Indian Strategic Studies: 12/11/24

11 December 2024

Policy tweaks can push private sector R&D

Sarthak Pradhan & Pranay Kotasthane

A few days ago, Apple Inc. established a wholly-owned subsidiary for research and development in India. While the company has conducted R&D in the United States, China, Germany, and Israel, it did not previously have a research base in India. This move is, undoubtedly, a welcome one. However, this initiative should not remain just one of the country’s few major industry R&D initiatives. India needs the private sector to play a much larger role in driving its technological advancement.

Currently, India underperforms in innovation. For instance, the country’s share in high-tech exports in its manufacturing basket is 12 per cent, a low share compared to 23 per cent, 22 per cent, and 39 per cent in respectively. This underperformance is not due to government neglect – government spending is in line with the income levels in the country. The primary concern is India’s in-house industry R&D, which contributes a mere 36.4 per cent to the gross expenditure on R&D, compared to 77 per cent in China and 75 per cent in the US.

Thus, to increase India's technological power, it is crucial to understand why Indian firms fall short in innovation. For instance, it is noted that Indian firms find it difficult to raise resources. Private investment as a share of India's GDP has declined. High tax rates and uncertainty stemming from sources such as lack of precision in the tax code and frequent tax changes act as disincentives for investment. The existing mechanisms to hedge against tax certainty and facilitate investments have not been effective.

Who are India’s economic thinkers of the next decade? ThePrint Intellectuals Lis

In 2018, ThePrint’s list of India’s leading intellectuals captured the zeitgeist like nothing else. Public conversation about it lasted for weeks.

This year, we bring you a new list—the intellectuals to watch out for in the next decade.

ThePrint formed a jury panel of experts to nominate a list of thinkers in the fields of geostrategic affairs, economy, social science, and political thought. Members of the jury decided the names individually and in complete secrecy.

The list of economic intellectuals spotlights figures who are reimagining India’s digital public infrastructure, exploring the intersection of caste and capitalism, championing Dalit entrepreneurship, and identifying new areas in ecological economics.

Jurors: ThePrint’s panel of jurors includes Infosys co-founder Nandan Nilekani, economist Sanjay Reddy, entrepreneur Jaithirth Rao, former Chief Economic Advisor Arvind Subramanian, and policy stalwart Montek Singh Ahluwalia.

Why defence manufacturing is still struggling to take off even after 10 years of 'Make in India'

Despite 10 years of 'Make in India' and a mandate to foreign defence manufacturers to 'make in India to sell in India', results have been disappointing. Between September 2020 and May 2022, defence-related FDI barely reached $65 mn, with no major JVs announced for the manufacture of complex weapon systems.

In line with the 2020 revised FDI rules, GoI permitted foreign OEMs to bid for defence contracts through 74% majority-held JVs with local partners. GoI expected huge FDI inflows, and that foreign OEMs would set up JVs to manufacture and sell weapon systems. Hasn't happened.

The challenge for foreign defence OEMs to manufacture here centres on three issues:

Investment While FDI cap has been raised to 74%, GoI's most preferred category, 'Buy (Indian-Indigenously Designed, Developed and Manufactured)' is restricted to 49% foreign ownership. 74% FDI is not enough. Foreign OEMs are hesitant to transfer cutting-edge weapons tech to India without 100% ownership and control.
IP challenge Policy relating to 'Buy (Indian-IDDM)' requires local partners to either purchase IP rights from foreign OEMs, or own the system-level design rights. This presents two challenges for foreign OEMs who are either unwilling to sell IP of advanced weapon systems or, in some cases, unable to sell it as IP resides with foreign govts than OEMs.
Indigenous content (IC) rule This mandates that 50% of the contract value be locally sourced. This forces foreign OEMs to restructure their global supply chains for local manufacturing, a deterrent, especially under FDI and IP restrictions.

How Bangladesh cosying up with Pakistan is a major security concern for India - Opinion

Abhinav Pandya

Amidst the persecution, atrocities, killings, and brutal suppression of minorities in Bangladesh, particularly the Hindu minority, dominating the news space in digital and print media, the most concerning development for India’s long-term security interests, ie, the growing proximity between Bangladesh and Pakistan, is eluding the adequate attention that it should receive from the security analysts and policy wonks.

Following the ouster of the Sheikh Hasina government, Bangladesh has emerged as a hotbed of Islamic extremism, intolerance, and extreme anti-India sentiments. Hindus have been attacked, and their houses and places of worship have been vandalised. Bangladeshi news channels have crossed all limits of civility in spewing venom against India, and the interim government has adopted harsh anti-India rhetoric. The bilateral ties are at their worst, on the verge of a complete breakdown. Notably, all these developments are accompanied by a spurt of unexpected and extraordinary momentum in Bangladesh-Pakistan relations. It appears like a structural overhauling and complete rejuvenation of the bilateral ties between the two.

India's textile and apparel sector story

Sanjay Kathuria, Prerna Prabhakar & TG Srinivasan

The textile and apparel (T&A) sector remains central to India's economy, contributing significantly to the Gross Domestic Product (2.3%), industrial production (13%), and exports (12%). It directly employs around 45 million people, providing livelihoods across rural and urban areas, and creates jobs for unskilled, semi-skilled, and female workers. However, despite this potential, India's T&A sector accounted for only 4.8% of global exports in 2023. The country's strength lies in its raw materials, particularly cotton, where it holds 14% of global exports. As it prepares for the future, India’s T&A industry will need to penetrate the growing Man-Made Fibre (MMF) segment, which now accounts for approximately half of global apparel trade and will continue to grow.

The global apparel industry is extremely competitive and characterised by low margins. Buyers frequently switch suppliers to secure better prices, creating a high-pressure environment for manufacturers. This dynamic is particularly challenging for Indian firms, most of which are relatively small compared to their counterparts in Bangladesh and Vietnam, where firms tend to be larger and more consolidated. India in general finds it difficult to compete on costs with these countries, which then drives a need to develop competitive advantages based on other factors, such as quality, innovation, or sustainability.

Demystifying the Climate Benefit of EV Transition in India

Shyamasis Das

Executive Summary

Battery-driven electric vehicles (EVs) hold promise for decarbonising India’s rapidly growing road transport sector. However, achieving significant emission reductions through widespread EV uptake is not a given. It hinges on the energy performance of EVs and cross-sector linkages, especially to the power sector. This paper examines the complexities of the climate impact of the transition to electric drivetrains based on a data-driven analysis that best reflects the real-world use of EVs. It offers actionable insights that call for interventions spanning policy to implementation levels to maximise the climate benefits of India’s EV revolution.

1. The Allure of Electric Mobility and the Imperative for a Reality Check

India’s economic progress is intricately linked to the expansion of its road transport network. This sector, while vital, is a significant contributor to the nation’s greenhouse gas (GHG) emissions and deteriorating air quality. EVs, heralded globally as a cornerstone of green transportation, offer a compelling solution to mitigate these environmental challenges. However, in a country where fossil fuels still dominate electricity generation, transitioning from petroleum to electrons in powering the vehicles does not automatically result in substantial emission reductions.

Chinese Aid Cannot Overcome Myanmar Junta’s Declining Finances And Morale – Analysis

Zachary Abuza

Despite being bolstered by an unprecedented degree of Chinese diplomatic and material support, Myanmar’s military has had mixed results in the past few weeks, in the face of mounting economic and fiscal challenges.

The State Administrative Council (SAC) – as the junta is officially called – has continued to suffer military setbacks that have economic implications of their own.

With the capture of Kan Paik Ti, the Kachin Independence Army (KIA) has consolidated control of the entire border with China and stepped up their offensive in the mineral rich regions.

The KIA announced that it would allow the resumption of rare-earth mining in the Pangwa-Chipwi region, now under its control.

In Rakhine, the Arakan Army captured Toungup, which prevents overland supply to Kyaukphyu from the south.

The Arakan Army have captured the military’s last posts in Ann town, home of the headquarters of the Western Military Command and a major pumping station for the oil and gas pipelines to China.

How the U.S. Can Maintain Its Military Edge Over China

Todd Harrison and Mackenzie Eaglen

The U.S. is blessed with the world’s most capable military and a network of allies and partners unmatched by any nation. It is an advantage we accumulated over generations. Yet we are taking it for granted as a growing coalition that includes Russia, China, Iran, and North Korea increasingly challenge our military might and our role in the world.

From spy balloons over South Carolina to spy bases in Cuba, China in particular is demonstrating its growing ability to hold the U.S. homeland at risk.

In the face of such threats, some in Congress seem content to settle for budget caps that arbitrarily set the level of defense spending without regard for what is needed. But continuing to let the budget dictate our strategy instead of using strategy to drive our budget will only embolden our adversaries and put our homeland at risk.

The “moat” theory of national security holds that the U.S. is well protected by large oceans to its east and west and weak neighbors to its north and south. For centuries this may have been true, but oceans are no longer a match for modern technology. Cyber threats have unlimited range, adversary satellites encircle us day and night, and drones are fundamentally changing how war is conducted. While the Chinese balloons violating our airspace in 2023 grabbed headlines, even more concerning are the mysterious drones recently flying over sensitive military and industrial sites in Virginia. These drones, with wingspans of up to 20 ft., have a relatively short range, meaning they were launched by foreign operatives or military forces in our backyard. Over 600 incidents like this have been reported since 2022.

The Fiction of Western Unity on China De-Risking

James Crabtree

With only a few weeks left in office, U.S. President Joe Biden’s administration recently launched new export bans designed to hit China’s semiconductor industry. In return, Beijing announced restrictions on critical mineral exports to the United States. These latest measures fit a pattern under the Biden administration of using narrowly targeted measures to contain China’s growing technological prowess. As President-elect Donald Trump prepares to take office in January, however, U.S. restrictions on China are likely to become far more dramatic.

The Biden administration’s approach to selectively cut economic ties to China masks a division within the West that Trump’s election victory will surely deepen. Over recent years, Washington’s closest geopolitical partners were able to labor under a happy delusion regarding their relations with China. Full economic and technological decoupling between China and the West was deemed impossible and even undesirable. Much of the policy focus was on reducing specific, narrow risks of dependency on and coercion by Beijing. To signal consensus and paper over their differences over the extent of separation, Western diplomats, including those in the United States, duly began talking about de-risking rather than decoupling.

What is Salt Typhoon? A security expert explains the Chinese hackers and their attack on US telecommunications network

Richard Forno

Cyberattacks linked to the Chinese government that compromised large portions of the American telecommunications network have the U.S. government sounding the alarm. The chair of the Senate Intelligence Committee, Sen. Mark Warner (D-VA), has called it the “worst telecom hack in our nation’s history” and noted that it makes prior cyberattacks by Russian operatives look like “child’s play” by comparison.

The complex cyberattack, carried out by a group of Chinese hackers dubbed Salt Typhoon, began as far back as 2022. Its purpose, according to U.S. officials, was to give Chinese operatives persistent access to telecommunications networks across the U.S. by compromising devices like routers and switches run by companies like AT&T, Verizon, Lumen and others.

This attack comes on the heels of reports that the FBI and Cybersecurity and Infrastructure Security Agency were assisting telephone companies with countering other China-connected compromises of their networks. The earlier hacking was part of an attack targeting people in the Washington area in government or political roles, including candidates for the 2024 presidential election.

How Conflict With China Might Play Out in the Cyber Realm

Carrie Pallardy

Earlier this year, China-linked threat group Salt Typhoon allegedly breached major telecommunications companies, potentially gaining access to US wiretap systems. The full scope of the breach remains unknown, and the hackers are potentially still lurking in telecommunications networks.

This breach is hardly the first time a group associated with China targeted critical infrastructure in the US. Jen Easterly, director of the Cybersecurity and Infrastructure Security Agency (CISA), and Christopher Wray, director of the FBI, have both been vocal about the threat China poses to US critical infrastructure.

In a 2024 opening statement before the House Select Committee on Strategic Competition Between the United States and the Chinese Communist Party, Easterly said, “Specifically, Chinese cyber actors, including a group known as ‘Volt Typhoon,’ are burrowing deep into our critical infrastructure to be ready to launch destructive cyber-attacks in the event of a major crisis or conflict with the United States.”

White House official: 8 US telecom providers hacked by Chinese

Sean Lyngaas

US officials believe Chinese hackers breached at least eight US telecommunications providers in their quest to spy on top US political figures as part of a hacking campaign that has affected dozens of countries worldwide, a White House official said Wednesday.

“Right now, we do not believe any have fully removed the Chinese actors from these networks … so there is a risk of ongoing compromises to communications,” Anne Neuberger, deputy national security adviser, told reporters.

It’s the highest public tally yet the Biden administration has given of the scope of a hacking campaign that has rattled the US national security establishment and is poised to challenge the incoming Trump administration. Officials do not believe the hackers accessed classified information, Neuberger said.

Neuberger’s remarks came as senior US intelligence officials gave a classified briefing to senators Wednesday on the Chinese hacking campaign.

The alleged Chinese hackers have gone after the phone communications of senior US political figures such as President-elect Donald Trump and Vice President-elect JD Vance, as well as senior members of the Biden administration, CNN has previously reported.

Syria: Enemies Masquerading as Friends

Amir Taheri

Almost dormant for four years, last week the volcano of the Syrian uprising erupted with a vengeance. In four days, its lava covered the country's second largest city Aleppo before moving towards central cities of Hama and Homs on its way to the capital Damascus.

The force that carried out the operation came under the label "Mission to Liberate the Levant" (Hay'at Tahrir al-Sham) but was quickly identified as a reincarnation of the Victory Front (Jabhat al-Nusra), which was the Syrian branch of al-Qaeda.

Whoever redesigned that force as a "new and improved product" wanted to achieve three goals.

The first was to transform it into something resembling a regular army with uniforms, high-quality arms and matériel, and plans for creating an administration in conquered areas.

The second aim was to distance itself from jihadism by claiming it will protect religious minorities and avoiding the usual blood-curdling jihadist rhetoric. Thirdly, it is marketed as an army of liberation whose primary aim is to drive out unspecified "foreign occupiers."

Nevertheless, the use of the label "Levant" (Sham) puts a question mark in front of the "liberating force." Using that medieval term instead of the word Syria, which jihadists have always regarded as alien because it was put in use under the French mandate, the group and its backers implicitly deny the existence of a Syrian nation-state.

What to Know About Abu Mohammed al-Golani, the Leader of Syria’s Insurgency

KAREEM CHEHAYEB

Abu Mohammed al-Golani, the militant leader whose stunning insurgency toppled Syria’s President Bashar Assad, has spent years working to remake his public image, renouncing longtime ties to al-Qaida and depicting himself as a champion of pluralism and tolerance. As he entered Damascus behind his victorious fighters Sunday, he even dropped his nom de guerre and referred to himself with his real name, Ahmad al-Sharaa.

The extent of that transformation from jihadi extremist to would-be state builder is now put to the test.

Insurgents control Damascus, Assad has fled into hiding, and for the first time after 50 years of his family’s iron hand, it is an open question how Syria will be governed.

Syria is home to multiple ethnic and religious communities, often pitted against each other by Assad’s state and years of war. Many of them fear the possibility that Sunni Islamist extremists will take over. The country is also fragmented among disparate armed factions, and foreign powers from Russia and Iran to the United States, Turkey and Israel all have their hands in the mix.

Why Arabs and Muslims 'Betrayed' Hamas

Khaled Abu Toameh

Fourteen months after the Iran-backed terrorist group, Hamas, attacked Israel, murdering 1,200 Israelis and wounding thousands more, Hamas has finally acknowledged that it has been abandoned by many Arabs and Muslims.

When Hamas launched the October 7, 2023 assault on Israeli communities near the border with the Gaza Strip, its leaders were hoping that many Arabs and Muslims would join the fight to murder as many Jews as possible to eliminate Israel. Hamas officials expressed hope at the time that the October 7 atrocities would prompt the formation of a large Arab-Islamic battlefront against Israel. The hope was that the Iran-backed Hezbollah organization in Lebanon would launch a similar invasion of Israel, that Iran would unleash thousands of ballistic missiles against Israel, and that tens of thousands of Muslims would invade Israel from Jordan.

The only parties that chose to join Hamas's war on Israel were Iran's other terror proxies: Hezbollah in Lebanon, the Houthis in Yemen, and some Shiite armed groups in Iraq. Several Iran-backed armed groups, consisting mostly of Palestinian Islamic Jihad members in the West Bank, also joined Hamas's Jihad (holy war) against Israel by unleashing a wave of terrorist attacks against Israelis.

What just happened in Syria and who's in charge?

David Gritten

The Assad family ruled Syria for more than 50 years with an iron fist. Now that has come to an end.

Bashar al-Assad became president after the death in 2000 of his father Hafez, who had ruled for almost three decades.

In 2011, he brutally crushed a peaceful, pro-democracy uprising, sparking a devastating civil war in which more than half a million people have been killed and 12 million others have been forced to flee their homes.

Thirteen days ago, the Islamist militant group Hayat Tahrir al-Sham (HTS) and allied rebel factions launched a major offensive in north-western Syria.

The rebels quickly captured the country's second-largest city, Aleppo, then swept southwards down the highway to the capital, Damascus, as the military collapsed.

Russia announced that Assad had stepped down and left Syria on Sunday, hours after the rebels entered Damascus and crowds gathered on the streets to celebrate. It later emerged that Assad had flown to Moscow and been granted asylum.

HTS leader Abu Mohammed al-Jolani meanwhile arrived in Damascus and told Syrians: "The future is ours."

The Real Reason for Saudi Arabia’s Pivot to Iran

Steven A. Cook

Over the last few weeks, colleagues, bosses, mentors, and friends from high school have asked me some version of the question “What’s up with Mohammed bin Salman?” On Nov. 11 at a summit of Islamic nations in Riyadh, the Saudi crown prince called on the international community (translation: the United States) to compel Israel to “respect the sovereignty of the sisterly Islamic Republic of Iran and not to violate its lands.” At the same gathering, he described what the Israel Defense Forces had wrought in the Gaza Strip as a “collective genocide.”

This rhetoric runs against everything that most folks in Washington have come to believe about Mohammed bin Salman, thus prompting the “What’s up with him?” questions. And this time at least, the Washington foreign-policy community is not imagining things.

Jew-Hunting: Open Season in the West

Guy Millière

November 7. Amsterdam. As soon as a soccer match between the Netherlands' AFC Ajax, a Dutch soccer club, and Israel's Maccabi Tel Aviv ends, Maccabi supporters who came from Israel and several European countries to attend the match, are attacked. Many are chased through the streets, beaten, thrown to the ground, punched, kicked, stabbed, and thrown into the icy water of the city's canals. While the attackers shout anti-Semitic slurs, the victims, in an attempt to escape, shout back that they are not Jewish.

The attackers film what they do, then post the videos on social networks. Five Israelis are hospitalized; dozens of others, some wounded, lock themselves for hours in their hotel rooms. The Israeli government sends planes to rescue the Jews. A jihadi pogrom has just taken place in the city where Anne Frank and her family hid until they were turned over to the German occupiers and sent to death camps.

"This is a very dark moment for the city, for which I am deeply ashamed," said Femke Halsema, Amsterdam's "left wing" mayor.

"We must not look away from antisemitic behavior on our streets," King Willem-Alexander of the Netherlands was even more explicit.

Rebel Yell Part I: Donald Trump broke the back of the GOP establishment by driving blue-collar and lower-middle-class politics in a Southern direction. His gentry Republican critics have only themselves to blame.

Walter Russell Mead

Donald Trump’s first and in many ways most enduring political accomplishment is not the humiliation of the Democratic Party he has toppled in two of the last three presidential elections. It is the devastating defeat he has inflicted on the Republican establishment he has marginalized and dispersed. Our once and future president will not win every battle with what remains of the old Republican establishment, and in politics nothing is eternal. But as of Nov. 5, 2024, the “man from Queens” has achieved a domination of the Republican Party that no previous Republican president has ever enjoyed. The modern Republican Party that Ronald Reagan made, and that George W. Bush took into the 21st century, has fallen before the MAGA hordes, and today’s ambitious Republican politicos must say to Trump what Ruth said to Naomi: Whither thou goest I will go; and where thou lodgest I will lodge.

Until recently, when people thought about the political divisions inside the Republican Party, they saw two camps. There was the predominately liberal Republican Party rooted in the Northeast and represented by figures like Nelson Rockefeller and Mitt Romney, and there was the Sunbelt Republican movement led by Ronald Reagan. Sunbelt Republicans were seen as further to the right than their Rockefeller Republican rivals on both economic and social issues. The shift of white Southerners in the 1970s and 1980s to the Republicans from their traditional post-Reconstruction Democratic affiliation decisively tipped the balance between Sunbelt and Rockefeller Republicans, driving the whole party into the more conservative form it assumed under both Reagan and Bush.

Rebel Yell Part II: How Reagan-Bush Republicans awakened the Balrogs of economic, immigration, and identity politics that Donald Trump used to crush them

Walter Russell Mead

The last 35 years have seen a resurgence of the Jacksonian populism that once defined politics across much of the white South. The culture and political beliefs of the post-Reconstruction South, moreover, have dramatically expanded their reach: Jacksonian America is no longer confined to the Ozarks and Appalachia. The spirit of resistance to the Eastern financial and cultural establishment, to the quasi-official national culture the establishment promotes, to a federal government largely shaped by establishment values, and to local politicians and powerbrokers who align themselves with the snooty and imperious Ivy League Yankee Northeast, now dominates much of the country.

For those with eyes to see, there were many signs of a looming explosion. But for much if not all of the last eight years, the pro-business, pro-international engagement wing of the Republican Party turned a blind eye to what they didn’t want to see. Many Reagan Republicans were as confused by the defection of their political base as they were horrified by the rise of Donald Trump. Stirring calls for American world leadership and hymns of praise to a free-market economy had worked wonders for Ronald Reagan and brought George W. Bush to the White House. But when presidential candidates blew the old trumpets in 2016 and again in 2024, nobody came running. Instead, the voters flocked to Trump rallies by the tens of thousands, leaving the Reaganites on the fringes of a party they once had dominated.

Britain has never looked more exposed, adrift in the Atlantic in a world pulsing with perils

Andrew Rawnsley

‘I don’t know what effect these men will have upon the enemy, but, by God, they frighten me.” I thought of the Duke of Wellington’s remark about his soldiers when Admiral Sir Tony Radakin, the chief of the defence staff, gave a speech last week in which he shivered the blood by describing the security outlook as “more contested, more ambiguous and more dangerous” than at any time in his career. This came a couple of days after a spine-chiller from Richard Horne, the head of the National Cyber Security Centre, who warned that there is “a clearly widening gap” between the UK’s vulnerability to escalating cyber warfare by adversaries and “the defences that are in place to protect us”. Another call to put up our guard has been issued by Sir Richard Moore, the head of MI6, who raised the alarm about a “staggeringly reckless campaign of Russian sabotage in Europe”. In 37 years in intelligence, he has “never seen the world in a more dangerous state”. If you are not scared yet, have a listen to Ken McCallum, the director general of MI5, saying that his agency has had to “pare back” its work on counter-terrorism to meet the growing threat from Russia, Iran and other hostile states.

The cynically minded in government note that these quasi-apocalyptic alerts are being issued in the midst of a strategic defence review, which is due to report early next year, and a comprehensive spending review, which is scheduled to conclude in June. Those responsible for our security are in competition for additional resources against all the demands for more spending from the civilian side of the street.

Russia's 'meat-grinder' tactics bring battlefield success - but at horrendous cost

Paul Adams

As 2024 draws to a close, and winter arrives, Russian forces are continuing to push their Ukrainian opponents back.

In total, Russia has captured and retaken about 2,350 sq km of territory (907 sq miles) in eastern Ukraine and in Russia's western Kursk region.

But the cost in lives has been horrendous.

Britain's defence ministry says that in November Russia suffered 45,680 casualties, more than during any month since its full-scale invasion in February 2022.

According to the latest UK Defence Intelligence estimate, Russia lost a daily average of 1,523 men, killed and wounded.

On 28 November, it says, Russia lost more than 2,000 men in a single day, the first time this has happened.

"We're seeing the Russians grinding out more advances," one official said, on condition of anonymity. "But at enormous cost."

What Trump’s New AI and Crypto Czar David Sacks Means For the Tech Industry

Andrew R. Chow

For much of 2024, one of President-elect Donald Trump’s staunchest allies in Silicon Valley was David Sacks, an entrepreneur, venture capitalist, and co-host of the popular podcast All-In. On his podcast and social media, Sacks argued that Trump’s pro-industry stances would unleash innovation and spur growth in the tech industry. In June, Sacks hosted a fundraiser for Trump in San Francisco that included $300,000-a-person tickets.

Now, Sacks has been rewarded with a position inside the White House: the brand-new role of "AI & crypto czar." It’s unclear how much power this role actually has. It appears that this will be a part-time role, and that Sacks will remain with his VC fund Craft. This murkiness, and the fact that Sacks will not have to go through the Senate confirmation process, is drawing concerns over conflict of interest and lack of oversight. Regardless, Sacks will start the Administration with Trump’s ear on key policy decisions in these two rapidly growing sectors. Leaders inside both industries largely cheered the decision.

“A whole-of-government approach that collaborates closely with private industry is essential to winning the AI race, and a designated AI leader in the Administration can help do that,” Tony Samp, the head of AI policy at the law firm DLA Piper, tells TIME.

Politics vs Policy

Sam Freedman

I’ve been at a number of events recently in which smart technocrats from top universities and think-tanks set out solutions to the varying problems of the British state. Followed immediately by more politically-minded attendees explaining why these ideas are all totally incompatible with ever winning an election again.

This is, of course, not a new problem. Policy thinkers have always despaired about the irrationalities of politics. If only we could get rid of those pesky voters we could fix everything (of course some countries have tried that too and it hasn’t worked out all that well).

But in recent years governments have been increasingly paralysed by the disconnect between what experts are telling them to do and what the public seem to want. Look across almost any policy area and you see the problem.

All of the big ideas for growth, many of which were helpfully listed for us in a guest post by John Kingman, risk deep unpopularity. NIMBYs and environmentalists will fight back against planning changes and big infrastructure projects. There’s no desire to reopen the Brexit arguments, even if Leavers are disappointed with the outcome to date. So that’s out.

2025 could be the year AI grows up

Jackie Snow

Silicon Valley says 2025 is the year AI grows up and gets a job. Tech leaders envision armies of AI agents — autonomous digital workers that can actually get things done, not just chat. But after years of bold AI promises and mixed results, Wall Street analysts are questioning whether this trillion-dollar bet will finally pay off.

On one side stands tech leaders like Marc Benioff, Salesforce’s (CRM) CEO and one of tech’s most ardent AI optimists, who took to the cover of Time (which he owns) to say we’re entering an “Agentic Era” — one in which autonomous AI workers will unlock “massive capacity” and fundamentally redefine work as we know it.

On the other, Goldman Sachs warns that the roughly $1 trillion being poured into AI infrastructure may yield surprisingly modest returns, with skeptics arguing the technology isn’t yet capable of solving the complex problems needed to justify such massive investment.

The gulf between these perspectives couldn’t be wider. Benioff envisions AI agents that will work independently alongside humans, handling everything from customer service to inventory management without human intervention. In his view, these digital workers will drive unprecedented productivity gains and GDP growth, creating far more jobs than they displace. He points to early success stories like College Possible, a nonprofit that deployed an AI college counselor in just one week to support thousands of students who previously had limited access to guidance.