US Trails China in Key Tech Areas, New Report Warns

An employee works on the production line of LED epitaxial wafers at a factory of Jiangsu Azure Corporation Cuoda Group Co. in Huaian in China's Jiangsu Province in March 2022.

An employee works on the production line of LED epitaxial wafers at a factory of Jiangsu Azure Corporation Cuoda Group Co. in Huaian in China's Jiangsu Province in March 2022. Zhao Qirui/VCG via Getty Images

Ex-Google, DOD leaders paint dire picture unless U.S. organizes to win technology races.

Imagine a future in which the most skilled U.S. tech workers can’t find jobs, authoritarian regimes exert more power than democratic governments, freedom of expression is replaced by open censorship, and no one believes the U.S. military can deter conflict. All this could happen if China surpasses the United States in key technology areas, according to a new report from the Special Competitive Studies Project, led by former Deputy Defense Secretary Bob Work and Google co-founder Eric Schmidt. 

The 189-page report, released on Monday, looks at current and future technology competition between the United States and China—from microelectronics supply to tech talent retention to the effects of emerging technologies like artificial intelligence on tomorrow’s national security. 

“In our judgment, China leads the United States in 5G, commercial drones, offensive hypersonic weapons, and lithium-battery production,” the report said, while the U.S. is ahead in biotech, quantum computing, cloud computing, commercial space technologies, and has a small lead in artificial intelligence. 

Work said Monday’s report is an effort to help retain U.S. leads and reduce Chinese advantages gained during the decades-long war in Afghanistan. 

“We didn't really respond as we normally have done in the past,” Work told reporters during a Defense Writers Group event. “This is a real technical competition. It is absolutely critical to the future of our country as well as democracies worldwide, and we must win it. And this starts to give recommendations on how we organize ourselves for the competition and how do we win it.”

The report is a continuation of the National Security Commission on Artificial Intelligence, which published several reports and hundreds of recommendations, including how the Defense Department should buy software and organize itself to take advantage of advances in AI.  

“The solution to the problems that China has is more investment in areas that are competitive with us,” Schmidt told reporters. 

He said that despite its internal problems, the country will spend more to develop AI, quantum, software, semiconductors, biosecurity, biosafety, and synthetic biology. 

The report lays out dozens of recommendations for policy-makers and leaders in the military and private sector about how the United States retains (or finds) the edge in various areas. 

Some of the top recommendations include:

  • Develop a “national process for horizon scanning for emerging technologies and rivals’ strategies that draws on a range of experts.” Create strategic plans to reach milestones in specific technology areas. 
  • Launch an effort, possibly with government funds, to move new technologies like 5G and AI from the lab to market more quickly. 
  • Bolster tech-regulatory bodies to oversee new products, services, and uses involving artificial intelligence and ensure that they work in the public interest. “Existing regulatory bodies have the sector expertise that allows for tailoring rules, ensuring AI governance complements existing nonAI governance, and assessing impacts,” the report said. 
  • Develop a technology alliance among democratic allies to coordinate policies, investments, etc. 

The report also features a number of recommendations specific to the U.S. military, such as

  • Fully embrace distributed, network-based operations to give more power to smaller, more nimble units that can act across land, sea, air, space and cyberspace (or multi-domain.) “Develop and experiment with smaller…highly-connected, and organically resilient, multi-domain units that practice network-based decision-making and effects, not just hierarchy-based decision-making.”
  • Undermine adversaries’ ability to censor networks and media. This would be especially important if China invades Taiwan. “By helping ordinary Chinese citizens during times of war thwart automatic censors and by placing the burden on regime human censors, the United States can help expand the public discourse beyond the regime’s control.”
  • Plan for what you can’t plan for, because new asymmetric tools are changing the battlefield faster than military doctrine and old-fashioned planning can keep up. “The current method of war planning runs the risk of producing a situation in which the U.S. military could run out of munitions or assets before reaching the end of conflict. Second, the resource straight-jacketing embedded in the current planning methods limits the development of innovative concepts and reduces the ability of Combatant Commanders to influence the development of new capabilities.”
  • Develop war plans that attack biases and weaknesses in adversarial AI by manipulating data, among other techniques. “In the near term, the focus of U.S. counter-autonomy efforts could include identifying means and generating access to take over adversaries’ AI-enabled systems to extend our sensing deep inside their territory and within its decision-making.”

Drone warfare

The report notes that drones have been crucial to Ukraine’s effort to fight off Russian invaders, a harbinger of wars to follow.

“Drones will be as important in the first battle of the next war as artillery is today,” Work said. “So we are seeing, already, how drones are going to be more central to operations for the United States and our allies and see that happening in real time and Ukraine.”

Such weapons will be “ubiquitous throughout the battlefield,” the former deputy defense secretary said, which will make outlining specific use cases, tactics and procedures that avoid unintended engagements against civilians, among other scenarios, so important.  

“Guarantee these things are going to be everywhere. They already, you know, dominate the battlefield,” Work said.

Indeed, Schmidt, who recently traveled to Ukraine, said the local tech industry was helping the beleaguered country put drones and autonomy to work.

“There's a whole focus around getting an army of drones and they seem to be very good at using drones in their war tactics. And the programmers and so forth, have been very good at hacking the drones and using them,” he said. “And I can just report that based on my small amount of data that the Ukrainian tech industry really did make a contribution to the fight.”

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