Sen. Young: ‘Go On Offense’ In China Tech Race; Bipartisan Bill Gathers Steam

WASHINGTON: A bipartisan group of senators is urgently working to craft a bill to help the US “out-innovate” and “out-compete” China in the high-tech world. The Endless Frontier Act is reminiscent of what the US did last century after the Soviet Union launched Sputnik: fund research and development to discover breakthroughs that give the nation lasting advantages in defense and economic competition.

“The United States has been active on defensive measures such as trade restrictions, tariffs, and adding certain Chinese companies to various lists. However, defense is not enough,” bill co-sponsor Sen. Todd Young told me in an interview. “The time has come for us to go on the offense. It is not sufficient to tell countries around the globe not to buy Chinese technologies. We must offer them an alternative.”

Young, a Republican from Indiana, was the first to co-sponsor the bill introduced by Democrat Senate Majority Leader Chuck Schumer. Six other senators — three Republican and three Democrat  — have signed on, including Democrat Gary Peters on the Armed Services Committee and Democrat Jeff Merkley and Republican Susan Collins on the Appropriations Committee.

“This critical moment demands action from Congress,” Young said. “I am hoping that in the coming weeks, the House and Senate will come together to send a strong bipartisan message to the world that, while we may be a divided country on many issues, the US is able to come together to out-innovate and out-compete the Chinese Communist Party.”

Schumer has indicated he wants to “fast-track” the bill to a floor vote this spring. Breaking Defense reached out to Schumer’s office for comment, but did not hear back before publication.

Details are being hammered out, but Schumer has said the bill will authorize an approximately $100-billion federal investment in R&D over five years. An early draft version hints at what the final legislation could entail, to include:

• Establish a new Directorate for Technology in the re-designated National Science and Technology Foundation, to establish a regional technology hub program, to require a strategy and report on economic security, science, research, and innovation, and for other purposes;
• Significantly increase investment in research, education, technology transfer, and the core strengths of the United States innovation ecosystem… in key technologies—such as artificial intelligence, quantum computing, advanced communications, and advanced manufacturing;
• Catalyze US innovation by boosting fundamental research investments focused on discovering, creating, commercializing, and producing new technologies to ensure the leadership of the United States in the industries of the future;
• Partner the federal government with the private sector to build new technology hubs across the country, spreading innovation sector jobs more broadly, and tapping the talent and potential of the entire nation to ensure the United States leads the industries of the future.

The legislative package reportedly also includes an emergency funding plan for semiconductors amid an ongoing global shortage.

While the Endless Frontier Act is not a defense spending bill, many of the R&D areas that will be funded have dual-use applications across defense and commerce. Indeed, many in the Defense Department now speak of “tech inversion” — that is, the idea that the private sector has supplanted DoD’s traditional role as the driver of defense tech innovation — especially in high tech — and DoD’s primary job now is to find ways to apply innovations to defense use cases. These areas include everything from AI and cloud computing to advanced communications and semiconductors. The Endless Frontier Act will give the federal government an active role in steering R&D initiatives of national interest.

The legislation is being crafted at a time when China has openly stated its ambitions to surpass the US in a variety of defense and commercial high-tech areas — from AI and quantum computing to its ongoing push for global telecommunications market share. China is investing heavily at home through initiatives like “Made in China 2025” and competing against the US internationally through its ambitious “Belt and Road Initiative,” which involves trillions in tech and infrastructure investments worldwide. China has also openly stated its plan to “dominate” the forecasted multitrillion-dollar AI market by 2030.

The bill seeks to substantially fund a national R&D agenda in order to compete. “China’s overall investment in R&D will surpass our own within the decade as their economy continues to outpace ours,” Young noted. “Keeping our edge will require smart bets on emerging technologies that the federal government alone possesses the ability to make, but which will lean on public and private knowledge.”

The bill appears to be partly intended as a US answer to China’s current strategy, in which the government determines, partly funds, and directs initiatives that private companies must pursue in the national interest. Members of the CCP and the People’s Liberation Army sit on the boards of many Chinese companies in strategic sectors.

The Endless Frontier Act does not go that far, but its funding will give the federal government influence over R&D deemed important to national interests. “Some do not believe this is an appropriate role for the government and that we should leave it to the private sector,” Young said. “I am sympathetic to this reasoning but, simply, the private sector and venture capital community is not up to shouldering this task on its own.”

One challenge the US faces is that the private sector, for decades, has increasingly eschewed early stage R&D work in favor of adapting later-stage concepts that can more rapidly be brought to market profitably for a faster return on investment. Without proper R&D, it can be difficult to make fundamental discoveries that can lead to major breakthroughs — illustrated by many past examples, such as the stealth technology pioneered by the US last century. While acknowledging the entire R&D life cycle, the bill’s current draft language appears to focus on funding early stage R&D.

“Basic science and research is inherently risky,” Young observed. “Thankfully, the federal government, through institutions like the National Science Foundation, has the ability to step in and provide confidence for researchers to take risks and for companies to invest in their own research and development, and to create opportunities wherein the federal government is first in line to take advantage of cutting-edge technologies.”

The bill is also reminiscent of how the US government invested last century to establish and maintain advantages in dual-use defense and commercial tech. Many of those initiatives were compelled by immediate challenges facing the nation, such as World War II and the Cold War.

Within the current context of aggressive — yet so far non-kinetic — competition with China, a similar moment may have arrived for the US. While great power competition will always necessarily entail an element of traditional military hardware, it also now includes photons, algorithms, datasets, and microelectronics (to name a few) — areas all ripe for R&D breakthroughs and dual-use applications.

It’s unclear right now whether or not the bill will include funding and/or requirements for cybersecurity measures to protect America’s R&D investment. The draft language acknowledges that the US’s “leadership position is being eroded and challenged by foreign competitors, some of whom are stealing intellectual property and trade secrets of the United States.” Primary among the noted “foreign competitors… stealing…” is China.

The bill should bolster the US economy and national security at the same time, the senator believes.

“This is not a jobs bill, but it will revolutionize how Americans learn, work, and do business. At the same time, we cannot exclude the important strategic investments being made in our national defense and military, and the Endless Frontier Act should not be seen as a replacement to that, but instead as a complement,” he said in an email. “Emerging technologies will not just change the way American society lives, but also how our military fights. These dual paths of ensuring military modernization and readiness alongside smart federal investments in cutting-edge technologies will help preserve our strategic deterrence against threats of all shapes and sizes.”