Absent a New National Strategy, the U.S. Risks Losing Its Edge to China in Technology and Innovation, Warns Task Force

September 18, 2019

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September 18, 2019—“The United States has led the world in innovation, research, and technology development since World War II, but that leadership is now at risk,” warns a new Council on Foreign Relations–sponsored Independent Task Force. Addressing the challenge from China and other rising science powers requires an ambitious plan of national investment in science and technology,” asserts the Task Force, which is co-chaired by retired U.S. Navy four-star Admiral William H. McRaven and McKinsey Global Institute Chairman James Manyika.

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“Facing the threefold challenge of the accelerating pace of innovation, the diffusion of multiple-use technologies, and the rise of China, the United States must act now to build a national strategy for sustaining American leadership in innovation,” contends the Task Force. It argues the United States needs to respond urgently and comprehensively over the next five years with a national security innovation strategy to ensure it is the predominant power in a range of emerging technologies such as AI and data science, advanced battery storage, advanced semiconductor technologies, genomics and synthetic biology, fifth-generation cellular networks (5G), quantum information systems, and robotics.

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“Failure to do so will mean a future in which other countries reap the lion’s share of the benefits of technological development, rivals strengthen their militaries and threaten U.S. security interests, and new innovation centers replace the United States as the source of original ideas and inspiration for the world,” warns the Task Force.

Federal spending on research and development (R&D) as a percentage of the economy has declined in the United States from 1.2 percent of GDP in 1985 to 0.66 percent in 2016. China, meanwhile, is catching up, having increased its R&D expenditures by an average of 18 percent annually since 2000. Assuming current rates of growth, China “will likely equal or exceed the United States in overall R&D expenditures after 2030.”

While the Task Force “commends the White House for confronting China on cyber espionage and IP [intellectual property] theft,” it also finds that “the administration is over-weaponizing trade policy, with long-term costs to U.S. innovation capabilities.” It cautions, “Slowing China down is not as effective as outpacing it,” and that the best way to answer China’s challenge is to compete more effectively. “There is much that Washington can and should do that is unrelated to Beijing and is instead concentrated on maintaining U.S. leadership.”

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In its report, Innovation and National Security: Keeping Our Edge, the Task Force proposes four pillars of policy recommendations for the U.S. government, the private sector, and academia:

  • restore federal funding for research and development and announce moonshot approaches to society-wide national security problems such as threat detection networks and carbon-capture technologies;
  • expand the science, technology, engineering, and math (STEM) pipeline and attract, retain, and educate a world-class science and technology workforce;
  • support the acquisition and adoption of technology in the defense sector by shifting a portion of budget to the rapid integration of commercial technology and by the appointment of specialists to fast-track technologies; and
  • create a technology alliance with partners to develop common policies for emerging technologies and to collaborate on science projects.

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The bipartisan Task Force is composed of twenty notable experts who are leaders in their fields. The project is directed by Adam Segal, Ira A. Lipman chair in emerging technologies and national security and director of the Digital and Cyberspace Policy program at CFR.

“With renewed dedication to a national innovation security strategy, the United States can ensure its continued and future economic growth and national security,” the Task Force concludes.

To view the full report, please visit cfr.org/KeepingOurEdge.

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About the Task Force

CFR-sponsored Independent Task Force reports offer analysis of and policy prescriptions for major foreign policy issues facing the United States, developed through private deliberations among a diverse and distinguished group of experts. Task Force members are asked to join a consensus signifying that they endorse the general policy thrust and judgments reached by the group, though not necessarily every finding and recommendation. They participate in the Task Force in their individual, not institutional, capacities.
 
Alana Ackerson
Figure
 
Doug Beck
Apple
 
Nicholas F. Beim
Venrock
 
Jim Breyer
Breyer Capital
 
Steven A. Denning
General Atlantic
 
Regina Dugan
Independent Consultant
 
Reid Hoffman
Greylock Partners
 
Amir Husain
SparkCognition
 
Nicole Y. Lamb-Hale
Kroll, a Division of Duff & Phelps
 
Eric S. Lander
Broad Institute
 
James Manyika 
McKinsey & Company
 
William H. McRaven 
Lyndon B. Johnson School of Public Affairs, University of Texas, Austin
 
Mira Patel
Facebook
 
DJ Patil
Devoted Health
 
L. Rafael Reif
Massachusetts Institute of Technology
 
Eric Schmidt
Alphabet
 
Adam Segal 
Council on Foreign Relations
 
Raj M. Shah
Arceo.ai
 
Laura D’Andrea Tyson
Haas School of Business, University of California, Berkeley
 
Jerry Yang
AME Cloud Ventures

To request an interview with a CFR expert, please contact the Global Communications and Media Relations team at 212.434.9888 or communications@cfr.org.

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