The important role innovation plays in economic growth and prosperity of the world’s nations is well documented. A recent report by the Council on Foreign Relations, a think tank specializing in U.S. foreign policy and international affairs, highlights the crucial role played by innovation in the area that doesn’t normally attract public attention: the American national security.

Composed by a diverse group of 20 experts and titled “Innovation and Security. Keeping Our Edge,” the report argues that after leading the world in technological innovation for the past three-quarters of a century, the United States is now at risk of falling behind its competitors. This may have profound negative consequences for U.S. national security.

The report points to the following troubling trends in the U.S. innovation policies:

• Federal investment in R&D as a percentage of the GDP is declining: from a peak of above 2% in the 1970s to about 1% in 2001 to 0.7% in 2018. In 2015, for the first time since World War II, the federal government provided less than half of all funding for basic research.
• U.S. current trade policies needlessly alienate the country’s long-term partners, resulting in rising costs for American tech firms and impeding the adoption of U.S. technology in foreign markets.
• A lack of strong educational initiatives at home has hurt the development of domestic STEM talent. At the same time, new immigration barriers diminish the country’s ability to attract highly educated foreigners. The number of new international students enrolling at American institutions fell by 6.6% during the 2017-2018 academic year. Further limiting the number of H-1B visas has hampered tech firms that rely on top global talent to staff their operations.
• A persistent divide between the technology and policymaking communities makes it more difficult for the Department of Defense and intelligence community to acquire advanced technologies from the private sector and to draw on technical talent.
• China has become a formidable strategic competitor challenging the U.S. leadership in a range of emerging technologies, such as AI and data science, advanced battery storage, advanced semiconductor technologies, 5G, quantum computing, robotics, genomics, and synthetic biology.

The report’s major recommendations are:

• Restore federal funding for R&D to its historic average, from 0.7% to 1.1% of GDP (or from $146 billion to $230 billion in 2018 dollars).
• Make an additional strategic investment in universities to the tune of $20 billion a year of federal and state monies for five years.
• Adopt moonshot approaches to society-wide national security problems that would support innovation in the key emerging technologies mentioned above. Encourage and support American startups working in this space.
• Make it easy for foreign graduates of U.S. universities in scientific and technical fields to remain and work in the United States. Automatically grant lawful permanent residence (“green card”) to those who earn a STEM master’s or doctorate degrees.
• While continuing to confront China on cyber espionage and IP theft, stop over-weaponizing trade policy. The best way to answer the China challenge is to compete more effectively. (“Slowing China down is not as effective as outpacing it.”)

The report makes it very clear that the United States urgently needs a national security innovation strategy to ensure its leadership in foundational and emerging technologies over the next 20 years. Actions are needed over the next five years. Although not saying this explicitly, the report leaves no doubt that the consequences of inaction will be dire.

 Image: https://www.cfr.org/blog/keeping-our-edge-overview-innovation-and-national-security-task-force-report