America's 21st Century Sputnik Moment
When the Soviet Union launched its Sputnik 1 satellite in 1957, the communist superpower won the first battle of the Space Race. This "Sputnik moment" spurred the United States to invest heavily in a desperate come-from-behind initiative to promote technological innovation. It paid off when we put the first man on the moon 12 years later.
Today, our policymakers face another rival power pursuing a decisive technological edge, China. So far, however, our leaders don't seem inclined to propel America to new technological frontiers. In some cases, they are even promoting policies that would cripple American innovation.
Government leaders need to learn from the past and commit to aggressive innovation policy as we face a new Sputnik moment from China. We can start by appreciating the true source of America's success in tech innovation rooted in the Constitution: strong intellectual property protection to incentivize and reward the discoveries of innovators and entrepreneurs and those who invest in them.
China has a clear strategy when it comes to technological innovation. Its leaders want to take the best of the world's inventions and manufacture them at low cost — while investing heavily in new research and education, and controlling technology standards that define markets and trade.
When it comes to 21st-century technologies, China is already achieving these goals. Consider semiconductor chips, the brains inside every modern device from pacemakers to automobiles. America invented the semiconductor but is now critically dependent on foreign sources of supply. Xi's "Made in China 2025" industrial policy called for sufficient investment in semiconductor manufacturing to make China a net exporter, a milestone they have now reached.
China's drive for tech dominance is all-consuming. Huawei, the state-subsidized Chinese telecom giant, has over 90 contracts to build 5G networks — and collects data on customers for the Chinese government. Chinese patents for deep learning — the cutting edge of AI — outpace U.S. patents on the same subject six to one.
Let's not forget the rapidly developing fields of cryptocurrency and quantum computing. Using blockchain technology, Beijing recently created a digital version of its currency, the yuan, in hopes of displacing the dollar as the world's reserve currency. China also beat the United States to space in quantum communications and is racing to be the first to develop the most powerful quantum computer.
Despite these challenges, the United States still leads in one key category — biotechnology, specifically new biopharmaceuticals. American firms and labs create two-thirds of all new medicines each year and have 80% of all drugs in development globally. "Made in China 2025" includes a goal to create more new medicines, but the FBI has uncovered one way it aims to achieve this goal: by stealing researchers' grant proposals to the National Institutes of Health.
The continued success of the American biopharmaceutical sector underlines the importance of protecting institutions and systems that promote innovation. Chief among them is U.S. intellectual property law. By giving companies and inventors exclusive rights to sell their inventions for a limited time, patents and other IP protections drive billions of dollars into private-sector R&D, manufacturing and jobs annually. American innovation and the American economy depend on private enterprise, which in turn depends on intellectual property to protect its investments. Weaken IP, and private investment in innovation will dry up.
Unfortunately, the current administration and many lawmakers seem eager to erode those protections. In a well-meaning but ultimately ineffective attempt to make vaccines more widely available, Biden's team announced support for a World Trade Organization waiver on Covid-19-related IP, a move that would harm the very companies that invented vaccines in record time. Some legislators are also seeking to weaken the Bayh-Dole Act, a foundational law that enables companies and startups to commercialize products based on underlying research at universities and federal labs. Proposed changes would strip IP rights from companies that have invested billions in new technology.
Some U.S. lawmakers recognize the danger here — and the urgent strategic need to revitalize R&D for new technology leadership. Last year, the Senate passed the bipartisan U.S. Innovation and Competition Act, which would invest $250 billion into research, development, and domestic manufacture of 21st-century technologies like semiconductors. Unfortunately, the House has yet to vote on the bill.
If the Space Race taught us anything, it's that superpower competition is about technological dominance. China understands this. American leaders need to put promoting innovation here on the fast track.
Walter G. Copan, PhD, is vice president for research and technology transfer at Colorado School of Mines. He previously served as director of the National Institute of Standards and Technology. Andrei Iancu is a partner at Irell & Manella, LLP. He previously served as director of the United States Patent and Trademark Office. They are senior advisers to the Center for Strategic and International Studies and co-founders of its Renewing American Innovation project.
