Daniel Pereira
As OODA CEO Matt Devost mentioned at OODAcon 2022, Razor’s Edge Ventures recently made a commitment to national security investment to enhance American competitiveness by closing on a fund dedicated to “current technology areas of interest for the firm, which are informed by strategic U.S. national security priorities, [such as] autonomous systems, space technologies, cybersecurity, artificial intelligence/machine learning, digital signal processing, and other aerospace and defense technologies.” (1)
Razor’s Edge efforts are very similar to that of America’s Frontier Fund and the Quad Investor Network. The venture capital community is focusing its efforts on this sector, which has been formatively dubbed the “defense-related technologies” or “defense capabilities” sector. Others are calling it “Hacking for Defense“.
On one level, the VC community’s pivot of its attention towards national security and innovation is the “dollars and cents” of it all. But what about the “sense” of it all – i.e. the creative ideas, strategic vision, and program management structure to succeed? It all falls under the umbrella phrase used by the USG (especially within DoD and DARPA) and what the OODA Network frames as “Deep Tech” – with the historic record of the strategic challenges of innovation in this space characterized as the Valley of Death.
This conversation of “So What?” and “What Next?” – as we say here at OODA Loop – has expanded over the last few months (and innovated in and of itself) in the form of the following seminal articles and reports:The AFF recently garnered attention from Foreign Policy (FP) Magazine in an article entitled “Could Venture Capital Be the New Frontier in Great-Power Competition? In the era of great-power competition, America’s Frontier Fund aims to harness venture capital to advance U.S. strategic interests.” As AFF Co-founder and President Jordan Blashek notes: “China invests for power, whereas the United States invests for profit. Success for America’s Frontier Fund is to do both.” For OODA Loop readers with FP access, see: America’s Frontier Fund Aims to Harness Venture Capital for the National Interest.
The co-authors of a recent article also in Foreign Affairs, America Could Lose the Tech Contest With China, Eric Schmidt and Yll Bajraktari, are Chair and CEO of the Special Competitive Studies Project (SCSP), respectively. The SCSP “builds on the work of the National Security Commission on Artificial Intelligence (NSCAI), which ended its congressionally-mandated work in October 2021. NSCAI made recommendations to the President and Congress to “advance the development of artificial intelligence, machine learning and associated technologies to comprehensively address the national security and defense needs of the United States. The SCSP is a bipartisan, non-profit initiative with a clear mission: to make recommendations to strengthen America’s long-term competitiveness for a future where artificial intelligence (AI) and other emerging technologies reshape our national security, economy, and society…to ensure that America is positioned and organized to win the techno-economic competition between now and 2030, the critical window for shaping the future.” (2)
In early September, the SCSP released a seminal report, Mid-Decade Challenges for National Competitiveness, which has been the lodestar report on the topic. For an OODA Loop breakdown and analysis of the report, see A Proactive National Technology Strategy in the Great Power Competition with China.
In late September, The National Academies of Sciences, Engineering, and Medicine also weighed in on this vital discussion of National Security Investment and American Competitiveness. Details of the report can be found here.
About the Report: Protecting U.S. Technological Advantage
“Maintaining U.S. Global Leadership in Science and Technology Requires Greater Focus on Strengthening Innovation, Not Solely on Restricting Access to Specific Technologies.”
– The National Academies of Sciences, Engineering, and Medicine
U.S. leadership in technology innovation is central to our nation’s interests, including its security, economic prosperity, and quality of life. Our nation has created a science and technology ecosystem that fosters innovation, risk-taking, and the discovery of new ideas that lead to new technologies through robust collaborations across and within academia, industry, and government, and our research and development enterprise has attracted the best and brightest scientists, engineers, and entrepreneurs from around the world. The quality and openness of our research enterprise have been the basis of our global leadership in technological innovation, which has brought enormous advantages to our national interests.
In today’s rapidly changing landscapes of technology and competition, however, the assumption that the United States will continue to hold a dominant competitive position by depending primarily on its historical approach of identifying specific and narrow technology areas requiring controls or restrictions is not valid. Further challenging that approach is the proliferation of highly integrated and globally shared platforms that power and enable most modern technology applications.
To review the protection of technologies that have strategic importance for national security in an era of openness and competition, Protecting U.S. Technological Advantage considers policies and practices related to the production and commercialization of research in domains critical to national security. This report makes recommendations for changes to technology protection policies and practices that reflect the current realities of how technologies are developed and incorporated into new products and processes.
Contributor(s): National Academies of Sciences, Engineering, and Medicine; Policy and Global Affairs; Division on Engineering and Physical Sciences; Board on Science, Technology, and Economic Policy; Committee on Science, Technology, and Law; Committee on Science, Engineering, Medicine, and Public Policy; Intelligence Community Studies Board; Committee on Protecting Critical Technologies for National Security in an Era of Openness and Competition. (3)
The study — undertaken by the Committee on Protecting Critical Technologies for National Security in an Era of Openness and Competition — was sponsored by the Defense Advanced Research Projects Agency and the National Science Foundation. The National Academies of Sciences, Engineering, and Medicine are private, nonprofit institutions that provide independent, objective analysis and advice to the nation to solve complex problems and inform public policy decisions related to science, technology, and medicine. They operate under an 1863 congressional charter to the National Academy of Sciences, signed by President Lincoln. (4)
Changes in the research and competitive environments require a new approach
Historically, efforts to protect the many U.S. advantages associated with technology leadership were grounded in policies aimed at protecting specific critical technologies from unauthorized disclosure, production, or use by adversaries. The risks associated with these discrete technologies — which typically had limited uses clearly related to national or economic security — could be managed by applying controls or restrictions on their development, manufacturing, use, acquisition, or trade.
More recently, heightened concerns about the potential loss of U.S. leadership in critically important technology areas have led to increased worries about the need to escalate protection and restrictions for certain technologies involving biotechnology, artificial intelligence and machine learning, and quantum computing, among others.
However, the escalation of such restrictions is unlikely to work and may even backfire, said the study committee. The nature of technology development and global competition have changed in ways that make such protections harder to impose and less effective.
For example, military technologies have become increasingly dependent on technology development in the commercial sector. Also, science, technology, and innovation are much more multidisciplinary and multinational today than in the past, which complicates efforts to protect individual technologies from military or commercial competitors. Moreover, many new technologies are developed and produced using systems of enabling technologies — platforms such as 5G and the internet — that have many potential applications, often at a global scale. Such platforms cannot be protected with restrictions on use or knowledge without causing widespread problems with other technologies that share those platforms.
The nature of the competitive environment has changed as well. Given the strong R&D ecosystems of other countries, it is likely infeasible to prevent competitors from developing technologies similar to those developed in the U.S. by restricting access to those technologies, the report says. In addition, the U.S. now faces an adversarial near-peer competitor — China — that over the past two decades has systematically pursued strategies for dominating technology development in key areas. China has been making massive investments in R&D, has a well-educated labor force three times larger than that of the U.S., and has sought to attract talent from other countries.
In addition, China is willing to obtain technology through the acquisition of companies, foreign-talent programs, and the theft of intellectual property — and it has learned that the U.S. will often react to such actions by instituting bureaucracies that slow the United States’ own capacity to innovate, the report says.
The U.S. research community has seen an extraordinary increase in the number and complexity of policies, processes, procedures, and requirements governing the conduct of science and technology R&D, the report says. That expansion, combined with the increasing array of government stakeholders exercising authority in this realm, has created a complex set of rules that limits the exchange of ideas, participation by others, and international collaboration — slowing the pace of research and making research environments less attractive to talented people.
“Risks in the new global R&D ecosystem cannot be managed in that way without posing a new risk — that of inadvertently slowing the development and application of technologies and limiting the United States’ competitive advantage,” said committee co-chair Patrick Gallagher, chancellor of the University of Pittsburgh. (4)
What Next?
The report recommends a “range of actions the federal government should take to maintain the United States’ global leadership in science and technology:The government should shift from its historical emphasis on protecting specific technologies from access by competitor nations to a risk-management approach that protects the United States’ own capacity to innovate, the report says.
‘Because the landscape of technology and competition is changing, protecting specific technologies themselves is certainly insufficient, often ineffective, and sometimes counterproductive,’ said Susan Gordon, former principal deputy director of national intelligence in the Office of the Director of National Intelligence and co-chair of the committee that wrote the report. ‘Protecting and strengthening the nation’s ability to innovate in order to respond to military and commercial challenges is at least equally — and perhaps vitally more — important.’
To that end, the U.S. should strive to maximize the amount of work that can be appropriately performed in an open research environment — an approach that will promote U.S. leadership in science and engineering, attract top talent, and enhance discoveries that lead to new technologies, the report says, urging the president to issue an executive order to that effect.
However, not all research-related work is appropriate for an open environment, the report says. An interagency process is needed to identify and assess threats or vulnerabilities of strategic significance to U.S. technological leadership and other national interests, to develop strategies for managing those risks, and to oversee the execution of those strategies.
The report recommends steps the federal government should take to strengthen the nation’s capacity to innovate while managing risks associated with critical technologies, including:The president, through an executive order, should clearly reaffirm that it is the policy of the United States that fundamental research, to the maximum extent possible, should remain unrestricted. In addition, the executive order should direct the White House Office of Science and Technology Policy (OSTP), in coordination with federal agencies, to define criteria for open and restricted research environments within 120 days. The executive order should direct federal agencies to designate the appropriate environment for work under a grant or contract prior to the award and to maximize the amount of sponsored work that can be performed in open research environments.
The National Science Foundation should fund and coordinate an effort to define the elements in the U.S. innovation system that are essential to developing, attracting, and retaining top scientific, research, engineering, and innovation talent necessary for U.S. leadership in technology innovation and produce a report within 180 days detailing its findings. Based on those findings, OSTP should coordinate with federal research agencies, the U.S. Department of Homeland Security, and the U.S. Department of State to develop a national strategy to promote leadership in science and technology through policies and programs aimed at developing domestic research talent, expanding opportunities for international research collaboration, and attracting and retaining top talent in the U.S. for training and employment.
The National Security Council, the National Science and Technology Council, and the National Economic Council should develop and lead an interagency process for identifying and assessing threats or vulnerabilities of strategic significance to U.S. technological leadership and other national interests. For each threat, the process should develop an associated risk management strategy and evaluation rubric that would be used by federal agencies to address the resulting risk. The execution of these risk management strategies should be coordinated and overseen by the above interagency process to ensure a “whole-of-government” approach.
The National Science and Technology Council, the National Security Council, and the National Economic Council should jointly develop a new policy framework for the identification of strategically important platforms and for the development of coordinated risk management strategies covering their development, control, and use.”
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