Supply Chain Bottlenecks Taking a Toll on U.S.

Written by Jennifer Clark
Posted June 9, 2021

The time for change and innovation is now. 

This past year with the coronavirus pandemic has been a tough one. Many businesses in a variety of industries have felt the strains of the pandemic. There have even been some businesses that have shut their doors and then there are others that are still struggling to get back on track. The pandemic has created supply chain bottlenecks, which have caused shortages throughout a range of industries and products. This problem has prices surging for consumers and it has the government and companies taking the time to re-evaluate what is working and what isn't. 

Inadequate supply of lumber has had a significant impact on the housing market which has led to a surge in prices. A reduction in semiconductor chips has slowed down both the automotive and technology industries. Even the medical industry has been hit by these supply chain bottlenecks and has been experiencing a shortage of active pharmaceutical ingredients. Shortages drive up prices because the demand becomes greater. 

Not to mention, it gets extremely worrisome when someone can’t get medicine because of a lack of active pharmaceutical ingredients. Some peoples’ lives depend on certain medicine and not being able to receive or pay for it can mean life or death for a person. However, these issues are not being ignored. The Biden administration appears to not only begin fixing the current issues but it's ensuring that future issues and shortages won't happen again. So how is this Biden administration going to get this done?

This week the White House is taking action and has unveiled a plan that will help the U.S. heal from these bottlenecks in supply chains and product shortages. President Joe Biden announced that it will first begin with forming a task force that will address the shortages of semiconductors, pharmaceuticals, critical minerals, and batteries. 

This task force will be led by Secretaries of Agriculture, Commerce, and Transportation. According to the White House, the Department of Health and Human Services, the Department of Energy, and the Department of the Interior are expected to work with the administration to work on easing the supply-demand imbalances that are happening right now. These departments will have their own duties to assist with understanding, tracking, and sharing information between government and private entities to bring awareness and to reduce any risks.

This is just the initial stage of trying to solve these issues. The administration doesn’t want to just find a quick or temporary solution; it is looking to improve supply chain efficiencies for the long term — and it’s about time. Recently the Department of Labor announced that in late June more than $100 million in grants for state-led apprenticeship programs will be available, and the Department of Energy will promote and encourage the manufacturing of new innovations in the U.S. This has been a long time coming. 

The attention and funding to these kinds of innovations and projects to better improve supply chains and to bring some of the supply within the U.S., or making partnerships with allies, could greatly improve the future of the U.S. The U.S. is aiming to take out the risk of unfair international trade practices. The task force led by the U.S. Trade Representative will focus on enforcing actions against unfair trade practices committed by other countries along with seeking opportunities that will help strengthen trade relationships and supply chains with U.S. allies

Another long-term focus that the Biden administration has is to boost domestic production. Biden has recommended that Congress spend at least $50 billion on researching, developing, and manufacturing critical semiconductors within the U.S. Technology that we use today — vehicles to kitchen appliances — and for the future will include chips and a shortage could have a detrimental effect on Americans. 

It’s about time that there is some serious focus on reducing the dependency that the U.S. has on other countries and their supplies of crucial technology. If domestic production receives a boost that would mean the U.S. could become a significant supplier of semiconductors and other innovative technologies and it could pave a way where these types of supply chain bottlenecks are significantly reduced. 

This is the time for the U.S. to invest in the future of the country. The Senate is expected to pass the so-called Innovation and Competition Act of 2021. It appears that it has support from both Republicans and Democrats. The proposal so far includes:

  • $52 billion to support domestic semiconductor manufacturing
  • Authorize $81 billion for the National Science Foundation from fiscal 2022 to fiscal 2026
  • Authorize $16.9 billion for the Department of Energy from fiscal 2022 to fiscal 2026 for research and development and energy-related supply chains in key technology areas

Senate Majority Leader Chuck Schumer (D-NY) had this to say about the Act:

This bipartisan legislation will be the largest investment in scientific research and technological innovation in generations, setting the United States on a path to lead the world in the industries of the future. It will be one of the most important things we’ve done in a very long time, the largest investment in scientific research and technological innovations in generations, decades.

The time to innovate is now, especially when it comes to technology. The U.S. has sat back far too long and it needs to reduce the dependency it has on other countries for future technological innovations. It’s time we step up and become a part of the innovation.

Until next time, 

Jennifer Clark

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