Decades of innovation -- driven almost entirely by DoD and the Defense Industrial Base -- have kept the United States at the forefront of modern military capability. Now, however, it is the commercial sector that is defining the leading edge of technology and innovation. In this information-driven era, the military's conventional models of creating and metabolizing innovation are no longer optimal.
“While we must effectively respond to China and others looking to do us harm, we must avoid inadvertently undermining the very policies which made us the leader in turning government funded R&D into cutting edge products. Unfortunately, the initial bureaucratic response is not reassuring on that score.”
This past summer, Oxford University was again ranked as the topmost university in the world, according to an article in The Wall Street Journal. While the article dutifully numbered the top universities across the globe, one seemingly small statistic stood out (at least to me). “For the first time, China is now spending more money [on higher education] than any other nation...”
The next great naval innovation is here, represented by the next generation of aircraft carriers now entering the fleet - the Ford-class. The Ford-class carriers are larger, more efficient, and more powerful. The technology advancements implemented on these new carriers translates not only into greater capability, but also significant cost savings over the 50+ years of each carrier’s service life.
China’s economic performance over the past 40 years has been nothing short of miraculous. In 1978, when Deng Xiao-ping became chairman of the Chinese Communist Party, or CCP, China’s GDP was about $150 billion in constant US dollars, according to the World Bank. Last year, 40 years after the transformation Deng initiated in China, its GDP in constant US dollars had soared to over $13 trillion dollars, a rate of growth of roughly 10% a year. In recent years, this growth rate has slowed to around 6%, but the overall rise of China’s economy has been simply astonishing.
Innovation has always relied, to some degree, on government support. But a recent study suggests that public funding might be even more influential than it seems. “Nearly a third of US patents rely directly on US government funded research,” says Dennis A. Yao, Lawrence E. Fouraker Professor of Business Administration and co-head of the Strategy Unit at Harvard Business School.
Over the last 12 years, the U.S. patent system largely has become a compulsory licensing system, and increasingly so. This obviously has ramifications for all patent owners. And during this time period, Congress also passed the America Invents Act, which created what’s known as the Patent Trial and Appeal Board (PTAB), which has made it more easy to invalidate patents in the United States. As it turns out, 90% of patents that actually get to a final decision at the PTAB are found to have a mistake.
When news broke of Sputnik’s trip outside our atmosphere, it sent shock waves through the American public and the U.S. government. The Defense Department immediately announced funding for the Explorer -- the vehicle that would become the first American object in space -- and Congress created NASA. But now, the United States is once again facing a potential Sputnik moment as countries like Russia, China and even India rapidly develop capabilities that threaten our use of and our access to space.
One critical area of innovation is in quantum information technologies. Late last month, Google announced it achieved Quantum Supremacy in computing. A team led by John Martinis from Google and the University of California, Santa Barbara, used a 53 qubit quantum computer to solve a mathematical problem in just three minutes that would take the fastest current computer 10,000 years to calculate. This small, profound step is the tip of the spear for a new technology.
Our rate of economic productivity growth, for example, is going down, not up. The rate of productivity growth in the US has been just 1.1%, far below the 3.7% rate of growth we achieved from 1947 to 2007, according to the US Bureau of Labor Statistics. This is not what exponential technology has promised us. Indeed, I consider it an Exponential Paradox: technological advance is accelerating, while economic productivity growth is declining.