13 July 2022

The Political Economy of the Metaverse

Key takeaways:

The metaverse is a persistent online world with a developed economy, that can be experienced in virtual reality (VR) by unlimited numbers of people.

Current talk of the metaverse is primarily a narrative about the growth potential of the video gaming and enterprise software sectors, in the context of advances in VR technology and changes to everyday life brought about by the Covid-19 pandemic.

Major technological and governance breakthroughs will be required before the metaverse can be built.Efforts to realize the metaverse are more likely to be led by incumbent American and Chinese big tech companies than European challengers.

US-China in a heated microwave weapon race


This month, the US is wrapping up tests of its high-powered joint electromagnetic non-kinetic strike weapon (HIJENKS) at Naval Air Station China Lake.

HIJENKS takes advantage of major military powers’ ever-increasing reliance on sophisticated electronics, making them vulnerable to electronic attacks that aim to destroy these systems, damage sensitive components, deny their use and degrade their capabilities.

HIJENKS may be useful in conventional wars or against adversaries with no defense against cruise missiles such as insurgents, defense analyst Kelsey Atherton notes in C4ISRNET. However, he cautions that HIJENKS may be less useful against low-tech adversaries with nuclear weapons such as North Korea.

Russia poses tough EW problem for Ukrainian UAVs: RUSI

Greg Waldron

A new think tank report highlights the challenge that Russian electronic warfare (EW) poses for Ukrainian unmanned air vehicles (UAVs).

In a new report about the war in Ukraine, the Royal United Services Institute (RUSI) found that the lifespan of Ukrainian UAVs is “roughly seven days”, although this varies by system.

Source: UKRSPEC Systems

The Ukrainian Army has used the Leleka-100 UAV since 2015

The report, authored by Jack Watling and Nick Reynolds, says Russia’s ground-based EW systems can jam control frequencies, force UAVs to land, or help direct artillery and missile fire against ground control stations.

India has interests on both sides of US-China divide. Cold War holds clues for path ahead


The lengthening shadow of coalition politics over the global strategic landscape is reflecting in several individual cooperative endeavours of rival groups led by the United States and China. NATO, a military alliance comprising 30 countries, unveiled its new Strategic Concept on 29 June. For the first time, China appears to be in NATO’s gunsight—it notes that Beijing’s stated ambitions and coercive policies ‘challenge their interests, security and values’. NATO also flagged the deepening strategic partnership between China and Russia, and their mutually reinforcing attempts to undercut the rule-based international order, including freedom of navigation on the high seas.

NATO’s strategic concerns about China are anchored in the Indo-Pacific, which is treated as a geo-strategic concept. With the expansion of China’s maritime capability and the US’ ability to lead an expansive Western military bloc, there is an increasing possibility of confrontations of various kinds and the NATO countries are collectively bound to defend any of their members. This seeming inevitability should be a major concern for India.

A massive leak of Chinese government data on hundreds of millions tests a new privacy law

Lili PikeBenjamin Powers, and Jason Paladino,

For sale: personal information on “billions” of Chinese citizens. That’s the offer a person with the alias ChinaDan made on a hacking forum on June 30, proposing a price tag of 10 bitcoins, or roughly $200,000, for the data trove. If the breach is as expansive as claimed, it could be one of the largest in history.

Grid downloaded and reviewed a sample data set the hacker made publicly available and found over 700,000 records containing sensitive personal information from ID numbers to marital status and religion to crime records.

Security warning after sale of stolen Chinese data

Joe Tidy

In an advert on a criminal forum, later removed, the user said the data was stolen from Shanghai National Police.

The hacker claims the information includes names, addresses, National ID numbers and mobile phone numbers.

Cyber-security experts have verified that at least some of a small sample of the data offered is real.

The 23 terabytes of data is thought to be the largest ever sale of data on record and was being offered for $200,000 (£166,000) until the post was removed on Friday.

No Chinese officials have responded to the news and President Xi did not make direct reference to the data sale.

But, according to the South China Morning Post, the president has asked public bodies in China to "defend information security… to protect personal information, privacy and confidential corporate information" to ensure people feel secure when submitting data for public services.

How Will the New Cold War With Russia End?

Paul R. Pillar

THE WAR in Ukraine has changed American emotions and attitudes toward Russia more than it has changed Russian threats to American interests. The largest land war in Europe since World War II does, of course, have material and not just attitudinal effects, and the short term presents dangers of escalation into a wider war. But the West’s relations with Vladimir Putin’s regime were already problematic before the war, including worries about the Baltic states’ vulnerability to Russia. The Russian military’s operations in Ukraine do not increase its ability to operate against the West, and its performance has instead demonstrated it to be less of a threat than many had supposed it to be.

The United States needs to guard against the punishment and isolation of Russia becoming mere expressions of outrage over Putin’s brutal war of aggression. The outrage is justifiable, but justified rage is not the same as effective policy. U.S. policy needs to take account of continuing realities about Russia, including insecurities that were not just created by Putin, an authoritarian culture that made a Putin possible in the first place, and Russia’s position as a major power with one of the two biggest nuclear arsenals in the world.


Ann Wright

While the world’s attention is focused on the Russia-Ukraine conflict, halfway around the world in the Pacific Ocean, U.S. and NATO confrontation with China and North Korea is increasing dramatically.

Ever since the Obama administration’s “Pivot to Asia,” which was created in part to take the spotlight off the decision to surge troops in Afghanistan and Iraq in the failed U.S. war policies in the Middle East, U.S. military naval and air presence in the Western Pacific has been steadily increasing. During the Obama administration, Washington used “freedom of navigation”—an integral part of the Law of the Seas treaty that the United States has failed to ratify—to send large numbers of U.S. naval ships into contested areas in and around the South China Sea. Under the Trump administration, freedom-of-navigation armadas sailed in an even more confrontational manner.

There Are No Core U.S. National Interests at Stake in Ukraine

William Ruger

SOMEBODY HAS to say it: the war in Ukraine does not materially affect the permanent national interests of the United States or the geopolitical landscape in which we advance those interests. This conclusion—for good or bad or anywhere in-between—shouldn’t significantly impact the future of U.S. foreign policy. The war may tug on our heartstrings for sure, but it should not dissuade us from making the necessary changes to our grand strategy that position our country for long-run success, like our recent withdrawal from Afghanistan. These changes include increasing our focus on China as our most important strategic competitor, extricating ourselves from Europe and the Middle East, and emphasizing domestic renewal over ostensible altruism abroad.

However, there are important lessons for the future of U.S. foreign policy that can be learned from the conflict, especially regarding the offense-defense balance and Russia’s revealed conventional capability. But these aren’t the ones that you’ll hear from the foreign policy establishment, which will always spin positive outcomes or trouble overseas as reasons to redouble our commitment to the primacist status quo they favor.

U.S. military’s newest weapon against China and Russia: Hot air


The Pentagon is working on a new plan to rise above competition from China and Russia: balloons.

The high-altitude inflatables, flying at between 60,000 and 90,000 feet, would be added to the Pentagon’s extensive surveillance network and could eventually be used to track hypersonic weapons.

The idea may sound like science fiction, but Pentagon budget documents signal the technology is moving from DoD’s scientific community to the military services.

“High or very high-altitude platforms have a lot of benefit for their endurance on station, maneuverability and also flexibility for multiple payloads,” said Tom Karako, senior fellow for the International Security Program and Missile Defense Project director at the Center for Strategic and International Studies.

The Case For A Stalemate In Ukraine Is Fatally Flawed

Alexander Motyl

Barry R. Posen’s just-published article (“Ukraine’s Implausible Theories of Victory: The Fantasy of Russian Defeat and the Case for Diplomacy now in Foreign Affairs”) is an exercise in wishful thinking on the one hand and willful inattention to inconvenient facts on the other. The result is an argument that is as implausible as those he claims to reject, both because it rests on unconvincing logic and because it ignores certain elementary empirical realities.

The Problems with Posen’s Ideas on Ukraine

It is striking just how often Posen resorts to the word “unlikely.” It appears a total of seven times, usually at critical junctures of his argument. The word “likely” appears six times. As I illustrate below, these words are intended to convey that “theories” of Ukraine’s victory are implausible, while his own theory of stalemate is plausible. In fact, his case against a Ukrainian victory is weak and his case for negotiation is even weaker. And that means that the case for a Ukrainian victory is, by the same token, far stronger than Posen cares to admit.


Stavros Atlamazoglou

It has been 128 days since the Russian invasion of Ukraine began. On Friday, the Russian forces are pushing hard in the Donbas and are advancing slowly and deliberately.

The battle for Lysychansk

Over the past 24 hours, the Russian forces have made gains in and around the Lysychansk oil refinery, which is located southwest of the Ukrainian city’s center. But this is just one of three Russian axes of advance from the south that aim to cut off the Ukrainian positions from their lines of communication and supply in the west.

A glance at the map below best describes the situation in the Donbas right now. However, although it seems that a sea of red threatens to flood the entire Donbas and trap the Ukrainian forces, the situation on the ground is not as dire for the Ukrainians as the map might suggest.


Alex Hollings

Today, America prizes air superiority in its approach to warfare, but there’s a growing sentiment among many within the defense apparatus that dogfights, or close quarters air-to-air combat, is a thing of the past. Advanced sensors and highly effective air-to-air weapons that can reach beyond visual ranges suggest air combat will now take place at longer distances than ever, making the need for aerobatic air superiority jets a thing of the past.

This sentiment can be found in statements made by many modern fighter pilots, but might be best reflected in this post from an F-16 pilot that went viral in aviation circles shortly after it went up:

“The Raptor is about as cool as it gets, and it is the greatest air superiority fighter the world has ever seen, but like the F-15C that it was originally designed to replace it is an airplane without a real mission in modern conflict,” Air Force F-16 pilot Rick Scheff famously explained in an online discussion.

There Is No Cyber Bullet

Lieutenant Commander Eric P. Seligman, 

Since the dawn of warfare, the prowess of combatants has been defined by how effectively they bring to bear the weapons of their time. Warriors hone their craft over years, their weapons becoming extensions of their own bodies. Whether these weapons be the sword, bow, musket, M-16, or F-35, they change little over the course of a warrior’s career. This, however, is not the case for the cyber warrior. This warrior wields instruments of amorphous design and exotic purpose, known to most as “cyber weapons.”

While the Department of Defense Dictionary of Military and Associated Terms has no definition of “weapon,” the word is used more than 150 times to define various other terms. One of these is the well-known expression “fires,” which is defined as: “The use of weapon systems or other actions to create specific lethal or nonlethal effects on a target.”1 This is of particular interest, as the term “cyber fires” has come into heavy use when referring to offensive cyber operations and related activities.2

China accuses NSA of FoxAcid hack attack on science research groups

Zhang Tong

China’s research institutes have come under a cyberattack launched by the US government, according to China’s cybersecurity authorities.

The National Computer Virus Emergency Response Centre in Beijing said on Wednesday that FoxAcid, a hacking program linked to the US National Security Agency (NSA), was found in hundreds of key information systems used by scientific research institutes.

The centre said the attack could signal NSA preparations for larger-scale cyberwarfare.

“We encourage all users from all over the world to be aware of the risk and the fact that Chinese research institutions were not the only victims,” the centre said.

China’s Cabinet Stresses Cybersecurity After Data LeakState Council meeting discusses need to safeguard information

China’s cabinet stressed the need to bolster information security, following a huge leak of personal data that could be the largest cyber-attack in the country’s history.

A State Council meeting led by Premier Li Keqiang emphasized the need “to improve security management provisions, raise protection abilities, protect personal information, privacy and commercial confidentiality in accordance with the law,” according to the official Xinhua News Agency. These measures would allow the public and businesses to “operate with a peace of mind,” the report added.

Xinhua didn’t directly reference the breach, and other state media agencies have so far been silent about the incident. Earlier this week, unknown hackers claimed to have stolen data on as many as a billion Chinese residents after breaching a Shanghai police database. The purported theft of more than 23 terabytes of information has exposed potential data and security lapses and set the technology industry abuzz.

How China uses search engines to spread propaganda

Jessica Brandt and Valerie Wirtschafter

Users come to search engines seeking honest answers to their queries. On a wide range of issues—from personal health, to finance, to news—search engines are often the first stop for those looking to get information online. But as authoritarian states like China increasingly use online platforms to disseminate narratives aimed at weakening their democratic competitors, these search engines represent a crucial battleground in their information war with rivals. For Beijing, search engines represent a key—and underappreciated vector—to spread propaganda to audiences around the world.

On a range of topics of geopolitical importance, Beijing has exploited search engine results to disseminate state-backed media that amplify the Chinese Communist Party’s propaganda. As we demonstrate in our recent report, published by the Brookings Institution in collaboration with the German Marshall Fund’s Alliance for Securing Democracy, users turning to search engines for information on Xinjiang, the site of the CCP’s egregious human rights abuses of the region’s Uyghur minority, or the origins of the coronavirus pandemic are surprisingly likely to encounter articles on these topics published by Chinese state-media outlets. By prominently surfacing this type of content, search engines may play a key role in Beijing’s effort to shape external perceptions, which makes it crucial that platforms—along with authoritative outlets that syndicate state-backed content without clear labeling—do more to address their role in spreading these narratives.

Can China and the EU Work together amidst Difficulties?

Cui Hongjian

As a geopolitical confrontation with global implications in the European region, the Russia-Ukraine conflict has an important and complex impact on China-EU relations. First, due to the different perceptions of the nature of the Russia-Ukraine conflict and related interests, there are differences in positions and discrepancies in mutual expectations between China and Europe, with political mutual trust being put to the test. Second, the Russia-Ukraine conflict along with the sanctions and counter-sanctions struggle between the West and Russia have exposed the fragility of the current international economic, energy and supply chain system, causing continuous damage to the foundation of economic globalization, thereby also eroding the economic cornerstone for China-EU cooperation. Finally, as the major powers of the US, Russia and Europe are involved in the conflict in different ways and to varying degrees, a highly complex pattern of major power relations has emerged, exacerbating instability in the transforming period of the international order and putting Sino-European relations under greater strategic pressure. Although the Russia-Ukraine conflict has become an uncertain factor in China-EU relations, an early resolution of the conflict in a peaceful manner, avoiding humanitarian crises, reducing economic and livelihood losses and maintaining the stability of the international landscape is in the common interest of the international community, including that of China and Europe, and should be the direction of joint efforts by both sides.

How commercial satellite imagery could soon make nuclear secrecy very difficult—if not impossible

Igor Moric

Emerging capabilities of commercial satellite imagery are enabling high-resolution observation of objects and activity over large areas or territories of entire states with a sub-hourly frequency. Existing constellations are being expanded and new ones are planned promising even higher resolution and frequency of observations, on a global scale. Coupled with AI-powered automatic monitoring and detection capability, this rapid technology development and deployment of advanced commercial satellites could soon make it very difficult—if not impossible—to establish secret nuclear programs or maintain secrecy around existing ones.

The burst of open-source intelligence. Satellites operated by private companies located in more than 30 countries now provide imagery that once was accessible only to a handful of governments. One must look no further than the daily coverage of the Russian invasion of Ukraine; satellite images captured the massing of Russian forces on the Ukrainian border, columns of military units, destroyed buildings, burning vehicles, and bodies scattered over streets. These images of war are now on our screens with unprecedented speed and detail. They are shared over social media by open-source investigators and combined with ground imagery of geo-located events captured by civilians with camera phones and soldiers with drones—a framework often referred to as open-source intelligence or OSINT.

Gas Becomes a Second Front in Putin’s War

Alan Crawford

Energy shortfalls were always part of the equation in the response to Russia’s invasion of Ukraine. But few were prepared for gas becoming a second front in President Vladimir Putin’s wider conflict with the US and its allies.

In less than five months of war, Moscow has retaliated against successive waves of international sanctions by tightening its supplies of natural gas to Europe. That’s contributed to a spike in prices, stoking inflation that’s hitting consumers and governments from the UK to Bulgaria.

It’s also triggered a free-for-all as Europe competes on the global stage to secure alternatives to Russian gas. With no time to build pipelines, countries from the Americas to the Middle East and Africa are being courted for shipments of liquefied natural gas.

How volunteers can help defeat great powers

Liam Collins and John Spencer

The vast majority of Ukraine’s volunteers would never pass the physical fitness tests of the U.S. Army. And yet earlier this year, they pulled off a feat almost unparalleled in modern warfare: they helped defeat one of the largest standing armies in the world and held the capital. The Battle of Kyiv proved that volunteers could shape the course of a war, which holds important implications for the future of war, especially between large powers and their smaller neighbors.

When Russia’s 150,000-man army invaded Ukraine from multiple directions on Feb. 24, many analysts thought Kyiv would fall in a matter of days. What these analysts and the Russians did not anticipate was the will and capability of Ukraine’s “volunteers” and the important role that they would play in Kyiv’s defense. That is because the Russians expected the resistance to resemble the same feeble forces they witnessed in 2014, when they invaded and annexed Crimea with ease.

Relative Weakness: The Secret to Understanding Irregular Warfare

Dr. Douglas A. Borer and Dr. Shannon C. Houck

Irregular warfare is an approach to peer-to-peer competition that Congressional legislators and civilian policymakers must better understand. Irregular warfare is how the Taliban drove the Western Alliance out of Afghanistan, and it is how Ukraine is presently checking Russia’s invasion of its territory. As these cases show, in the year 2022, the weak have won (and can win) wars. Knowing how to fight from a position of relative weakness is the true secret to understanding irregular warfare.

One essential requirement is confessional. The United States is often weak, but it is usually unwilling to recognize, let alone admit, its common weaknesses. For instance, in Afghanistan (and subsequently in Iraq), the US went to war with a belief that inside every Afghan was an American waiting to jump out. All we had to do is show up, remove their bad leaders, show them how liberal democracy works, provide economic and technical aid, and they would all commit themselves to giving up the old ways of sorting things out and resolve conflict through peaceful means (Note: a commitment to peaceful conflict resolution is the primary requirement for a working democracy). It didn’t happen. Bottom line: Naïve western egocentrism contributed to war loss in Afghanistan, and nearly did so in Iraq. We need to stop thinking this way or we will lose more wars than we win.

Possible Assumptions Useful for Gaming the First Year of the Ukrainian Conflict

Jim Rohrer

Predictions and expectations about the outcome of the war in the Ukraine have been fraught with peril. The initial invasion triggered fears of a rapid Russian victory. Plucky and effective defense by Ukrainian forces generated euphoria and heady hopes of pushing the Russian bear all the way out of Ukraine; nothing less than complete victory would be acceptable. When the war shifted toward the east and south, experts began expecting a prolonged conflict. After four months of war, we now have more information that could help develop assumptions about how the conflict will unfold by the end of its first year. Developing such assumptions is a necessary step for wargaming in real-time.

The Timeline

After warnings from the intelligence community, Russian forces launched their attack on February 24, 2022, driving toward Kyiv and a quick victory. After one month, the drive stalled and the Russian focus shifted toward the Donbas region. By April 1, Russia had withdrawn from the Kyiv region. A new commander was appointed over the Russian forces. By mid-April, NATO countries were increasing their contributions to the Ukrainian war effort, including field artillery. A counter-offensive toward Kharkiv was launched by Russia in May and in the south Mariupol fell to the Russians May 16. A clear and stable front line formed in eastern Ukraine, with Russian attempts to break through being stymied. The United States supplied an artillery system to Ukraine with a range of 70 km. Russian forces began making gains in the east, pushing the line westward and taking control over one town after another. Reports about dissatisfaction among Ukrainian soldiers began to filter out of the area despite a highly-professional information management by the Ukrainian government.

ussian and Ukrainian Forces Prepare for Next Phase of Battle for Donbas

Isabel Coles and Evan Gershkovich

Russia’s invading army shelled the positions of Ukrainian defenders along the front line as both sides girded for the next battles for control of Ukraine’s east.

After capturing the city of Lysychansk over the weekend, Russian forces are turning their sights to parts of the Donetsk region that remain under Ukrainian control, including the cities of Slovyansk and Bakhmut.

The General Staff of Ukraine’s Armed Forces said Russian troops were seeking to strengthen their tactical positions on the Slovyansk front, firing on the area near the towns of Krasnopillya and Bohorodychne using mortars, rockets and other artillery.

Russian forces are now effectively in full control of the Luhansk region. Donetsk and Luhansk together form the heavily industrial Donbas region, where Russia has concentrated its firepower since retreating from around the capital Kyiv in March.

Ukraine is losing and the West is to blame


For a few weeks, I’ve been in Kiev, partly as a visiting fellow at leading Ukrainian think tank the Transatlantic Dialogue Center. Kiev is an astonishingly elegant and beautiful city; a premier league European capital.

The regular air raid warnings delivered on your phone, as well as by the baleful second world war-style sirens, are largely ignored now – despite the occasional missile strike.

Cafes and restaurants are open and largely busy. It was in one of the latter that I met a senior Ukrainian government official who had contacted me, expressing approval for something I had said in the international media.

“You know, don’t you, that this time next year, a Russian soldier could be sitting right where you are,” he said after a brusque introduction. “We are losing this war.”

U.S. must lead in shaping the future of the world

Clifford D. May

Altruism is a virtue. But altruism is not a serious basis for foreign policy. So, if you support Ukraine’s resistance to Russian conquest only because it’s a David-vs.-Goliath struggle you’re a good person. But you’re not thinking seriously about foreign policy.

To think seriously about foreign policy, you need to ask: What is in the American national interest?

To answer, imagine the world Americans and other free people can shape, and contrast that with the world the Americans’ enemies want to shape. Consider not only yourself but also your children and grandchildren. And remember: This is a binary choice.

On that basis, would the failure of Vladimir Putin’s attempt to conquer Ukraine be in the American national interest?

War, protest and spiking prices: How spiraling inflation is setting the world on fire

Nikhil Kumar

This is just a partial snapshot of what happened in June: In Zimbabwe, striking nurses and doctors brought state-run hospitals to a standstill for almost a week; in Ecuador, angry protesters paralyzed the capital, Quito, attacking government buildings and clashing with police; next door, in Peru and also in Argentina, truckers went on strike; and on the other side of the world, opposition parties held protest marches across Pakistan, while in nearby Sri Lanka, a popular uprising that has already unseated the patriarch of the country’s most powerful political family as prime minister continues unabated.

In each case, the protesters — Sri Lankan students, Zimbabwean nurses, Indigenous groups in Ecuador — were demanding action to deal with spiraling prices. Welcome, in other words, to the season of inflation unrest.

“There is real, real pain. People are suffering,” Paikiasothy Saravanamuttu, one of Sri Lanka’s leading political commentators and the executive director of the Colombo-based Center for Policy Alternatives, told Grid, talking about the situation in his country. “That is very visible in the popular protests we have seen.”

Biden’s Ukraine strategy risks prolonging a violent stalemate

Josh Rogin

Last week, the United States and its NATO partners convened in Madrid to celebrate their unity in support of Ukraine as it fights Russian President Vladimir Putin’s brutal aggression. This week, the grim reality on the ground is reemerging. Ukrainian forces don’t have the weapons they need to resist the Russian onslaught in the east, much less push Russian troops off their land.

The Biden administration deserves credit for giving Ukraine massive amounts of help and rallying European allies to the cause. At the same time, concerns are rising that President Biden’s risk-averse strategy amounts to giving Kyiv just enough weapons to maintain a violent stalemate but not to win the war. Winter is coming, and if Russia controls large chunks of Ukrainian territory when the Donbas region freezes over, Putin’s gains will become harder, if not impossible, to roll back in the spring.

Why the US must do a deal with the Taliban


In the aftermath of Afghanistan’s earthquake last week that killed at least 1,000 and rendered tens of thousands homeless, the Biden administration should take the Taliban up on its request for international assistance and look to find a more general modus vivendi with a government that, like it or not, now runs the country. The very survival of a large share of the Afghan population is at stake. America’s counterterrorism interests also would be well served by such an understanding.

Since last summer’s fall of the previous government, and with it the departure of most foreign assistance, as well as the reimposition of Western sanctions and freezing of most of the country’s modest foreign assets, Afghanistan is in crisis. The situation has partly stabilized in recent months but only at a far lower standard of living than existed before — and Afghanistan was always poor. Over the past year, Afghanistan’s economy has declined by perhaps 30 percent; 22 million of its 41 million inhabitants remain short on food and 8 million acutely so; the health system is in tatters. The dramatic improvements achieved since 2001 in rates of child survival (with death rates reduced about a third), average lifespan (with average longevity increased about six years), and other metrics of human welfare are being lost.

China: MI5 and FBI heads warn of ‘immense’ threat

Gordon Corera

FBI director Christopher Wray said China was the "biggest long-term threat to our economic and national security" and had interfered in politics, including recent elections.

MI5 head Ken McCallum said his service had more than doubled its work against Chinese activity in the last three years and would doubling it again.

MI5 is now running seven times as many investigations related to activities of the Chinese Communist Party compared to 2018, he added.

The FBI's Wray warned that if China was to forcibly take Taiwan it would "represent one of the most horrific business disruptions the world has ever seen".



The war in Ukraine is proving how critical innovation is to military success. As this war unfolds, the world watches as small commercial drones play an invaluable role on the battlefield. Meanwhile, small-satellite companies pivoted seemingly overnight to provide communications and intelligence infrastructure. Seemingly oblivious to this reality, some members of Congress are calling for an end to the Department of Defense’s longest running and most successful innovation program, while others have advocated for ending its first-stage innovation research grants.

The Small Business Innovation Research (SBIR) program, active since the 1970s, uses small phase-1 technology discovery and larger phase-2 prototyping efforts to evaluate, qualify, and prove emerging technology for military applications. SBIR’s opponents argue alternatively that the volume of proposals overwhelms reviewers, the contract value is too small to be useful, and a handful of companies gobble up the lion’s share of awards. Such arguments miss the mark as they fail to account for defense innovation’s foundational premises: attract maximum participation from technology startups, test their value in meeting government needs, and move only a select sub-group on to prototyping. The American innovation system will thrive when the SBIR program is structured to rapidly test and validate the maximum number of new technologies against government needs.