Earlier this week, President Joe Biden visited the Brookings Institution to reflect on the state of the U.S. economy as he exits office. The speech touched on many items, from health care to taxation to trade. But perhaps the accomplishment President Biden talked about most was how “Bidenomics”—most notably, the CHIPS and Science Act and Inflation Reduction Act—had succeeded in deploying public dollars and incentives to “crowd-in” private investment in critical strategic sectors such as clean energy, batteries, and semiconductors.
However, while these initiatives have spurred significant momentum, their future remains anything but certain. The investments celebrated as pillars of Bidenomics face a precarious road ahead, as President-elect Donald Trump has signaled intentions to dismantle or significantly alter many of these programs. This potential rollback underscores the fragility of progress in strategic sectors, and make the Biden administration’s achievements as much a target as they are a triumph.
This week’s speech suggests that President Biden is keenly aware of this dynamic. At several points, he noted that the new factories and megaprojects his administration spurred on were disproportionately being sited in Republican districts.
“Consider one fact,” the president said. “The historic investments we made went to more red states than blue states. Not a politically smart thing to do, and I knew what I was doing. I knew people would be angry. Will the next president really stop an electric battery facility in Liberty, North Carolina? Will he shut down a new solar factory being built in Cartersville, Georgia?”
President Biden is clearly hoping that the prospect of economic benefits in “red” districts will outweigh the political gains of rolling back key aspects of his agenda. So, how significant is this dynamic?
To start, the United States is experiencing a surge in private investment in “strategic sectors,” which we define as clean technology, semiconductors and electronics, biomanufacturing, and other advanced industries. Private investors have announced $769 billion in strategic sector investments, as tracked by two sources: 1) the MIT-Rhodium Group’s Clean Investment Monitor for clean technology investment; and 2) the White House’s Investing in America inventory for microelectronics and advanced manufacturing investments.
Do the data back up President Biden’s assertion that more of these factory announcements are being made in places that voted for Donald Trump in 2024? Our analysis finds that counties that voted for President-elect Trump account for about 37% of national gross domestic product (GDP) but have received over 73% of announced private strategic sector investments since 2021—over twice their share of economic output.
Importantly, private companies are making these decisions—not the government. Manufacturers are favoring production sites located in smaller cities and exurban communities, which provide investors (and their employees) access to valuable factors that are becoming scarcer in denser urban cores, such as land and affordable housing. There is nothing causal about the relationship between politics and investment decisions. Rather, this pattern reflects the fact that smaller communities with plentiful land, energy, and affordability tend to be more conservative than larger central cities.
In any event, the data suggests that President Biden’s approach to fostering private investment through public incentives is poised to deliver substantial economic benefits to communities that traditionally lean conservative. By targeting strategic sectors, these investments have the potential to reshape local economies, creating jobs and driving growth in areas that previous administrations often overlooked. Yet the question remains as to whether these gains will translate into lasting bipartisan support for such policies—or whether political polarization will override their tangible benefits.
As the next administration takes shape, the stakes are high. Will the economic progress Bidenomics drove withstand potential policy reversals? Or will the fragile consensus surrounding these strategic investments unravel? The answer may hinge on whether the communities reaping these benefits recognize the value of these programs—and whether their political leaders choose to prioritize economic opportunity over partisan rhetoric. What is clear is that the future of U.S. competitiveness in clean technology, semiconductors, and advanced manufacturing hangs in the balance.
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