let me tell you plainly: We cannot afford to outbid the big boys," deputy Prime Minister Lawrence Wong told supporters at a recent political rally. For many tech companies nurtured in the U.K., growth lies elsewhere. British battery-technology startup Nexeon, which developed its technology near Oxford, helped by government funding, raised over $200 million last year.
Its first commercial factory will be in South Korea, likely followed by a plant in North America. “But not the U.K., sadly," said Scott Brown, Nexeon’s chief executive. Nexeon doesn’t see that changing without more government support for the battery industry.
AMTE Power, one of the U.K.’s few homegrown battery manufacturers, has said it may rethink plans to locate a proposed $200-million-plus factory in Scotland given the difference in subsidies on offer in the U.S. and Europe. Arrival, an electric-vehicle startup, said last year it wants to focus its manufacturing in the U.S.
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