Lexington Institute Warns Anti-Innovation Legislation Will Jeopardize America’s Ability to Compete Against China
WASHINGTON, DC – The Lexington Institute, in partnership with the American Edge Project (AEP), today published a white paper arguing that technology serves as an indispensable arsenal of democracy in the 21st century. While the United States has led the world in technological innovation over the past 80 years, U.S. leadership in this critical space is threatened and no longer guaranteed.
The report – The New Arsenal Of Democracy: The U.S. Commercial High-Tech Industry’s Role In Countering The China Threat – warns that anti-innovation legislation currently being considered by Congress will undermine domestic technology development and jeopardize America’s ability to compete with China in the coming years and decades.
“The U.S. technology industry not only protects the national security of America and her global allies, but it also is an indispensable driver of our economic prosperity,” said Doug Kelly, CEO of American Edge. “Instead of targeting U.S. tech with anti-innovation legislation that will benefit our foreign adversaries, Congress should support more domestic innovation and check China’s global ambitions.”
The Lexington Institute’s new report highlights the central role technology plays in the 21st century and the threat we face from China and other foreign adversaries, who are actively working to supplant America as the global leader in technological innovation.
Specifically, Lexington focused on a set of advanced dual commercial and military use technologies which the world’s leading nations are struggling to understand and master. These technologies most critical to our national and economic security include artificial intelligence (AI), machine learning (ML), quantum technology, 5G/6G communications, microelectronics, extended reality, cybersecurity, and the Internet of Things (see page 1 of the report).
Lexington found that a global “virtuous cycle” results from private sector U.S. innovation and leadership. By America building and exporting the best innovative tech for everyday applications, national economies are strengthened. U.S.-developed technologies help export and reinforce U.S. values. Global access and sales by U.S. companies, with their practices and values shaped by Western norms, enhance U.S. national security by supporting both private and governmental ties and increasing global transparency (page 3).
The study also found that major U.S. tech players encourage competition. Far from stifling competition, the paper found that larger tech firms have spurred competition, encouraging the rise of numerous companies that seek to compete directly with their bigger rivals (page 9).
Lexington highlighted the following dangers of anti-innovation legislation currently before Congress:
- Anti-innovation bills are a “self-inflicted” wound in our race against China: Congress is considering a number of bills, including the American Innovation and Online Choice Act (AICOA), which could hamstring the U.S. tech industry, reduce innovation, interfere in the marketplace, and ultimately hand victory to China in the strategic and economic competition in high tech. The common thread of these bills: they would harm the U.S. high-tech sector and, consequently, the U.S. economy and national security (page 9).
- Overall implications if China wins tech race: If China wins the race for the technologies of the future, it will erode long-standing U.S. military advantages, weaken the U.S. economy, undermine American freedoms, and be an assault on Western democratic values across the globe (page 5).
- Economic implications: Losing the high-tech race to China will mean a reduced GDP for the U.S., slower job growth, fewer high-paying jobs, and lost opportunities for trade. Commercial U.S. tech companies will be less competitive, have lower R&D levels, and be less able to scale critical technologies and support national security through U.S.-sourced technologies. Fewer tech jobs mean even fewer students in the STEM field, exacerbating existing shortages in people with the skills to participate in the new economy (page 6).
- Political implications: If China dominates these critical advanced technologies, it can impose its own totalitarian values on the way the world communicates, operates, and governs itself, helping advance a “digital authoritarianism” of ubiquitous surveillance and control over the flow of information that stifles the free flow of ideas (page 7).
- Anti-innovation legislation would undermine U.S. private sector research and development (R&D) investments: China’s political leadership drives R&D spending, which will soon surpass that of the United States. The private sector is now the driver for investment and innovation in America, with two-thirds of U.S. investments in R&D coming from the private sector. But anti-innovation bills would damage private sector R&D spending, with one study finding that the immediate cost of these anti-tech bills would be approximately $300 billion, resulting in fewer resources available to fund innovation (page 10).
- Solutions to ensure the U.S. wins the high-tech race: Lexington outlines several solutions to help the United States maintain its technology edge: a) increased public-private partnerships between key agencies and private-sector entities; b) View tech companies as partners, not enemies, in tackling our country’s toughest challenges; c) Hold hearings to fully understand the national security implications of anti-innovation proposals, including creating a national commission to study the issue and provide a report with recommendations (page 13).
To read the analysis in its entirety, please click here.
The American Edge Project is a coalition of domestic organizations representing a cross-section of U.S. innovators who are dedicated to telling the story about technology’s positive influence on America’s economy and the vital role innovation plays in our society. Former New Mexico Governor Susana Martinez, former U.S. Representative Chris Carney, and former Federal Election Commission Chairman Bradley A. Smith are directors of the American Edge Project. AEP’s National Security Advisory Board is comprised of Former White House Counterterrorism and Homeland Security Advisor Frances Townsend; retired four-star General Joseph F. Dunford Jr., United States Marine Corps (USMC), who served as former Chairman of the Joint Chiefs of Staff; and former Acting Director of the Central Intelligence Agency (CIA), Michael J. Morell. Former U.S. Senators Saxby Chambliss (R-GA) and Kent Conrad (D-ND) serve as Co-Chairs of the Project’s Economic Advisory Board. Former U.S. Senator Heidi Heitkamp (D-ND) and former U.S. Representative Greg Walden (R-OR) serve as Co-Chairs of the Project’s Open & Accessible Internet Advisory Board. Visit AmericanEdgeProject.org for more information.