U.S. Should Strengthen, Not Constrain, Its Most Integrated and Innovative Companies
AP

Leadership in critical technologies such as artificial intelligence, quantum computing, semiconductors, robotics, advanced materials, biotechnology, and aerospace will determine who leads the world economically and strategically in the decades ahead. These technologies spur productivity gains, provide supply chain resilience, and shape military strength that sustain national security and prosperity.

At the moment, however, the United States is no longer ahead in many of these fields. The Australian Strategic Policy Institute reports that China now leads in 57 of 64 critical technologies. Studies by the Information Technology and Innovation Foundation and others have found China advancing in robotics, batteries, quantum communication, and advanced materials. These gains are not accidental. They reflect Beijing’s deliberate effort to integrate research, manufacturing, and state financing into a single system that can move from idea to global scale faster than market-driven rivals.

In addition to innovation from entrepreneurs and start-ups, one of the defining features of America’s past success has been the rise of vertically integrated companies that design, build, and distribute under one roof. From the early days of computing to today’s clean energy, aerospace, and healthcare industries, these companies have provided the scale, speed, and reliability that have helped give the United States its global competitive edge.

Unlike China’s state-directed approach, America’s integrated companies compete, collaborate, and innovate in open markets. They link invention to production and connect the nation’s research universities, engineering talent, and industrial capacity, thereby enhancing America’s global competitiveness.

They also expand opportunity at home. Their national scale and infrastructure lower costs and broaden access for consumers, reaching underserved and remote communities with essential goods and services such as prescription drugs, broadband internet, and clean energy. Their wide distribution networks and operational reach drive consistency and reliability, ensuring that critical products remain available even in times of crisis or disruption.

In addition, these companies enhance American economic stability. Their size allows them to make long-term investments in research and development that smaller firms often cannot afford. They can take risks and absorb failures that would otherwise end a smaller business, turning ambitious ideas into real-world solutions that define entire industries.

Integration can also enhance the resilience of supply chains. Companies that coordinate production across multiple stages can anticipate and manage disruptions, keeping shelves stocked and essential services running during emergencies, natural disasters, or geopolitical shocks. This operational depth proved vital during recent supply chain crises, when firms with integrated operations were among the first to recover and resume output.

“Friend-shoring” amplifies these strengths. By partnering with trusted allies such as Japan, Canada, and the European Union, American companies can diversify and secure supply chains while maintaining shared standards and values. This approach extends American resilience outward, building a network of reliable and compatible producers rather than dependence on rival nations.

Some critics argue that large integrated firms risk stifling competition. Yet scale and integration do not automatically mean monopoly, particularly in global markets where the United States competes against state-backed giants. In many cases, integration enhances competition by allowing U.S. firms to innovate faster, produce more efficiently, and export at scale.

That is why legislation that could unintentionally limit legitimate integration deserves careful scrutiny. Efforts to impose overly strict restrictions on mergers or ownership structures could weaken the very systems that allow the United States to compete with China and other technologically ambitious nations. Limiting the ability of American firms to combine complementary capabilities or manage connected supply chains would risk fragmenting industries that rely on scale and coherence to succeed.

Instead, policymakers should support responsible integration. Washington can strengthen domestic value chains, fund shared research and testing facilities, promote open technical standards, and modernize export controls and workforce programs to reinforce entire technology clusters rather than isolate individual firms. These steps would align private investment with national priorities, allowing firms to collaborate and scale faster while keeping innovation rooted in the United States. By building the infrastructure and standards that support coordinated growth, Washington can help turn individual corporate successes into national industrial strength. 

America’s strength has always come from combining competition with coordination and scale with openness. Vertically integrated companies often embody that balance. They can innovate quickly, invest deeply, operate reliably, and deliver lower costs, broader access, and stronger supply chains for consumers.

A century ago, firms like Ford, RCA, and Bell Labs transformed the economy by uniting invention and production. The challenge today is to modernize that model for a world shaped by quantum computing, robotics, and artificial intelligence. China’s state-led industrial system is working to dominate emerging technologies, set global standards, and command the strategic supply chains of the future. However, if the United States continues to empower its integrated companies, while working closely with allies to secure resilient supply chains, it can sustain the coherence, innovation, and reach needed to lead the industries of the future.

Daniel Bob worked on Indo-Pacific foreign, trade, and economic policy in the U.S. Senate Finance Committee and House Foreign Affairs 

Committee.