This is an excerpt of an article by Melissa Flagg and Paul Harris, originally published by the Center for Security and Emerging Technology (September 2020). Read the full article here.

By Melissa Flagg University of Pennsylvania Perry World House Visiting Fellow

Over the last decade there has been an increasing focus in policy communities on the importance of technology in national security. It has become a flashpoint in the emerging great power competition with China and has spurred a rare bipartisan willingness within the United States to entertain a host of pro-innovation and protective policy changes. Ranging from large economic and military technology investments and new industrial policy measures by the federal government, to a foundational reassessment of openness on our university campuses– we are in the midst of what could be a radical reshaping of the relationship between our largely private research and development ecosystem and our national security community.

We see this theme echoed across the highest levels of the U.S. government. Just last year, the Under Secretary of Defense for Research and Engineering, Ms. Heidi Shyu made several speeches discussing that we “cannot afford a leveling of technology advantage” with repeated focus on the need to leverage critical state-of-the-art commercial technology to accelerate our military capabilities. The 2022 National Security Strategy is peppered with this idea as well and explicitly states that “technology is central to today’s geopolitical competition and to the future of our national security, economy and democracy.”

And while leadership acknowledges that we are experiencing huge changes to both the geopolitical and technology landscapes, our responses still rely on structures and concepts built and tested in a somewhat anomalous post WWII period. Whether it is our domestic interventions or our approach to international alliances, most of our remedies seem to pretend that national governments are in charge of, or at least dominant in this vast, decentralized ecosystem of technology.

We must begin to articulate how the environment has changed since the period when our current structures and systems were created. Relying on a foundation that is not well-aligned to the emerging reality may make our responses increasingly responsive, frantic, and ineffective. It is critical to recognize the disruptions on the horizon and reconsider what interventions are likely to work in this new world order. In 1960, American R&D accounted for 69 percent of the world total. The U.S. federal government funded the largest share of that global majority. Domestic government funding for R&D increased by a factor of more than 10 from the 1940s to the 1960s. Fast forward 60 years to the present day. U.S. R&D accounts for just over a quarter of the world total. Chinese R&D has grown quickly to a size almost equivalent to the United States. A diverse group of countries—headed by Japan, Germany, South Korea, India, France, and the UK— makes up the other half. The R&D system has globalized and grown to more than $2.2 trillion— a remarkable tripling of global investment in just the last two decades.

The current domestic U.S. R&D system is also fundamentally different from the system of 1960 or 1945. Not only does the U.S. no longer hold unquestioned global leadership, but the U.S. federal government no longer funds the lion’s share of U.S. R&D. In 1960, the federal government provided roughly 69% of total domestic R&D investment. Today, the federal government makes up less than 22% with industry making up almost 70% and contributions by philanthropy/high net worth individuals, academic endowments, and states and localities making up the rest.

This rapid expansion of powerful national actors in R&D as well as the massive impact of domestic and global industrial players across sectors and continents brings new challenges. For decades the Department of Defense has relied on organizations like DARPA to “create and prevent technological surprise” while allowing Cold War technical intelligence capabilities to atrophy in the 20 years of war in Afghanistan and Iraq. Alliances have remained the domain of government-to-government discussions, even when those actors control a minority of the R&D they purport to represent. Today, the U.S. military finds themselves in a high-tech, near peer competition within a world where supply chains are opaque and heavily intertwined and where technical talent and funding are widely dispersed. And a world where companies may decide unilaterally what capabilities are made available both to the U.S. military and to other militaries around the world. The example of Starlink in Ukraine is a signal that we need to consider our government-industry relationships carefully in this new future.

If the Department of Defense believes that we must leverage the full strength of our technology base to ensure future military and economic strength, we must first understand that base. And as a nation we have some choices to make about the desired relationship between our private technology base anchored in our universities, start-ups, and mid-large companies and our federal national security apparatus. Currently we find ourselves playing a game of Whack-a-mole, responding to crises as they emerge but doing little to understand and plan for the long-term competition rather than a short-term war. We should take care to not make this a self-fulfilling prophecy.