Behind America’s New Industrial Revolution

The U.S. economy grew faster than expected over the past year, driven in part by strong corporate investments.

Some observers characterize the current momentum as the start of a new industrial revolution, fueled by technological innovation, deregulation, lower energy costs, tariffs, and tax cuts. In recent years, the United States has outpaced other advanced economies, especially in Europe, where growth has nearly stalled.

A surge in investment in artificial intelligence, combined with President Donald Trump’s pro-growth policies over the past year, has further strengthened America’s economic performance, according to analysts.

On Independence Day last year, Trump signed the One Big Beautiful Bill Act into law. The legislation included measures designed to encourage capital spending and bring manufacturing back to the United States. A key provision permanently restored 100 percent bonus depreciation for qualified assets, allowing businesses to immediately deduct the full cost of investments in factories, equipment, software, and domestic research and development. Many firms are using this policy to lower tax burdens and reinvest savings into expansion.

Manufacturing activity is expanding, and the rapid growth of AI is increasing demand for energy, data centers, and raw materials. Despite concerns about an AI bubble, major companies plan substantial investments to expand their AI infrastructure.

Investor optimism is also on the rise. Stoyan Panayotov, a California-based asset manager, described the United States as being “at the doorstep of a new industrial revolution,” citing its strong capital base, skilled workforce, and shareholder-friendly environment as advantages over other markets.

Strong corporate earnings are also reinforcing positive sentiment. More than 70 percent of S&P 500 companies reported better-than-expected earnings in the fourth quarter of 2025. Stock market indexes have reached record highs, with the Dow Jones Industrial Average surpassing 50,000 on Feb. 6 and the S&P reaching 7,000 shortly before that. Trump credited these gains to his economic policies, especially tariffs, and predicted the Dow would reach 100,000 by the end of his term.

Investor and entrepreneur Kevin O’Leary emphasized the global appeal of U.S. markets, calling the United States the “most trusted” investment hub. He noted that a significant share of global investment flows into American stocks.

“It’s the most liquid and most successful economy on Earth,” the “Shark Tank” star said. “It provides consistent returns.”

U.S. productivity growth remains strong. Nonfarm productivity rose 4.9 percent in the third quarter of last year, reflecting improved efficiency in producing goods and services. Since 2019, U.S. productivity has risen sharply, while growth in the United Kingdom and the Eurozone has stagnated, according to OECD data. The growing gap between the United States and Europe is largely explained by the tech sector.

Deregulation has been a key part of Trump’s economic agenda and is helping to build this strong business momentum.

By reducing compliance costs for companies, the Trump administration aims to free up capital for investment, productivity improvements, and job creation. Economist Daniel Lacalle argued that deregulation and lower taxes have delivered an immediate boost to production and private investment. 

Since returning to the office, Trump has rolled back regulations in finance, energy, and technology. In fiscal year 2025, federal agencies eliminated 646 regulations while introducing only five new ones, far exceeding the administration’s stated goals. Trump also recently repealed an Obama-era greenhouse gas emissions rule, a move projected to generate significant cost savings and benefit fossil fuel, automotive, and energy-intensive industries.

Regulations function like a “hidden tax” on consumers and businesses, said John Berlau, a senior fellow at the Competitive Enterprise Institute. He pointed out that businesses need a stable regulatory environment to feel confident about investing and growing.

Cathie Wood, the founder of Ark Invest, known for big bets on disruptive technologies, also highlighted the administration’s record on deregulation in her 2026 Outlook report.

“Deregulation is unleashing innovation in every sector,” she wrote.

–Emel Akan

BOOKMARKS

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—Stacy Robinson