To Compete with China, Unleash Innovation in the US Tech Sector – Barron’s – Business Telegraph

We live in a world of competition. If we were merely talking about level-playing-field economics, then I wouldn’t view global competitiveness as a zero-sum game. Technological advances and creative genius would enable the U.S. and our partners to continue to expand value while having a positive impact on quality of life. However, competitors on the world stage seek to gain improved stature at our expense, leveraging government-sponsored programs to achieve their strategic ends.

For some time now, Americans have watched geopolitical competitors, particularly China, emerge as increasing threats. And yet we have deepened our economic ties in an effort to draw them into global forums. Rather than embrace free-market ideals, they seek to undermine U.S. influence and reshape the global community. We now find ourselves in a position where we have entrusted critical capabilities to those who would prefer to do us harm. The added layer of the pandemic has increased tensions and drawn clear lines between partners and competitors.

It is time for us to focus our efforts on building the critical capabilities required for our new security landscape. Just as we continue to innovate and create cybersecurity solutions to address rising threats—the recent spate of cyberattacks on our government agencies and private sector highlights the need for advancement on this front—we must recognize investments in critical technologies as investments in the future of our national security. This includes investments in microelectronics, hypersonics, biotechnology, artificial intelligence, autonomy, fifth-generation networks, and numerous other solutions.

The U.S. Senate’s recently passed Innovation and Competition Act offers the right intent for this purpose. However, large-scale federal spending for specific programs and industries is the wrong approach. Our free-market system is the best in the world specifically because it drives competition and innovation in the areas where it is needed most. To the extent that federal legislation is introduced, it should bolster, not redirect, existing market competition for critical technologies.

Through private investment, we accelerate the development and implementation of the best of our products and services, which are redefining how business is conducted. Capital is allocated based on real-time market demand, and offers a more efficient and effective means of solving key security issues.

One example is our manufacturing industry. The pandemic showed us new fault lines in this industry and underscored the strategic importance of technology-enabled innovation compared with outdated and multifactor processes.

Manufacturers historically sought to outsource production capabilities based on artificially low costs of production, leading to an overreliance on global supply chains and, in some cases, a reliance on our competitors. Critical technologies are key to production that is truly optimized, a path toward empowerment instead of a path of least resistance.

Private investment in new manufacturing solutions now permits the robotics driving a new era of manufacturing to complete tasks and continually improve as they are repeated. New processes streamline operations and reduce costs, allowing the power of our free markets to operate as intended. Supply chains are also more efficient; unneeded steps in the production process are removed.

This is just one illustration of how emergent technologies, addressed through the private sector, can reorient an entire industry toward a more sustainable paradigm and more secure operations.

I have full faith in the mainstream adoption of machine learning, AI, microelectronics, 5G, autonomy, and other solutions across industries—and soon.

If we are to succeed across our evolving risk landscape, however, we must embrace the best ideas brought to market. This is why federal action should account for the power of the private sector to guide our resources, not vice versa.

To effectively innovate and compete in the 21st century, we must leverage America’s core strengths: her people, her genius, and her depth of character. We must also leverage capitalism, which has consistently led to victory. By allowing it to disrupt and advance our industries, it is poised to do it again.

Make no mistake: The economic and national security threat is real. Continuing to delay the onward movement of industry will deepen our risk and decrease our ability to extricate ourselves in the future. But we are still America. Time and time again, we have mobilized against seemingly overwhelming threats.

We will remain engaged globally, support our allies, and continue to encourage China and other nations to operate on a level playing field, but we must shore up our businesses to face the realities of the 21st century. Technological innovations stemming from our private sector now will allow us to do both at once.

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