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1、A Report of the CSIS Renewing American Innovation ProjectAUTHORSSujai ShivakumarCharles WessnerThomas HowellInvesting in Science and TechnologyThe United States Needs to Up Its GameJUNE 2024Investing in Science and TechnologyThe United States Needs to Up Its GameAUTHORSSujai ShivakumarCharles Wessne

2、rThomas HowellJUNE 2024A Report of the CSIS Renewing American Innovation ProjectInvesting in Science and Technology|IIAbout CSISThe Center for Strategic and International Studies(CSIS)is a bipartisan,nonprofit policy research organization dedicated to advancing practical ideas to address the worlds

3、greatest challenges.Thomas J.Pritzker was named chairman of the CSIS Board of Trustees in 2015,succeeding former U.S.senator Sam Nunn(D-GA).Founded in 1962,CSIS is led by John J.Hamre,who has served as president and chief executive officer since 2000.CSISs purpose is to define the future of national

4、 security.We are guided by a distinct set of valuesnonpartisanship,independent thought,innovative thinking,cross-disciplinary scholarship,integrity and professionalism,and talent development.CSISs values work in concert toward the goal of making real-world impact.CSIS scholars bring their policy exp

5、ertise,judgment,and robust networks to their research,analysis,and recommendations.We organize conferences,publish,lecture,and make media appearances that aim to increase the knowledge,awareness,and salience of policy issues with relevant stakeholders and the interested public.CSIS has impact when o

6、ur research helps to inform the decisionmaking of key policymakers and the thinking of key influencers.We work toward a vision of a safer and more prosperous world.CSIS does not take specific policy positions;accordingly,all views expressed herein should be understood to be solely those of the autho

7、r(s).2024 by the Center for Strategic and International Studies.All rights reserved.Center for Strategic&International Studies1616 Rhode Island Avenue,NWWashington,DC 20036202-887-0200|www.csis.orgSujai Shivakumar,Charles Wessner,and Thomas Howell|IIIAcknowledgmentsThis report is made possible throu

8、gh general support to CSIS.No direct sponsorship contributed to this report.Investing in Science and Technology|IVContentsIntroduction 1Foundational Funding for CHIPS and Science on Hold 3Chinas Innovation Drive 5China:An Unprecedented Degree of Government Engagement 10Chinas Innovation Vulnerabilit

9、ies 13A Growing Challenge in Strategic Sectors 16Conclusion 26About the Authors 28Endnotes 30IntroductionThe United States is facing a challenge to its global leadership in science and technology that is more serious than any it has confronted since gaining that position after World War II.Within th

10、e relatively short span of two decades,China has emerged as a formidable rival,mounting a concerted drive to dominate key technology-intensive sectors and increasingly matching or exceeding the United States in resources committed.At the same time,the U.S.Congress is bogged down in protracted strugg

11、les over public spending and the role of government that have engulfed needed investments in science,research,development,and educationthe foundation of U.S.economic strength.The U.S.private sector remains more innovative than its Chinese competitors,but its efforts are focused on developing consume

12、r-oriented products.Meanwhile,the centralized Chinese system concentrates sustained,long-term government support in technology areas that have direct security-related implicationsnamely,artificial intelligence(AI),quantum information science,and semiconductors.The U.S.-China technology rivalry,with

13、its inherent asymmetries,has manifest strategic implications that can ultimately determine the outcome of a potential military confrontation,should one come about.Moreover,as U.S.technology leadership declines,the risks of economic and military challenges will rise.The limited appreciation of the na

14、ture of this rivalry with China was recently underscored by the failure of the U.S.Congress to appropriate the funds previously authorized for the largest part of the CHIPS and Science Act of 2022,while simultaneously cutting the budgets of key federal science Sujai Shivakumar,Charles Wessner,and Th

15、omas Howell|1Investing in Science and Technology|2and technology agencies for fiscal year 2024.This is all the more disappointing,not to say alarming,given that the same week,China announced a 10 percent increase in its already significant levels of public spending on research and development(R&D).1

16、 Foundational Funding for CHIPS and Science on HoldIn a major shift in U.S.policy,in August 2022 Congress passed the CHIPS and Science Act(“CHIPS Act”),which authorized and appropriated nearly$52 billion in federal investments to promote the creation and expansion of semiconductor manufacturing capa

17、city and microelectronics R&D on U.S.soil.The act also authorized tax credits initially valued(pre-passage)by the Congressional Budget Office at$46 billion through 2031 for investments in domestic semiconductor manufacturing facilities.2 Welcoming this legislation,the White House said it“will boost

18、American semiconductor research,development and production,”ensuring U.S.leadership in this foundational technology.3In a concrete manifestation of the program,in March 2024 the Commerce Department announced$8.5 billion in federal grants for U.S.chipmaker Intel Corporation,to be augmented by$11 bill

19、ion in concessional loans to support the companys creation of new chipmaking capacity in the United States.4 That came one month after the administration announced a$1.5 billion grant for foundational chips to GlobalFoundries.5 Since March,the process has accelerated,with awards of$6.4 billion to Sa

20、msung,$6.6 billion to Taiwan Semiconductor Manufacturing Company(TSMC),and$6.14 billion to Micron Technology for advanced DRAM(memory chip)production in the United States.6 These grants have unquestionably contributed to a massive surge in U.S.-based investments in semiconductor production.In additi

21、on to the$39 billion to support chip manufacturing,the CHIPS Act authorized a far larger expenditure of$174 billion for investment in the science,engineering,R&D,education,and workforce development that will underpin future advances in chip design and manufacturing,Sujai Shivakumar,Charles Wessner,a

22、nd Thomas Howell|3Investing in Science and Technology|4with the goal of assuring future U.S.leadership in this critical enabling industry.The principal federal recipients of these funds are to be the National Science Foundation(NSF),the Department of Energy(DOE),the Department of Commerces National

23、Institute of Standards and Technology(NIST),and the Economic Development Administration(EDA).In contrast to the funds allocated to chip manufacturing,however,these funds were authorized but not appropriated by Congress.The FY 2024 congressional appropriation did not deliver on the CHIPS Act authoriz

24、ations for science.7 Under the CHIPS Act,the NSF was to receive$81 billion over five years,doubling its budget by FY 2027,starting with$15.6 billion in FY 2024.Instead,in the FY 2024 budget,the NSF will receive just$9 billion,42 percent of the CHIPS Act target,compounded by an 8 percent cut in its c

25、urrent budget.8 Commenting on these reductions,an NSF spokesperson observed that“it is difficult to place this in the context of the rapid,large-scale science investments by our competitors such as China with the express purpose of outcompeting the United States.”9The FY 2024 budget also features ad

26、ditional funding cuts funding to NIST and the National Aeronautics and Space Administration(NASA).And looking forward,President Joe Bidens proposed budget for FY 2025 calls for programmatic increases for NSF and NIST,but not at the levels envisioned by the CHIPS Act,in a retreat from the goals set o

27、ut in the act.10There is very little in the CHIPS Act benefiting the U.S.semiconductor design industry,which has recently lost major markets in China as a result of tightened U.S.export controls on chip technology to that country.U.S.design firms are not eligible for direct federal funding or invest

28、ment tax credits under the act,yet they are a major source of competitive strength for the United States.Sadly,the failure to follow through on the promises of the CHIPS Act is not new.Much of the America COMPETES Act of 2007,which also authorized funding for the NSF and other federal science agenci

29、es,was never implemented.Amid the current climate of geopolitical competition with China,a similar failure to fund the CHIPS Act provisions would represent a serious miscalculation.11 In the words of Matt Hourihan,a science specialist at the Federation of American Scientists,cuts“to agencies like NS

30、F and NIST are frankly unconscionable in an era when we should be enhancing support for U.S.scientists and engineers.”12Chinas Innovation DriveAt a time when science and innovation underpin both competitiveness and national strength,the comparisons with Chinese efforts are disturbing.During the past

31、 two decades,wavering and erratic U.S.public support for science and technology stand in stark contrast with the massive and sustained Chinese effort to boost its innovation capabilities.In the 2010s,funding for R&D in the United States fell in real terms as federal spending was reduced across most

32、categories.While these cuts satisfied short-term domestic political concerns,losses in R&D funding are not easily made up,and the effects endure.Emerging indicators suggest that China is closing the innovation gap with the United States,a development that should command the attention of U.S.policyma

33、kers and the public.In March 2024,the NSF released a report showing that while the United States still leads the world in R&D spending,with$806 billion in gross expenditures in 2021,China was close behind,at$668 billion.13 As recently as 2009,U.S.R&D outlays were more than double those of China(Figu

34、re 1).The NSF noted that with respect to indicators of global science,technology,and innovation(STI)capabilities,such as science and engineering(S&E)research publications,patents,and knowledge and technology intensive(KTI)industry output,“China has significantly increased its share of global STI cap

35、abilities.”14 China is now the top producer of S&E publications and international patents and has the largest value-added KTI manufacturing output,at$2.4 trillion in 2021,versus the United States$1.4 trillion.15Sujai Shivakumar,Charles Wessner,and Thomas Howell|5Investing in Science and Technology|6

36、The United States has long led the world in doctorate degrees awarded each year in the S&E field(Figure 2).However,in 2020 China,with nearly 43,400 degrees,surpassed the United States,with around 41,700.While Chinas larger population clearly impacts comparisons,China nonetheless far surpasses the Un

37、ited States in first university degreeswhich are essentially equivalent U.S.bachelors degreesin S&E fields,graduating two million in 2020,more than double the 900,000 in the United States.16 In the case of degrees,patents,and publications,qualitative differences may be significant,but the scale of C

38、hinas aggregated indicators are worth noting.The Australian Strategic Policy Institute(ASPI)national security think tank,in a 2023 analysis of research trends in 23 strategic knowledge-intensive sectors related to Australian national defense,found that China led advanced technological research in 80

39、 percent of the sectors.ASPI found that state-led investment allowed China to surpass the United States,Europe,and Japan in areas including hypersonic,sonar,advanced underwater communications,post-quantum cryptography,and underwater drones.17A January 2023 study by the Information Technology and Inn

40、ovation Foundation(ITIF),a U.S.-based think tank,found that“based on key indicators of innovation and advanced-industry performance,China has surpassed the United States in total innovation output.”18 Among the studys key findings were that China is threatening U.S.and allied market share in advance

41、d,high-value-added,and national security-critical industries.China is evolving“from an imitator to an innovator,”it said,and has demonstrated the capacity for world leadership in several advanced technologies,including supercomputers and high-speed rail.Figure 1:Gross Domestic Expenditures on R&D by

42、 Selected Country or Economy,20002021Source:Steven Deitz and Christina Freyman,The State of U.S.Science and Engineering 2024(Alexandria,VA:National Science Foundation,March 13,2024),https:/ncses.nsf.gov/pubs/nsb20243/discovery-u-s-and-global-r-d#global-r-d.?YearBillions of current purchasing power p

43、arity(PPP)dollars?Sujai Shivakumar,Charles Wessner,and Thomas Howell|7A study on Chinese innovation published by Cambridge University Press in 2023 characterized China as an emerging“juggernaut in science,technology and innovation,”citing a number of factors.According to the study,by 2021 China was

44、spending double its 2015 R&D expenditure and 56 times the amount it spent in 1995,the year the government proposed a development strategy of“rejuvenating the nation with science,technology and education”(Figure 3).19Figure 3:China Gross Domestic R&D,19952021Source:Deitz and Freyman,The State of U.S.

45、Science and Engineering 2024.Figure 2:S&E Doctoral Degrees Awarded by Selected Country,20112020Note:Data for Brazil and Japan begins in 2014 due to lack of data for 20112013.Source:Deitz and Freyman,The State of U.S.Science and Engineering 2024.Year?Number of Degrees AwardedYear?Billions of current

46、PPP dollars?Investing in Science and Technology|8The study also found that China has the largest talent pool in the world:in 2020,the number of total undergraduate degrees awarded in China was 7.97 million,with graduate degrees totaling some 662,450 and doctorates 66,175.20A 2022 study of Chinas inn

47、ovation policies published by Oxford University Press observed that“in absolute values,such as R&D expenditure and the number of researchers,patents,and publications,China is now ranked first or second in the world.”The study added,“Examples of its scientific and technological prowess include the de

48、velopment of the worlds fastest supercomputer,Chinas first single-aisle jet aircraft,high speed rail networks,fifth-generation(5G)communications networks,and a demonstrated ability to land a spaceship on Mars,along with a plethora of world-leading innovations in the digital economy.”21As mentioned p

49、reviously,the United States continues to outspend China in gross domestic expenditure on R&D(GERD),although by a narrowing margin.22 The United States also outspends China in GERD as a percentage of GDP,spending 3.5 percent in 2021 compared to Chinas 2.4 percent.23 However,these differences should n

50、ot be grounds for complacency.It is notable that Chinas R&D allocation differs from that of the United States,with a greater proportion of spending focused on applied research and development and more limited efforts on basic research which,through legitimate and illegitimate means,can be acquired f

51、rom U.S.sources(Figure 4).Figure 4:Gross Domestic Expenditure on R&D as a Percentage of GDP,United States and China,201521Source:“Main Science and Technology Indicators,”OECD Data Explorer,accessed May 18,2024,https:/data-viewer.oecd.org?chartId=80feaac0-9eac-4307-a324-921e8e1b9f70.?PercentageYear?S

52、ujai Shivakumar,Charles Wessner,and Thomas Howell|9Importantly,U.S.R&D spending is spread out over a vast array of commercially oriented themes and industries,while Chinese investments are concentrated in several dozen strategically important high-tech sectors.Most of these sectors have defense-rela

53、ted implications and are focused not on the pursuit of breakthrough innovations but on the dominance of those sectors through more efficient manufacturing and commercialization of recent innovations,most commonly drawn from R&D initially conducted outside of China.Investing in Science and Technology

54、|10ChinaAn Unprecedented Degree of Government Engagement While government policy measures have played a key role in the development of high-tech industries in the United States,Europe,and East Asia,“the Chinese case offers a rare and unprecedented opportunity to examine state-led innovation as few o

55、ther countries have intervened so systematically and invasively in their national innovation systems,”the Cambridge University Press study noted.24 In the United States,perennial internecine battles over the federal budget have led to continuing uncertainty over the scale and scope of the government

56、s innovation policies.In contrast,Chinas government has pursued a consistent,long-range technology development effort for nearly two decades,albeit with adaptive adjustments for shocks such as the 2008 financial crisis,the Covid-19 pandemic,and the imposition of stringent technology export controls

57、by the United States and its allies in and after 2022.25The Medium and Long-Term PlanIn June 2006,the Chinese government promulgated its“Medium and Long-Term Plan(MLP)for the Development of Science and Technology(20062020),”which the Office of the U.S.Trade Representative described in 2018 as“the se

58、minal document articulating Chinas long-term technology development strategy.”26 The MLP featured a panoply of government measures to promote the development of“key fields and priority subjects,”including fiscal and tax measures,preferential government procurement,and“absorption”of imported technolo

59、gies.27The MLP introduced the concept of“indigenous innovation,”defined as“enhancing original innovation through co-innovation and re-innovation based on the assimilation of imported Sujai Shivakumar,Charles Wessner,and Thomas Howell|11technologies.”28 The concept of indigenous innovation has been c

60、arried forward in subsequent Chinese industrial developmental measures to the present day.However,indigenous is perhaps a misnomer.The 2018 study by the Office of the U.S.Trade Representative,which looked at Chinas misappropriation of U.S.technology,offered extensive evidence of that assessment.29Si

61、xteen“mega projects”were created in 2006 pursuant to the MLP to“help China master the core technologies of various strategic industries,driving the indigenous innovation effort.”30 According to one source,the government planned to invest$100 billion in these projects between 2006 and 2020.31 The meg

62、aprojects were tasked with the“assimilation and absorption”of technologies imported from outside China.32The MLP is a well-focused,well-funded,long-term effort supported by the Chinese governments 11th,12th,and 13th Five-Year Plans(20062020)for economic development.In addition,between 2006 and 2008,

63、central government agencies published 79 innovation policies designed to implement the MLP,including sector-specific plans for key industries like semiconductors and renewable energy equipment.33 Made in China 2025Reflecting the continuity of these plans,in May 2015 the Chinese government announced

64、its Made in China 2025 strategy,a 10-year,$300 billion plan for promoting manufacturing that“brought together all existing policies across related fields,some of the strategic emerging industries,and targeted priorities in automation,IT,robotics,AI,and much more under one umbrella.”34 The Made in Ch

65、ina 2025 strategy remains“consistent with the goal of indigenous innovation.”35It is also a remarkably ambitious strategy.With a goal of achieving global dominance in key technologies,it sets market share targets for designated industries and seeks to localize supply chains for those industries.Chin

66、a has set a target of being able to provide 70 percent of the key materials and components from domestic sources by 2025.Funding for the strategy is equally ambitious.A prodigious volume of central and regional government funds flowed through many channels to participating firms in the form of equit

67、y investments,loans from government financial institutions,and huge public/private investment funds.Reflecting the governments long-term commitment,China also established R&D centers across the country to develop priority technologies and support their commercialization.In addition,China has launche

68、d new large-scale“mega”or“high end”thematic R&D projectsdescribed as“large scale infrastructures and expensive funding initiatives in strategic industries and frontier technologies”continuing a policy tool introduced under the 2006 MLP.36China has also set targets for achieving“green”and“smart”manuf

69、acturing in the key sectors,incorporating digital technologies in the effort,with the government designating“pilot demonstration projects”across the country to facilitate dissemination of newly developed technologies.37 These indigenous investments are complemented by government-supported Investing

70、in Science and Technology|12investment funds that acquired foreign firms possessing technologies deemed to be supportive of Chinas development effort.38Significant Economic ImpactChinas actions have proven effective and have even generated notable successes.As Professor Shirley Ze Yu,a political eco

71、nomist at Harvards Kennedy School,observed in March 2024,“Made in China 2025 is an exceptionally successful industrial strategy.”39 She went on to note,“In six years,Chinas smartphone manufacturing surpassed 50 percent of the global market share.In eight years,Chinas solar,wind and lithium battery p

72、roduction all rose to global dominance.”Although the Made in China 2025 strategy was initially“grossly underestimated,”it is now“considered in the West,especially in the United States,as a master plan for China to secure dominance in global technology,connected with the expansion of its global influ

73、ence using the Belt and Road Initiative.”40 Chinas Innovation Vulnerabilities Despite this progress,the widespread view that Chinas bid for global technological leadership is relentless and unstoppable has its share of skeptics,and in fact the recent record of innovation successes masks systemic wea

74、knesses.Reliance on Foreign ResearchChinas total R&D spending,based on 2019 figures,allocates only around 6 percent of total outlays to basic research and 11 percent to applied research,compared with 16.6 percent and 19.2 percent,respectively,for the United States(Figure 5).41The remainder is alloca

75、ted to“experimental development”that is,according to the NSFs definition,“drawing on knowledge gained from research and practical experience and producing additional knowledge,which is directed to producing new products or processes or to improving existing products or processes.”42 Underfunding of

76、basic and applied R&D presumes the continued ability to absorb foreign technology and manufacture products based on it.Chinas R&D overspending on development at the expense of basic and applied research“may jeopardize the long-term prospect of the countrys scientific,economic,and social development,

77、”scholars have found.43 To date,the indigenous innovation approach,drawing upon the fruits of foreign research,may have enabled China to escape the consequences of its underdeveloped basic and applied research efforts.As the Mercator Institute for China Studies(MERICS),a European think tank speciali

78、zing in China,Sujai Shivakumar,Charles Wessner,and Thomas Howell|13Investing in Science and Technology|14observed in March 2024,“Most of the technology successes China can point to have some degree of foreign inspiration.Digital giants in search,e-commerce,ride hailing and social networking started

79、by translating U.S.models to Chinese contexts.”MERICS went on to point out,“In hardware sectors like solar panels,batteries,electric vehicles,smart phones,and commercial drones,Chinese overseas returnees and local entrepreneurs gained global market share by building on ideas and components pioneered

80、 elsewhere.”44But as recent events have underscored,Chinas degree of access to foreign technology,especially at the cutting edge,will not necessarily continue.The Biden administration is reportedly considering blacklisting Chinese semiconductor firms linked to Huawei Technologies and imposing sancti

81、ons on Chinese memory chipmaker ChangXin Memory Technologies.45In particular,“access to core components and technology is a prerequisite for Chinas advancement in emerging industries,”MERICS scholars wrote in 2019.“Chinese tech firms have already gotten into serious trouble when cut off from access

82、to chips or other high-tech components from abroad,as U.S.measures towards companies like ZTE and Huawei have proved.”46 The recent imposition of more stringent export controls on semiconductors,quantum computing,and AI technology by the United States and its allies has underscored this vulnerabilit

83、y.47Encumbrances of Government InvolvementWhile the Chinese governments deep involvement in innovation is often cited as a source of strength,it is also problematic.The 2023 ITIF study,which warns of Chinas growing prowess in this regard,acknowledges that“state involvement in the Chinese economy wil

84、l almost certainly hinder Figure 5:R&D Expenditure by Type,United States and China,2019 Source:Deitz and Freyman,The State of U.S.Science and Engineering 2024.?Sujai Shivakumar,Charles Wessner,and Thomas Howell|15productivity growth.”48 But it is important to keep in mind that China is not seeking t

85、o maximize efficiency;rather,it strives to dominate strategic sectors with national security implications,and it is willing to spend heavily to do so.Still,Chinese scientists sometimes complain that as they seek funding,they are“encumbered by arduous red tape,”while their peers are“becoming obsessed

86、 with recognition,”undermining the nations drive for innovation and technological self-sufficiency.49For example,in August 2023,Chinas Ministry of Industry and Information Technology decreed that all mobile app providers must submit their business details to the government or face punishment,a move

87、that Chinese software developers said will“stifle local innovation and hinder access to advances created overseas.”50Limited Freedom to Think and AssociateWhile China is graduating more students in S&E fields,it remains uncertain whether sheer numbers will be sufficient to move China ahead in innova

88、tion.One recent analysis observed that while innovation has been elevated to a very high status in China,and on the surface Chinese researchers are encouraged to think outside the box,equally important are the other ingredients of a true innovation culture,namely,autonomy,free access to the flow of

89、information and especially dissent,both scientific and political,which at present are not adequately applauded or tolerated.51Growing Friction with Trading PartnersHuang Yiping,dean of Peking Universitys National School of Development,warned recently that Chinas massive investments in high-tech manu

90、facturing sectors could lead to overcapacity and friction with Chinas trading partners,noting that the United States and Europe were moving to decouple their supply chains from China and invest in increased domestic production.52“If it really turns into a relatively common wave of trade protectionis

91、m against Chinese products,it may actually be detrimental to our next stage of development,especially in innovation,”he said.Yet while it is true that Chinas innovation system has weaknesses and vulnerabilities,China can point to spectacular achievements during the past decade in numerous technology

92、-intensive fields.In virtually every case,China got its foothold through acquisition and adaptation of foundational foreign technology.But it has gone on to develop and improve manufacturing capability,frequently surpassing its foreign counterparts in quality and efficiency and eventually achieving

93、a dominant global market position.As a 2023 study pointed out,“While the development of novel products and processes is obviously an important aspect of innovation,effective commercialization is at least as important.”53 And successful commercialization is essential for the revenue to fund the R&D t

94、o drive the next wave of innovation.Investing in Science and Technology|16A Growing Challenge in Strategic SectorsIn 2023,CSIS published a major study of the new controls imposed by the United States and its allies on technology exports to China,whose coauthors included William A.Reinsch,formerly in

95、 charge of U.S.export controls at the Department of Commerce.Although the studys focus was on export controls,it concluded by stating that“the important question is not how to hold China back through controls,as the U.S.capability for doing that is limited,but rather how to stay ahead.A strategy for

96、 that lies in the various U.S.policy initiatives enacted in the past two years,most notably the CHIPS Act,but that alone will be insufficient to achieve long-term U.S.strategic objectives.”54At present,the policies adopted amid much fanfare to address this existential competition are effectively sta

97、lled.The“science”portion of the CHIPS Actthe principal longer-term scientific promotion measure of the current administrationremains unfunded,a circumstance that may well continue for the foreseeable future.Congress,instead of dramatically expanding funding for federal science agencies,as in the Spu

98、tnik era,is reducing it.This is not an abstract problem.A survey of three critical cross-cutting foundational technologies that will enable many strategic technology sectors essential for U.S.national defense capabilitiesAI,quantum technology,and semiconductorsindicates that while the United States

99、may still lead in all three,China is rapidly closing the technology gap.Sujai Shivakumar,Charles Wessner,and Thomas Howell|17Artificial IntelligenceAI is the development of computer systems to perform tasks and exercise cognitive functions that usually require human intelligence,such as decisionmaki

100、ng,pattern recognition,problem solving,“learning”from available data,and translation of languages.It is rapidly being deployed across a broad range of human endeavors,transforming economies and societies.55 A high-stakes AI race,reminiscent of the U.S.-Soviet race to the moon in the 1960s,is emergin

101、g between the United States and China.Unlike the race to the moon,however,the race for AI has no short-term finish line.On the contrary,it involves competition across national innovation ecosystems including universities,small and large companies,and government funding and policy support.China recog

102、nizes this is a long-term contest and is taking a long-term view,with investments commensurate with the stakes.For example,in 2017 Chinas State Council released its New Generation Artificial Intelligence Plan,which set 2030 as a target date by which China will achieve global leadership in AI,turn AI

103、 into a$150 billion domestic industry,and be the world leader in developing ethical norms and standards for AI.56WHAT ARE THE STAKES IN THE AI RACE?Policy experts increasingly recognize the importance of AI in the context of national defense.57 AI can make multiple decisions and enable actions with

104、a speed and performance level that,in the future,is expected to exceed the capabilities of human operators.“As AI does not get fatigued,does not forget,and has no emotional fluctuation,AI is expected to be able to help commanders make decisions by processing large quantities of data quickly and accu

105、rately,”the Japanese National Institute of Defense Studies said in 2021.58The U.S.National Security Commission for Artificial Intelligence(NSCAI)was formed in 2018 to assess AI,machine learning(ML),and related technologies as they may affect U.S.national security and defense,and to make recommendati

106、ons to the president and Congress.The commission released its final report in March 2021,which concluded that the United States“is not prepared to defend or compete in the AI era.This is the tough reality that we must face,”in the words of Chair Eric Schmidt,former chief executive of Google,and Vice

107、 Chair Bob Work,a former deputy secretary of defense.59The NCSAI warned that“for the first time since World War II,Americas technological predominancethe backbone of its economic and military poweris under threat.China possesses the might,talent,and ambition to surpass the United States as the world

108、s leader in AI in the next decade if current trends do not change.”60 The commission said that“our armed forces competitive military-technical advantage could be lost within the next decade if they do not accelerate the adoption of AI across their missions.”61 It also emphasized the potential conseq

109、uences,asserting that“defending against AI-capable adversaries operating at machine speeds without employing AI is an invitation to disaster.”62The NCSAI noted that while the U.S.private sector was making dramatic strides in AI,“commercial agendas are dictating the future of AI,and concentrating hea

110、vily in one discipline:machine learning(ML).”It added,“Despite promising moves,government funding has lagged behind the Investing in Science and Technology|18performative potential of the field,limiting its ability to shape research toward the public good and support progress across a range of AI di

111、sciplines.As a result,the U.S.AI innovation environment rests on a narrowing foundation.”63Although the NSCAIs report was released three years ago,recent comments by industry and government experts indicate that the commissions basic findings with respect to the national security dimensions of AI re

112、main sound.This is reflected in both the scale of Chinese investments and their focus,which prioritize AI-related research in defense applications instead of consumer services such as the ChatGPT chatbot:Alexandr Wang,the founder of Scale AI,said in 2023 that while Chinas Peoples Liberation Army is

113、spending between 1 and 2 percent of its annual budget on AI,the Pentagon is spending between 0.1 and 0.2 percent.64In mid-2023,Work,the former deputy defense secretary,commented that in“marginal terms,were flat and the Chinese are outspending us.This is why China is so different.In the past weve alw

114、ays been able to outspend our competitors.”65Deputy Assistant Secretary of Defense Michael Horowitz said in a January 2024 interview that“the AI adoption capacity of the Department is improving.but we have more work to do,frankly,as weve been very public in stating.”66PAYOFFS FOR CHINAChina is makin

115、g great strides in developing defense-related applications of AI.The 2023 ASPI assessment of research trends in 23 critical technology areas concluded that in six key thematic areas relevant to AI and autonomy,China already leads in three(Table 1).67Table 1:Research Leaders in Defense-Related AI App

116、licationsAI ThemeLeading CountryTop Research OrganizationDrone swarming and collaborative robotsChinaBeihang UniversityAI algorithms and hardwareChinaTsinghua UniversityAdvanced data analyticsChinaChinese Academy of SciencesMachine learning systemsUnited StatesUniversity of CaliforniaAdvanced integr

117、ated circuit design/fab systemsUnited StatesUniversity of CaliforniaNatural language processingUnited StatesGoogle(U.S.Division)Source:“AUKUS Relevant Technologies:Top 10 Country Snapshot,”Australian Strategic Policy Institute,Critical Technology Tracker,June 2023,https:/www.aspi.org.au/report/criti

118、cal-technology-tracker.The Department of Defense(DOD)is beginning to respond to the AI challenge.In 2022,Brookings released a study of all federal AI-related contracts in the preceding five years,and the next year it released a follow-up study covering August 2022 to August 2023.Sujai Shivakumar,Cha

119、rles Wessner,and Thomas Howell|19Over a five-year period from 2017 to 2022,it found a total of 472 AI-related federal contracts.In just the one-year span from 2022 to 2023,there were 489.The potential value of federal awards for AI research grew 1,200 percent in the 202223 period,to$4.6 billion,from

120、$355 million over the preceding five-year period,primarily driven by the DOD(Figure 6).68 Figure 6:Comparing Potential Value and Contract Counts,Past vs.New ContractsSource:Jacob Larson et al.,The Evolution of Artificial Intelligence(AI)Spending by the U.S.Government(Washington,DC:Brookings,March 26

121、,2024),https:/www.brookings.edu/articles/the-evolution-of-artificial-intelligence-ai-spending-by-the-u-s-government/.However,as reported in Time,the Pentagon questioned the Brookings analysis,stating that DOD requested$874 million for AI research,development,testing,and evaluation(RDT&E)in FY 2022 a

122、nd$1.8 billion in FY 2024.69In either case,the U.S.defense establishment is clearly increasing its commitment to AI,although whether this will match Chinas effort is unclear.In its November 2023 strategy to promote the adoption of AI by the armed forces,the Pentagons stated goal was to“help accelera

123、te the speed of commanders decisions and improve the quality and accuracy of those decisions,which can be decisive in deterring a fight and in winning a fight.”70Deputy Secretary of Defense Horowitz disclosed in his January 2024 interview that with a program dubbed the Replicator Initiative,the Pent

124、agon expects to be able to“field in the multiple thousands attritable autonomous systems in the next 18 to 24 months.Were on track to achieve that goal.”71 This could mean the deployment of thousands or tens of thousands of low-cost autonomous units for use in swarms which,from a cost standpoint,the

125、 United States could“afford to lose.”Matt Turek,deputy director of the Information Innovation Directorate at the DODs Defense Advanced Research Projects Agency(DARPA),said at a March 2024 CSIS event that about 70 percent of all DARPA initiatives now have some form of AI,machine learning,and autonomy

126、 associated with them,with the broad goal of“preventing or creating strategic surprise.”72 He noted that technology?Potential Value of Award($M)?Number of Contracts?Investing in Science and Technology|20firms like Microsoft,OpenAI,Anthropic,and Google were all participating in a DARPA program and we

127、re providing access to state-of-the-art models.Despite such developments,as former deputy secretary of defense Work said in mid-2023,while the Pentagon is increasing its R&D spending on AI,it is not doing so at a pace sufficient to close the gap with China.73CREATING AN INSTITUTIONAL ARCHITECTUREThe

128、 Biden administration is creating an institutional architecture for the application of AI throughout the federal system.In October 2023,the administration released an executive order on AI that emphasizes safety,governance,and the establishment of standards and consumer protections;sets up task forc

129、es and advisory committees;and requires specific actions by big tech companies and federal agencies,including the promulgation of guidelines.74 The administration is requesting$3 billion for federal agencies use of AI in its FY 2025 budget and$300 million to increase agency funds for AI to address r

130、isks and advance AIs use for the public good.75The budget allocates$32 million to a National AI Research Resource(NAIRR)pilot,which will provide AI researchers with the computational tools they need to conduct AI research.76 Federal agencies would get$70 million to establish chief AI officers(CAIO)t

131、o promote the use of AI and manage its risks.Meanwhile,an“AI talent surge,”aimed at boosting the federal talent pool with AI expertise,is allocated$32 million.77While these measures will undoubtedly facilitate the application of AI in the federal agencies,they appear to be primarily focused on safet

132、y measures,consumer protection,and safeguards against abuses of AI.They are not focused on the strategic AI competition with China.AI CHALLENGES FOR CHINADespite its gains in AI,China faces obstacles in its effort to capture world leadership in the field by 2030.While the government has been a criti

133、cal actor in promoting the development of AI,its authoritarian character is,at times,counterproductive.In the summer of 2023,Chinese authorities proposed regulations for generative AI,requiring that all images and text must align with the“core values of socialism”and must not undermine state authori

134、ty or national unity.78 At that time several Chinese companies had already launched chatbots but found it impossible to compete with U.S.-based OpenAIs ChatGPT in part because of the many restrictions imposed by the state.A major U.S.advantage is that the private sector is investing heavily.Accordin

135、g to the Stanford University Institute for Human-Centered AIs 2024 annual report,the United States leads China in private sector investment in AI by an enormous margin,with$67.2 billion invested in 2023 compared with$7.8 billion by China.79 U.S.-based“big data”companies like Meta,Google,and Microsof

136、t are pouring large sums of money into AI research.The United States is also spawning AI start-ups at over three times the rate of China.OpenAI,a U.S.nonprofit AI research organization,launched ChatGPT in 2022 powered by a large language model,and it became the fastest-growing consumer software appl

137、ication in history.80Sujai Shivakumar,Charles Wessner,and Thomas Howell|21Recently imposed Western export controls are limiting Chinas access to the leading-edge chips that are essential to drive advanced AI systems.China is unlikely to be able to produce such chips in volume by itself for a number

138、of years,although Huaweis recent announcement of seven-nanometer technology in its latest smartphone is a troubling sign for U.S.policymakers.81 Still,Paul Scharre,director of studies at the Center for a New American Security(CNAS),noted that if the Western controls work as intended,“Chinese AI deve

139、lopers will remain boxed out of that supply chain,working with less powerful chips,and thus a year or two behind the cutting edge as AI continues its rapid advance.”82These controls can be effective in delaying Chinas progress in AI.According to numerous industry experts,“Even as the country China r

140、aces to build generative A.I.,Chinese companies are relying almost entirely on underlying systems from the United States,”and China lags behind the United States by a year and may be falling further behind in generative AI.83China faces obstacles in developing large language models,such as the relat

141、ively lower quality of data from Mandarin-language internet sources versus English and strong competition from Googles Gemini and ChatGPT,but is apparently finding workarounds.84 In March 2024,the Department of Justice indicted a Chinese national and former Google AI software developer for allegedly

142、 stealing 500 files of confidential code that the company uses for its supercomputing data centers to train large language models.85 The indictment alleged that the researcher concurrently went to work for Google rivals in China.Indeed,a hidden Chinese competitive advantage in AI and other high-tech

143、 sectors is its large-scale state-supported theft of Western intellectual property.Quantum Information ScienceQuantum information science(QIS)employs principles derived from quantum science to achieve new and potentially revolutionary capabilities in communications,computing,sensing,and encryption/d

144、ecryption.Quantum information technology has rapidly moved from pioneering theoretical work by U.S.scientists to the emergence and pursuit of practical applications in the United States,China,and Europe.Many of these applications will have major impacts on national security.For instance,quantum comp

145、uters may soon be able to decrypt information stored on encrypted systems,which,according to a 2022 Biden administration National Security Memorandum,could“jeopardize civilian and military communications systems,undermine supervisory and control systems for critical infrastructure,and defeat securit

146、y protocols for most Internet-based financial transactions.”86Among other uses,application of quantum concepts to sensors could enable the detection of concealed underground structures,submarines,and nuclear weapons.Quantum-based communications systems could ensure secure communications that could n

147、ot be breached by adversaries.And quantum accelerometers could be used for navigation when GPS is not available,including underwater and underground situations and scenarios in which GPS has been knocked out by adversaries.Investing in Science and Technology|22THE U.S.NATIONAL QUANTUM INITIATIVE ACT

148、In a major positive step to address this challenge,the National Quantum Initiative Act(NQIA)of 2018 established a coordinated federal program to promote quantum R&D to ensure U.S.economic and national security.87 The act authorized federal agencies to establish consortia and research centers to enab

149、le QIS R&D and required the coordination of QIS programs across the federal government and in conjunction with academia and industry.88 The NQIA was authorized for five years and is up for reauthorization in 2024.Reauthorization of the act is crucial.As a principal analyst at UK-based data analytics

150、 firm GlobalData observed,“If reauthorization fails,it will damage the U.S.s position in the global quantum race.”89Significant QIS developmental efforts are ongoing at over a dozen federal agencies including NIST,DOD,DOE,NASA,and within the intelligence community.90 DODs QIS developmental efforts h

151、ave been under way for years and are implemented pursuant to the National Defense Authorization Act.Since 2023,DARPA has been pursuing Underexplored Systems for Utility-Scale Quantum Computing(US2QC)to determine whether revolutionary approaches to QIS can reach utility scale more rapidly than conven

152、tional wisdom predicts.There are multiple paths to pursue.These opportunities were recognized in the increased spending authorized in the science portion of the CHIPS Act for quantum research at NSF,NIST,and DOE,but as noted above,the necessary funds have not been appropriated.A GROWING COMPETITIVE

153、THREATWhere the United States and China stand in comparative terms in QIS is subjective and difficult to assess,particularly given that the research efforts that are under way are frequently not transparent.A 2022 RAND Corporation study concluded that the United States led the world in most,but not

154、all,quantum technologies.91 In 2022,GlobalData concluded that the United States led China in quantum technology by about five years,but two years later,in 2024,the same firm concluded that the two countries were“nearly equal.”92 Underscoring this assessment,in May 2024,research teams in China,the Un

155、ited States,and the Netherlands independently reported simultaneous breakthroughs that could eventually enable the creation of“nearly unhackable”quantum-based internet services.93 The 2023 Australian ASPI survey of critical technologies found that of four quantum-related research domains,China led i

156、n three:quantum sensors,quantum communications,and post-quantum technologies.94 The United States leads in one defense-related field,quantum computing.In the three fields led by China,that country is producing more S&E papers and has the foremost research organizations in the world,the Chinese Acade

157、my of Sciences and the University of Science and Technology of China.According to a 2023 study by the Wilson Center,“opacity reigns in Chinas public and private financing for quantum technologies.”95 The same can be said,to a degree,about U.S.outlays.The Chinese government has committed to spend$15

158、billion in developing QIS between 2024 and 2028,but the extent to which it will actually do so has been questioned.96 In the United States,the Sujai Shivakumar,Charles Wessner,and Thomas Howell|23government has reportedly committed$3 billion to various quantum projects,another$1.2 billion to the Nat

159、ional Quantum Initiative,and possibly additional outlays in the DODs mostly classified“black budget.”97 Although U.S.public outlays are smaller than Chinas,as a recent CSIS study observes,“The United States has begun to mitigate its investment gap with China by teaming up with key allies leading glo

160、bal QIS innovation on research and development efforts.”98MAJOR ACHIEVEMENTS,YET VULNERABILITIES REMAINRecent anecdotal reports out of China underscore both its achievements in quantum technology and some of its vulnerabilities.In October 2023,Chinese scientists announced that the countrys latest qu

161、antum computer,the JiuZhang 3,had solved a highly complex mathematical problem in a millionth of a second,more than 20 billion years faster than the worlds fastest supercomputer could solve the same problem.99 In January 2024,a Chinese quantum computer company,Origin Quantumfounded by scientists fro

162、m the University of Science and Technology of Chinaunveiled a“China independent-developed state-of-the-art quantum computer”dubbed Origin Wukong(Monkey King)which was open for access by users around the world.100 Within 10 days,the computer had performed 33,871 quantum computing tasks for global use

163、rs.“No other nation funds more R&D for quantum communications than China,”the Wilson Center study noted.101Chinese research institutes are reportedly creating a quantum communications network using satellites in low and medium-to-high Earth orbits.102 The network would utilize quantum technology for

164、 encryption and secure transmission of data and communications.In March 2024,Guo Guopinga quantum physicist,cofounder of Origin Quantum,and leading figure in Chinas quantum promotional effortwarned that China was dependent on Western countries,mainly the United States,the Netherlands,and Finland,for

165、 dilution refrigerators,which are used to create the ultra-low temperatures required by quantum computing.103 Guo also noted that China lagged behind the West in industrial applications of quantum computing,citing high costs and inadequate market demand.SemiconductorsAll major U.S.defense platforms,

166、domestic infrastructures,and technology-intensive products and industries are based on semiconductor chips,the basic building blocks of digital technology.104 AI systems,for example,“operate on a foundation of interconnected computer hardware driven by cutting-edge semiconductor devices.”The U.S.sem

167、iconductor design industry leads the world,representing a crucial U.S.asset in the strategic competition with China.The CHIPS Act of 2022 was intended to address twin U.S.vulnerabilities in the chip manufacturing sector that were revealed by the Covid-19 pandemicmost notably the shortfall of U.S.pro

168、duction capacity needed to supply the needs of domestic industry and the U.S.military,and the fact that U.S.chipmakers trail Taiwan and South Korea in their ability to make chips at the most advanced nodes.At present,the United States is dependent upon chipmaking facilities in Taiwan,which makes 90

169、percent of the most advanced chips,and South Korea for these devices.Taiwan,of Investing in Science and Technology|24course,faces significant levels of geopolitical risk but also seismological ones:the island suffered several earthquakes in April 2024 alone.105After a necessary ramp up,CHIPS Act fun

170、ds are now being awarded to firms to expand both leading-edge and foundational semiconductor manufacturing capacity in the United States.Moreover,the U.S.government,in conjunction with key allies,is enforcing new and more stringent controls on exports of chips and chip manufacturing technology to Ch

171、ina,especially on tools and devices necessary to support advances in AI.106China has responded by redoubling its commitment to developing its own semiconductor technology through domestic innovation.At the end of 2022,the Chinese government was reportedly planning to spend 1 trillion yuan($143 billi

172、on)over the next five years to support its semiconductor industry,more than the United States and the European Union combined.107 In 2014,China established the China Integrated Circuit Industry Investment Fund(the“Big Fund”)to support investments in the domestic semiconductor industry,comprised of g

173、overnment,quasi-public,and private funds.By 2019,the Big Fund had raised 204 billion yuan(28 billion USD).In May 2024,China launched a new phase of this effort with a registered capital of$47.5 billion to support investments in Chinas semiconductor value chain,including production capacity,equipment

174、,materials,and advanced packaging.108China is rapidly expanding its production capacity for higher node chips,sometimes called“foundational”semiconductors.109 These chips account for most current applications worldwideand Chinese firms may come to dominate that market segment to the detriment of U.S

175、.-based chipmakers,including those currently investing in new facilities with support from the CHIPS Act.For the moment,the U.S.-based semiconductor design industry leads all other countries,including China,by virtually any measure of international competitiveness.Advanced artificial intelligence ch

176、ips designed by the U.S.fabless firm Nvidia account for over 80 percent of the market and“underpin all of the most advanced AI systems.”110 Nvidia reportedly holds a 92 percent global market share in data center graphics processing units(GPUs).111 But in June 2024,a Huawei executive stated that the

177、companys Ascend 910B AI chip can deliver 80 percent of the efficiency of an Nvidia A100 when training large language models,and,“in some other tests,the Ascend can beat the A100 by 20 percent.”112 The United States has a number of world-leading integrated device makers(IDMs)that design and manufactu

178、re their own chips,such as Intel Corporation and Texas Instruments.Intel is reportedly pursuing the astonishing goal of incorporating 1 trillion transistors on a single processor package by 2030,about 10 times the current number.113In addition,U.S.-based firms dominate crucial upstream chip design s

179、ectors such as electronic design automation(EDA)tools and IP blocks,which enable faster and less expensive chip designs.114 Loss of access to these enabling technologies as a result of Western export controls is proving disruptive to Chinas AI sector.Some experts regard Chinas prospects for achievin

180、g technological leadership in semiconductors through its own efforts as impossible,while others see it as inevitable.If a loss of leadership in Sujai Shivakumar,Charles Wessner,and Thomas Howell|25semiconductor design did occur,it would be a strategic calamity of monumental proportions for the Unite

181、d States,with a more far-reaching impact than the offshore movement of chipmaking that has been unfolding since the 1990s.Once lost,such leadership would be difficult to recapture.And as the 2021 NSCAI report warned,“If a potential adversary bests the United States in semiconductors over the long te

182、rm or suddenly cuts off U.S.access to cutting-edge chips entirely,it could gain the upper hand in every domain of warfare.”115For that reason,in addition to building out domestic chipmaking capacity,U.S.policymakers should be sensitive to the health and competitive standing relative to China of the

183、domestic chip design industry,with an eye to preserving and even increasing U.S.leadership.The United States cannot be complacent about its current leadership.In that regard,in 2022 the Semiconductor Industry Association and the Boston Consulting Group warned that the U.S.chip design industrys globa

184、l market share has been eroding as design firms face challenges such as rising costs,labor shortages,and exclusion from important foreign markets.116Investing in Science and Technology|26ConclusionIt is crucially important to understand that AI,QIS,and semiconductors are increasingly interrelated an

185、d mutually supporting fields.Over time,the advances in these domains may transform both national economic capabilities and the strategic balance.The interdependencies are powerful.AI systems run on advanced chips,and AI software is increasingly being deployed to design those chips.Researchers are id

186、entifying composite materials that could integrate quantum devices into semiconductor technology,making chips“significantly more powerful.”117 Semiconductor technology is in turn being used to fabricate qubits,the basic building blocks of quantum computers.118 AI systems based on quantum processing

187、could“be millions of times faster than the fastest microchip computers today,”experts say.119Chips,AI,and QIS will therefore not only advance all twenty-first-century technology-intensive industries but also drive,enhance,and possibly disrupt each other.Chinese authorities understand this competitio

188、n and are dedicating massive amounts of funding toward capturing the benefits of these transformative technologies.Given the stakes of this competition,it is jarring that in the space of just a few days in March 2024,the United States both failed to fund the science portion of the CHIPS Act and impl

189、emented budget cuts for key federal science agencies.120 Meanwhile,the Chinese government increased planned R&D spending by 10 percent.China has pledged to“harness the entire nations resources to speed homegrown breakthroughs,reaffirming what it sees as a central priority to become self-reliant Suja

190、i Shivakumar,Charles Wessner,and Thomas Howell|27in spheres from AI to chipmaking and ultimately wrest technological supremacy from the West,”experts say.121Sudip Parikh,chief executive of the nonprofit American Association for the Advancement of Science,warned that the race for leadership in key te

191、chnologies like AI,quantum,and fusion would have long-term strategic implications:“Once you lose the lead in that kind of a race,the benefits accrue to whoevers in the lead,and theyve been accruing to us for the last 75 years.They will begin to accrue somewhere else.”122 U.S.policymakers need to rec

192、ognize that danger and make the investments needed to secure the nations future.Investing in Science and Technology|28About the AuthorsSujai Shivakumar directs the Renewing American Innovation(RAI)Project at the Center for Strategic and International Studies(CSIS),where he also serves as a senior fe

193、llow.Dr.Shivakumar brings over two decades of experience in policy studies related to U.S.competitiveness and innovation.Previously,he directed the Innovation Policy Forum at the National Academies of Sciences,Engineering,and Medicine and led major studies of U.S.policies supporting advanced manufac

194、turing,small business growth,workforce development,and entrepreneurship.He was also a lead contributor to a seminal National Academies study of strategies adopted by U.S.states and regions to foster entrepreneurship,drive technology transfer,and encourage regional high-tech ecosystems.He also helped

195、 prepare National Academy of Public Administration studies on laboratory technology transfer and the management of space situational awareness.Reflecting his expertise in innovation policy,Dr.Shivakumar has testified before the Senate Committee on Commerce,Science,and Transportation and has been quo

196、ted in leading publications such as theFinancial Timesand theWall Street Journal.His academic background includes a doctorate in economics from George Mason University and service as an Earhart Foundation scholar at the Ostrom Workshop at Indiana University Bloomington,where he authoredThe Constitut

197、ion of Development(Palgrave Macmillan,2005)and coauthored with Nobel Laureate Elinor OstromThe Samaritans Dilemma:The Political Economy of Development Aid(Oxford University Press,2005).During his tenure at the National Academies,he contributed to over 50 assessments of U.S.and foreign innovation pro

198、grams.Charles Wessner is currently a research professor at Georgetown University,where he teaches global innovation policy.He is active as a speaker,researcher,and writer with a global lens on Sujai Shivakumar,Charles Wessner,and Thomas Howell|29innovation policy and frequently advises technology ag

199、encies,universities,and governments on effective innovation policies.He served for two decades in the National Academy of Sciences,where he achieved the distinguished position of a National Academies scholar.He founded and directed the National Academies Technology,Innovation,and Entrepreneurship Pr

200、ogram and its Innovation Forum and directed research addressing the importance of semiconductor research and production to innovation and national security.In collaboration with Gordon Moore of Intel and Sematech CEO William Spencer,he produced a series of influential reports includingSecuring the F

201、uture:Regional and National Programs to Support the Semiconductor IndustryandInnovative Flanders:Innovation Policies for the 21st Century,which reviewed the role of IMEC.His most recent publication,Regional Renaissance:How New Yorks Capital Region Became a Nanotechnology Powerhouse(Springer,2020)doc

202、uments how state and private sector investments in universities,institutions,and infrastructure created a vibrant semiconductor cluster that drove regional growth.He is also a leading U.S.expert on Sematech,the U.S.semiconductor consortium;the Manufacturing Extension Partnership;and the Small Busine

203、ss Innovation Research(SBIR)program,which provides awards to promising small businesses and start-ups.Reflecting his commitment to transatlantic cooperation,he was awarded the Order of Merit by the president of France.Reflecting his expertise in global innovation policy,he closely cooperates with th

204、e director of the CSIS Renewing American Innovation Project.Thomas Howell is an international trade attorney(currently in solo practice)serving as a consultant to the CSIS Renewing American Innovation project.During the course of his 40-plus-year legal career,he has represented U.S.-based semiconduc

205、tor companies and organizations in matters such as the U.S.-Japan trade disputes and litigation of the 1980s;the formation of Sematech in 198687;trade disputes with China(including the first WTO dispute settlement challenge to that country in 2003);and numerous other public policy initiatives.He ser

206、ved as a member of the Defense Science Board on Secure Microchip Supply in 2004.He has also represented U.S.-based industries in trade disputes and litigation in telecommunications equipment,soda ash,photographic film and paper,flat-rolled steel,and renewable energy equipment.In conjunction with his

207、 legal work,he developed a specialization in field research in Asia and Europe to produce analytic studies for clients.His subjects include industrial,research,science,and innovation policies outside the United States and foreign market access barriers to U.S.exports and investment.The National Acad

208、emy of Sciences has commissioned and published a number of his works,and he has contributed to the academy as a contract writer and researcher producing numerous peer-reviewed chapters and book-length studies.He has published many articles and books,the most recent of which was coauthored with Charl

209、es Wessner,Regional Renaissance:How New Yorks Capital Region Became a Nanotechnology Powerhouse(Springer Nature,2020).He is a graduate of Harvard College(1971)and Boston University School of Law(1977).Investing in Science and Technology|301 Dannie Peng,“China Makes Science and Tech a Budget Priority

210、 with 10%Jump in Spending during Two Sessions,”South China Morning Post,March 6,2024,https:/ Budgetary Effects of H.R.4346,”Congressional Budget Office,July 20,2022,https:/www.cbo.gov/publication/58319.3“FACT SHEET:CHIPS and Science Act Will Lower Costs,Create Jobs,Strengthen Supply Chains,and Count

211、er China,”White House,August 9,2022,https:/www.whitehouse.gov/briefing-room/statements-releases/2022/08/09/fact-sheet-chips-and-science-act-will-lower-costs-create-jobs-strength-en-supply-chains-and-counter-china/.4 U.S.Department of Commerce,“Biden-Harris Administration Announces Preliminary Terms

212、with Intel to Support Investment in U.S.Semiconductor Technology Leadership and Create Tens of Thousands of Jobs,”press release,March 20,2024,https:/merce.gov/news/press-releases/2024/03/biden-harris-administration-announces-preliminary-terms-intel-support.5 U.S.Department of Commerce,“Biden-Harris

213、Administration Announces Preliminary Terms with GlobalFoundries to Strengthen Domestic Legacy Chip Supply for U.S.Auto and Defense Industries,”press release,February 19,2024,https:/merce.gov/news/press-releases/2024/02/biden-harris-administration-announces-preliminary-terms-globalfoundries.6 U.S.Dep

214、artment of Commerce,“Biden-Harris Administration Announces Preliminary Memorandum of Terms with Samsung Electronics to Establish Leading-Edge Semiconductor Ecosystem in Central Texas,”press release,April 15,2024,https:/merce.gov/news/press-releases/2024/04/biden-harris-administration-announces-preli

215、minary-terms-samsung;U.S.Department of Commerce,“Biden Harris Administration Announces Preliminary Terms with TSMC,Expanded Investment from Company to Bring Worlds Most Advanced Leading-Edge Technology to the United States,”press release,April 8,EndnotesSujai Shivakumar,Charles Wessner,and Thomas Ho

216、well|312024,https:/merce.gov/news/press-releases/2024/04/biden-harris-administration-announces-preliminary-terms-tsmc-expanded;and U.S.Department of Commerce,“Biden Harris Administration Announces Preliminary Memorandum of Terms with Micron to Onshore Leading-Edge Memory Chip Production in U.S.for F

217、irst Time in Decades,”press release,April 25,2024,https:/merce.gov/news/press-releases/2024/04/biden-harris-administration-announces-preliminary-terms-micron-onshore.7 Matt Hourihan,Mark Muro,and Melissa Roberts Chapman,“The Bold Vision of the CHIPS and Science Act Isnt Getting the Funding It Needs,

218、”Brookings,May 17,2023,https:/www.brookings.edu/articles/the-bold-vision-of-the-chips-and-science-act-isnt-getting-the-funding-it-needs/.8 Christine Mui,“How Congress Defanged Bidens Big Science Push,”Politico,March 9,2024,https:/ Madison Alder,“NSF,NIST Appropriations Cuts Met with Disappointment a

219、s Biden Seeks Increases,”Fedscoop,March 15,2024,https:/ Ibid.11 Mui,“How Congress Defanged Bidens Big Science Push.”12“Final U.S.Spending Bills Offer Gloomy Outlook for Science,”Science,March 4,2024,https:/www.science.org/content/article/final-u-s-spending-bills-offer-gloomy-outlook-science.13 Steve

220、n Deitz and Christina Freyman,The State of U.S.Science and Engineering 2024(Alexandria,VA:National Science Foundation,March 13,2024),https:/ncses.nsf.gov/pubs/nsb20243.14 Ibid.15 Ibid.16 Ibid.17 Kaoru Takatsuki,“China Leads High-Tech Research in 80%of Critical Fields:Report,”Nikkei Asia,September 15

221、,2023,https:/ Ian Clay and Robert D.Atkinson,Wake Up,America:China Is Overtaking the United States in Innova-tion Capacity(Washington,DC:Information Technology&Innovation Foundation,January 23,2023),https:/itif.org/publications/2023/01/23/wake-up-america-china-is-overtaking-the-united-states-in-inno

222、-vation-capacity/.19 Yutao Sun and Cong Cao,The Political Economy of Science,Technology and Innovation in China(Cam-bridge:Cambridge University Press,2023),13.20 Ibid.21 Marina Yue Zhang,Mark Dodgson,and David M.Gann,Demystifying Chinas Innovation Machine:Chaotic Order(Oxford:Oxford University Press

223、,2022),6.22 Deitz and Freyman,The State of U.S.Science and Engineering 2024.23“Research and Development Expenditure(%of GDP),”World Bank,accessed May 7,2024,https:/data.worldbank.org/indicator/GB.XPD.RSDV.GD.ZS.24 Sun and Cao,The Political Economy of Science,29.Investing in Science and Technology|32

224、25 Gregory C.Allen,Choking off Chinas Access to the Future of AI(Washington,DC:CSIS,October 11,2022),https:/www.csis.org/analysis/choking-chinas-access-future-ai.26 Office of the U.S.Trade Representative,Findings of the Investigation into Chinas Acts,Policies,and Practic-es Related to Technology Tra

225、nsfer,Intellectual Property,and Innovation Under Section 301 of the Trade Act of 1974(Washington,DC:Office of the U.S.Trade Representative,March 22,2018),https:/ustr.gov/sites/default/files/Section%20301%20FINAL.PDF.27 Ministry of Science and Technology,The Guidelines for the Medium-and-Long-Term Na

226、tional Science and Technology Development Program(20062020)in Mandarin(Beijing:Ministry of Science and Technolo-gy,February 9,2006),https:/ James McGregor,Chinas Drive for Indigenous Innovation:A Web of Industrial Policies(Washington,DC:APCO Worldwide,U.S.Chamber of Commerce,2010),44,https:/ Office

227、of the U.S.Trade Representative,Findings of the Investigation into Chinas Acts,Policies,and Practic-es Related to Technology Transfer,Intellectual Property,and Innovation Under Section 301 of the Trade Act of 1974(Washington,DC:Office of the U.S.Trade Representative,March 22,2018),https:/ustr.gov/si

228、tes/default/files/Section%20301%20FINAL.PDF.30 Xielin Liu and Peng Chang,“Is Chinas Indigenous Innovation Strategy Compatible with Globalization?”East-West Policy Center,Policy Studies 61(2011):15.31 Ibid.32 Ministry of Science and Technology,The Guidelines for the Medium-and-Long-Term National Scie

229、nce and Technology Development Program.33 Sun and Cao,The Political Economy of Science,36.34 Andrea Braun Strelcova,Stephanie Christmann-Budian,and Anna Lisa Ahlers,“The End of Learning from the West?Trends in Chinas Contemporary Science Policy,”Max-Planck-Institut fur Wissenschafts-geschichte,Septe

230、mber 16,2022,https:/www.mpiwg-berlin.mpg.de/observations/end-learning-west-trends-chinas-contemporary-science-policy.35 Keijing Chen et al.,“How Does Industrial Policy Experimentation Influence Innovation Performance?A Case of Made in China 2025,”Humanities and Social Sciences Communications 11,no.4

231、0(2024):2,https:/doi.org/10.1057/s41599-023-02497-x.36 Strelcova,Christmann-Budian,and Ahlers,“The End of Learning from the West?”37 Benjamin Talin,“Chinas Grand Strategy Made in China 2025(MIC25),”More Than Digital,last updat-ed January 18,2021,https:/morethandigital.info/en/chinas-grand-strategy-m

232、ade-in-china-2025-mic25/.38 U.S.Chamber of Commerce,Made in China 2025:Global Ambitions Built on Local Protections(Washing-ton,DC:U.S.Chamber of Commerce,2017),https:/ Shirley Ze Yu,“Why Chinas Plan for New Productive Forces Should Make the West Sit Up,”South China Morning Post,March 16,2024,https:/

233、 Ibid.;and Yue Zhang,Dodgson,and Gann,Demystifying Chinas Innovation Machine,85.41 Steven Deitz and Christina Freyman,The State of U.S.Science and Engineering 2024(Alexandria,VA:National Science Foundation,March 13,2024),https:/ncses.nsf.gov/pubs/nsb20243/discovery-u-s-and-global-r-d#global-r-d.Suja

234、i Shivakumar,Charles Wessner,and Thomas Howell|3342“Definitions of Research and Development:An Annotated Compilation of Official Sources,”National Science Foundation,March 2018,https:/www.nsf.gov/statistics/randdef/rd-definitions.pdf.43 Sun and Cao,The Political Economy of Science,201.44 Jeroen Groe

235、newegen-Lau,“Whole-of-Nation Innovation:Does Chinas Socialist System Give It an Edge in Science and Technology?,”Mercator Institute for China Studies(MERICS),March 5,2024,https:/merics.org/en/report/whole-nation-innovation-does-chinas-socialist-system-give-it-edge-science-and-technology.45 Bloomberg

236、 News,“Tech War:US Said to Weigh Sanctions against Huaweis Secretive Chinese Semi-conductor Supply Network,”South China Morning Post,March 20,2024,https:/ Max J.Zenglein and Anna Holzmann,“Evolving Made in China 2025:Chinas Industrial Policy in the Quest for Global Tech Leadership,”MERICS,MERICS Pap

237、ers on China 8(2019),https:/merics.org/en/re-port/evolving-made-china-2025.47 Sujai Shivakumar,Charles Wessner,and Thomas Howell,“Balancing the Ledger:Export Controls on U.S.Chip Technology to China,”CSIS,February 21,2024,https:/www.csis.org/analysis/balancing-ledger-export-controls-us-chip-technolo

238、gy-china.48 Clay and Atkinson,Wake Up,America.49 Luna Sun,“Chinese Scientists Warn Crippling Red Tape,Restrictions Risk Balking Beijings Bid to Create New Productive Forces,”South China Morning Post,March 11,2024,https:/ Ben Jiang,“Chinas Small Independent Developers See Local Innovation Being Stifl

239、ed by Beijings New App Registration Rule,”South China Morning Post,August 18,2023,https:/ Cong Cao and Denis Fred Simon,“Chinas Talent Challenges Revisited,”in Erik Baark,Bert Hofman,and Jiwei Qian,Innovation and Chinas Emergence(Singapore:National University of Singapore Press,2021),106.52 Amanda L

240、ee,“Is Chinas State-Led Industrial Policy on a Perilous Path?Some Beijing Advisers Warn of Detrimental Implications,”South China Morning Post,March 15,2024,https:/ Clay and Atkinson,Wake Up,America.54 William Alan Reinsch et al.,Optimizing Export Controls for Critical and Emerging Technologies Semic

241、on-ductors,Quantum Technology,AI,and Biotechnology(Washington,DC:CSIS,May 31,2023),3536,https:/www.csis.org/analysis/optimizing-export-controls-critical-and-emerging-technologies.55 Manya Koetse,“In the Race for AI Supremacy,China and the US Are Travelling on Entirely Different Tracks,”The Guardian,

242、January 9,2024,https:/ Huw Roberts et al.,“The Chinese Approach to Artificial Intelligence:An Analysis of Policy,Ethics,and Regulation,”AI&Society 36(June 17,2020):5977,https:/ in Science and Technology|3457 National Institute for Defense Studies,Japan,NIDS China Security Report 2021:Chinas Military

243、 Strategy in the New Era(Tokyo:The National Institute for Defense Studies,November 2020),http:/www.nids.mod.go.jp/publication/chinareport/pdf/china_report_EN_web_2021_A01.pdf.58 Ibid.,18.59 Sam Shead,“U.S.Is Not Prepared to Defend or Compete in the A.I.Era,Says Expert Group Chaired by Eric Schmidt,”

244、CNBC,March 4,2021,https:/ National Security Commission on Artificial Intelligence,The National Security Commission on Artificial Intelligence Final Report(Arlington,VA:National Security Commission on Artificial Intelligence,October 5,2021),https:/cybercemetery.unt.edu/nscai/20211005220330/https:/www

245、.nscai.gov/.61 Ibid.62 Ibid.63 Ibid.64 Patrick Tucker,“US Is Losing AI Edge to China,Experts Tell Lawmakers,”Defense One,July 19,2023,https:/ Ibid.66 Michael C.Horowitz and Gregory C.Allen,“The State of DOD AI and Autonomy Policy,”CSIS,January 9,2024,https:/www.csis.org/analysis/state-dod-ai-and-aut

246、onomy-policy.67“AUKUS Relevant Technologies:Top 10 Country Snapshot,”Australian Strategic Policy Institute,Critical Technology Tracker,June 2023,https:/www.aspi.org.au/report/critical-technology-tracker.68 Jacob Larson et al.,The Evolution of Artificial Intelligence(AI)Spending by the U.S.Government

247、(Wash-ington,DC:Brookings,March 26,2024),https:/www.brookings.edu/articles/the-evolution-of-artificial-intelligence-ai-spending-by-the-u-s-government/.69 Will Henshall,“The U.S.Militarys Investments into Artificial Intelligence Are Skyrocketing,”Time,March 27,2024,https:/ Kathleen Hicks,quoted in Jo

248、seph Clari,“DOD Releases AI Adoption Strategy,”Department of Defense,November 2,2023,https:/www.defense.gov/News/News-Stories/Article/Article/3578219/dod-releases-ai-adoption-strategy/.71 Horowitz and Allen,“The State of DOD AI and Autonomy Policy.”72 Matt Turek and Gregory C.Allen,“The DARPA Perspe

249、ctive on AI and Autonomy at the DOD,”CSIS,March 27,2024,https:/www.csis.org/analysis/darpa-perspective-ai-and-autonomy-dod.73 Tucker,“US Is Losing AI Edge to China.”74 Lauren Leffer,“Bidens Executive Order on AI Is a Good Start,Experts Say,but Not Enough,”Scientific American,October 31,2023,https:/

250、Caroline Nihill,“Biden Administration Requests$3B for Federal AI Application Development,Pro-curement and Integration in 2025 Budget,”FedScoop,March 11,2024,https:/ Shivakumar,Charles Wessner,and Thomas Howell|3576 Madison Alder,“House Lawmakers Optimistic about NAIRR Legislation Prospects as Pilot

251、Moves For-ward,”FedScoop,February 6,2024,https:/ Nihill,“Biden Administration Requests$3B.”78 Koetse,“In the Race for AI Supremacy.”79 Nestor Maslej et al.,The AI Index 2024 Annual Report(Stanford,CA:Stanford University Institute for Human-Centered AI,April 2024),https:/aiindex.stanford.edu/wp-conte

252、nt/uploads/2024/05/HAI_AI-Index-Report-2024.pdf.80 Krystal Hu,“ChatGPT Sets Record for Fastest-Growing User Base-Analyst Note,”Reu-ters,February 2,2023,https:/ Finds SMIC 7nm(N+2)in Huawei Mate 60 Pro,”TechInsights,accessed May 10,2024,https:/ Dave Lawler,“How the U.S.Is Trying to Stay Ahead of Chin

253、a in the AI Race,”Axios,June 29,2023,https:/ Paul Mozur,John Liu,and Cade Metz,“Chinas Rush to Dominate A.I.Comes with a Twist:It Depends on U.S.Technology,”New York Times,February 21,2024,https:/ Muhammad Zulhusni,“China vs the US in AI Race:America Leads,China Playing Catch Up,”Tech Wire Asia,Dece

254、mber 12,2023,https:/ Alexis Keenan,“The AI Arms Race between the US and China Is Heating Up,”Yahoo Finance,March 11,2024,https:/ Security Memorandum on Promoting United States Leadership in Quantum Computing While Mitigating Risks to Vulnerable Cryptographic Systems,”The White House,May 4,2022,https

255、:/www.whitehouse.gov/briefing-room/statements-releases/2022/05/04/national-security-memorandum-on-promoting-united-states-leadership-in-quantum-computing-while-mitigating-risks-to-vulnerable-cryptographic-systems/.87 National Quantum Initiative Act of 2018,Pub.L.No:115-368,132 Stat.5092(2018),https:

256、/www.congress.gov/bill/115th-congress/house-bill/6227/text.88 Sujai Shivakumar,Charles Wessner,and Thomas Howell,“Quantum Cant Be Business as Usual:Issues for the Reauthorization of the National Quantum Initiative Act,”CSIS,August 17,2023,https:/www.csis.org/analysis/quantum-cant-be-business-usual-i

257、ssues-reauthorization-national-quantum-initiative-act.89 Makenzie Holland,“U.S.Weighs National Quantum Initiative Reauthorization Act,”TechTarget,Feb-ruary 21,2024,https:/ Shivakumar,Wessner,and Howell,“Quantum Cant Be Business as Usual.”91 Edward Parker,et al.An Assessment of the U.S.and Chinese In

258、dustrial Bases in Quantum Technology(Santa Monica,CA:RAND,February 2,2022),https:/www.rand.org/pubs/research_reports/RRA869-1.html.92 Nancy Liu,“China Invests Billions in Quantum Computing,Race with US Now Neck-and-Neck,”SDx-Central,February 16,2024,https:/ in Science and Technology|3693 Victoria Be

259、lla,“Tied Game:China,the US and Europe Hit Quantum Internet Technology Mile-stone at Almost the Same Time,”South China Morning Post,May 17,2024,https:/ Australian Strategic Policy Institute,“AUKUS Relevant Technologies.”https:/ Brandon Kirk Williams,“The Innovation Race:US-China Science and Technolo

260、gy Competition and the Quantum Revolution,”Wilson Center,2023,https:/www.wilsoncenter.org/publication/innovation-race-us-china-science-and-technology-competition-and-quantum-revolution.96 Williams,“The Innovation Race:US-China Science and Technology Competition and the Quantum Revo-lution.”97“Quantu

261、m Computing:Its US vs China,”CXOToday,February 20,2024,https:/ Reinsch et al.,Optimizing Export Controls for Critical and Emerging Technologies.99 Dannie Peng,“Chinese Scientists Claim Record Smashing Quantum Computing Breakthrough,”South China Morning Post,October 11,2023,https:/ Dannie Peng,“US Us

262、ers Rush in as China Opens Its Top Quantum Computer Origin Wukong to the World,State Media Reports,”South China Morning Post,January 17,2024,https:/ Williams,“The Innovation Race:US-China Science and Technology Competition and the Quantum Revo-lution.”102 Andrew Jones,“China Is Developing a Quantum

263、Communications Satellite Network,”SpaceNews,March 10,2023,https:/ Dannie Peng,“Two Sessions 2024:Chinese Lawmaker Urges Beijing to Safeguard Tech Production Chain to Give Nation a Quantum Edge,”South China Morning Post,March 1,2024,https:/ Shivakumar and Wessner,“Semiconductors and National Defense:

264、What Are the Stakes?”105“A Cluster of Earthquakes Shakes Taiwan after a Strong Quake Killed 13 Earlier This Month,”Associated Press,April 23,2024,https:/ Shivakumar,Wessner,and Howell,“Balancing the Ledger.”107 Julie Zhu,“Exclusive:China Readying$143 Billion Package for Its Chip Firms in Face of U.S

265、.Curbs,”Re-uters,December 13,2022,https:/ Che Pan and Xinmei Shen,“Tech War:Chinas Big Fund III Brings$47.5 Billion in Fresh Outlay for Na-tions Semiconductor Supply Chain,Analysts Say,”South China Morning Post,May 29,2024,https:/ Shivakumar,Charles Wessner,and Thomas Howell|37109 Sujai Shivakumar,C

266、harles Wessner,and Thomas Howell,“The Strategic Importance of Legacy Chips,”CSIS,March 3,2023,https:/www.csis.org/analysis/strategic-importance-legacy-chips.110 Asa Fitch,“Nvidia Declares AI a Whole New Industryand Investors Agree,”Wall Street Journal,Feb-ruary 22,2024,https:/ Akira Oikawa,Kosuke To

267、shi,and Ryosuke Eguchi,“Led by Nvidia,U.S.Dominates in Generative AI Tech,”Nikkei Asia,March 28,2024,https:/ Che Pan,“Huawei Says its AI Chip Better than Nvidias A100 Amid Chinas Self-Reliance Drive,”South China Morning Post,June 6,2024,https:/ Matt Hamblen,“Intel Says Latest Breakthroughs in Chip D

268、esign Promise More of Moores Law,”Fierce Electronics,December 9,2023,https:/ Shivakumar,Wessner,and Howell,“Balancing the Ledger.”115 National Security Commission on Artificial Intelligence,The National Security Commission on Artificial Intelligence Final Report.116 Ramiro Palma et al.,The Growing C

269、hallenge of Semiconductor Design Leadership(Boston,MA:Boston Consulting Group Global,November 30,2022),https:/ Paul Scherrer Institute,“Semiconductors Reach the Quantum World,”ScienceDaily,December 22,2021,https:/ Shivakumar,Wessner,and Howell,“Quantum Cant Be Business as Usual.”119 Jonathan Reichen

270、tal,“Quantum Artificial Intelligence Is Closer Than You Think,”Forbes,November 20,2023,https:/ Sarah Zheng and Gao Yuan,“China to Mobilize Nation as It Fights US for Tech Supremacy,”Bloomberg Law,March 5,2024,https:/ Ibid.122 Mui,“How Congress Defanged Bidens Big Science Push.”1616 Rhode Island Avenue NWWashington,DC 20036202 887 0200|www.csis.orgCOVER PHOTO JACKIE NIAM/ADOBE STOCK