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Big Tech is a big deal in the strategic competition with China



Last week,
I testified
before the House Science, Space, and Technology Committee on the state of the U.S. technology and innovation sector and what that portends for the nation’s strategic competition with China. This week, Sen. Amy Klobuchar (D-MN)
will hold a hearing
to, once again, discuss “reining in dominant digital platforms.” These events are connected and any legislative action targeting the American technology industry should understand and account for these connections.

Technology has always been a key variable in geostrategic change. From the sailboat and gun powder to modern communications and information technology, these and other innovations revolutionized their respective eras and changed the fortunes of nations. So it is today.

Three trends have special prominence in driving the rise in technology companies that are re-shaping the contours of the emerging global order.

Global interests and influence. In 2023, global technology spending is
to total $4.6 trillion, an increase of over 5% from 2022. Another
predicts that by the end of this year, digitally transformed industries will account for more than 50% of world-wide GDP. Put simply: the world’s largest technology companies are amassing a level of wealth and transnational influence that was previously only enjoyed by states. But these companies are more than just players in the game of global politics, they are often the arena itself.

The expanding role of digital and social media. While modern communications technology and social media platforms are combining to produce an unparalleled tool for legitimate political discussion and action, these tools also extend to bad actors, such as Russia and China. Governments all over the world are asking, begging, and even threatening technology companies in an effort to get their collective hands around the challenge, but private sector technology actors have built a capability for wide-scale political influence that largely falls outside of the control of political leaders.

The development of critical national security capabilities and methodologies. The reality is that the technologies that are essential for securing American people and interests—such as artificial intelligence (AI), quantum computing, and robotics—are overwhelmingly being developed in the private sector, which
for about 75% of total US research and development spending. Indeed, by the end of 2022,
spent a combined total of over $215 billion on research and development (R&D). The
Pentagon’s R&D budget request for that same year
was $112 billion.

Thankfully, the United States’ science and technology enterprise is strong and continues to be the envy of the world. American companies are pioneering and deploying innovations and technology that can expand human thriving, broaden economic prosperity, and ensure our national security for generations to come. But to fully leverage the capacity and capability of the private sector, we must first deliberately address three key challenges to the American science and technology enterprise.

First, we must confront Chinese technological theft and aggression. Beijing, like Washington, understands that emerging technologies like artificial intelligence (AI), robotics, and quantum science will decisively shape tomorrow’s societies, economies, and battlefields and that these innovations are overwhelmingly being developed in the private sector.

But unlike the U.S., the People’s Republic of China is not committed to free and fair competition in global innovation, instead coopting technology as an extension of the state for traditional and economic espionage. Whether through social media companies like
or drone companies like
, American companies’ submission to Beijing’s predatory demands on our data weakens American economic competitiveness, individual and national cybersecurity, and broader national security to the degree that this capitulation enables China’s technological ascendance over the U.S.

Second, we must help allies understand that a strategy of “regulate first and ask questions later,” will hurt—not help—all of us and risks ceding the advantage to Beijing. Other governments, particularly those in the European Union (EU), are enacting laws that deliberately target American innovation companies, preference domestic champions, and threaten to splinter the internet itself into a series of “mininets.” Even more, the economic scarcity that would inevitably follow such a splintering would leave these partners more susceptible to the siren song of cheap cloud services and other offerings from China, which are heavily subsidized by CCP for the express purpose of stealing a country’s data and wealth. If this happens, many of our friends will have lost their sovereignty and security in their bid to keep them.

Finally, domestic debates about technology and innovation must be constrained by facts and by geopolitical realities. Every institution and industry must be held accountable to U.S. law and national security concerns cannot be wantonly employed as a “get out of jail free” card. Neither, however, should perceived—but unsubstantiated—political grievances be used to justify counterproductive, or even unconstitutional, actions against the very science and technology enterprise at the heart of our individual and national prosperity.

Ultimately, our national defense has become more dependent on the private sector than ever before, precisely as China is emerging as a true-peer competitor not just technologically, but economically and militarily. Western tech companies and the U.S. government must recognize that long-term interests of both are better served through national security partnerships. And they should do this out of patriotism, out of economic interest, and because these partnerships enable the expansion of truly free markets and human thriving around the world.

This uniquely American advantage may well be decisive in an era of escalating geopolitical competition. It would be reckless to give it away.


This article originally appeared in the AEIdeas blog and is reprinted with kind permission from the American Enterprise Institute.

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