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31. Securing Intellectual Property for Innovation and National Security

Author:
Sujai Shivakumar
Publication Date:
03-2022
Content Type:
Special Report
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
The United States is engaged in a global competition for innovation, with critical implications for the nation’s continued technological leadership, competitiveness, and security. To win, the United States will need to leverage its advantages at home, including its robust intellectual property (IP) rights system and the innovative zeal of its entrepreneurs. It should also look abroad—setting the pace for scientific cooperation with allies and strategic partners, as well as developing shared international technical standards through the contributions of experts from around the globe. Most pressingly, the United States should not adopt policies that weaken protection of U.S.-owned patents—which would both disincentivize innovation in the United States and support Chinese efforts to dominate critical standards and other advanced technologies. Yet a recent proposal of the Antitrust Division of the U.S. Department of Justice (DOJ) does just that. Launched as a consultation, its Draft Policy Statement on Licensing Negotiations and Remedies for Standards-Essential Patents Subject to F/RAND Commitments is promoted as an effort to encourage good-faith licensing negotiations and to address the scope of remedies available to patent owners who have agreed to license their essential technologies on fair, reasonable, and non-discriminatory (F/RAND) terms. While this draft policy seems like an innocuous administrative change, it has the potential to do significant damage to the United States’ innovation engine and, by extension, to its national security.
Topic:
Security, Intellectual Property/Copyright, Innovation, and Strategic Competition
Political Geography:
North America and United States of America

32. Data Protection or Data Utility?

Author:
Alexander Kersten and Issac A. Robinson
Publication Date:
02-2022
Content Type:
Special Report
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
Despite the economic upheaval wrought by the Covid-19 pandemic, the United States is now poised to enter a new period of productivity growth with the widespread deployment of artificial intelligence (AI) technologies. And just as past eras’ technologies have been driven entirely by the consumption of resources such as steam, coal, oil, and natural gas, this AI-driven period will rely on data. Yet, while this data-driven economic growth model has proven benefits to both individuals and firms, it also raises serious concerns over individuals’ data privacy. A key challenge in this regard is to ensure that data is handled securely and that the privacy of American citizens is protected. Because of the regard paid to data protection and privacy over the past decade, the proliferation of digitization has made privacy policy a part of innovation policy. However, until now, policymakers have viewed data use and data protection as trade-offs, with some nations adopting strict control of data flows. These measures have not been effective in practice; strict curbs have stifled innovation while doing relatively little to protect privacy. An alternative is to deploy promising cryptographic software solutions that can enhance privacy while still allowing access to data. This solution not only unlocks the commercial potential of data for use by firms, law enforcement, nonprofits, and researchers but also protects individuals’ privacy. Realizing the benefits of this win-win solution will require further development and widespread adoption of emerging cryptographic software solutions.
Topic:
Science and Technology, Innovation, Cyberspace, and Encryption
Political Geography:
North America and United States of America

33. Cybersecurity for innovative small and medium enterprises and academia

Author:
Franklin D. Kramer, Melanie J. Teplinsky, and Robert J Butler
Publication Date:
01-2022
Content Type:
Special Report
Institution:
Atlantic Council
Abstract:
Innovation is fundamental to United States global leadership, critical both for the economy and for national security. Yet the resilience of the US innovation ecosystem against adversary cyber espionage and attack—most specifically from China—has not received the attention required, particularly given the essential innovation roles played by small and medium-sized enterprises (SMEs) and by academia. In response to that challenge, this report sets forth a proposal for expert-provided cybersecurity resilient architectures for SMEs and academia that are engaged in the development and operation of key emerging and advanced technologies. Such cybersecurity resilient architectures would be operated by the private sector and funded through the establishment of transferable cybersecurity investment tax credits. The use of such architectures for the protection of emerging and advanced technologies would play a key role in ensuring that the United States maintains its worldwide innovation leadership.
Topic:
Cybersecurity, Innovation, Academia, and Resilience
Political Geography:
China, Asia, North America, and United States of America

34. Global Value Chains, Risk Perception, and Economic Statecraft

Author:
Phoebe Moon
Publication Date:
01-2022
Content Type:
Policy Brief
Institution:
University of California Institute on Global Conflict and Cooperation (IGCC)
Abstract:
Many countries, including the United States and China, have come to see economic statecraft as superior to armed conflict. Faced with a trading partner’s economic sanctions, some countries try to avoid risk by complying with or ignoring the coercer’s demands, but others retaliate and escalate conflict. In recent years, sanctions have been applied, not only to “rogue” states, but against trading partners. The United States and China, but also Japan, Australia, and Canada, were either the target or purveyor of economic coercion by or against trading partners in the last five years. However, not all resulted in trade wars. When, then, do economic sanctions lead to trade wars? This policy brief examines the ongoing Japan-South Korea trade dispute with a focus on how policymakers’ risk perceptions regarding global value chains (GVCs) can influence when trade wars take shape.
Topic:
Industrial Policy, National Security, Economy, Innovation, Global Value Chains, and Geoeconomics
Political Geography:
China, United States of America, and Indo-Pacific

35. Opening Up Military Innovation: Effects of Bottom‐​Up Reforms to U.S. Defense Research

Author:
Sabrina Howell, Jason Rathje, John Van Reenen, and Jun Wong
Publication Date:
02-2022
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
The U.S. economy’s productivity growth has slowed down in recent decades. This slowdown appears due in part to declining innovation, especially among high‐​growth new firms, making the design of innovation incentives particularly important. One overlooked but crucial decision a government or private‐​sector research funder must consider is whether to take a centralized top‐​down approach, tightly specifying the desired innovation, or a more open bottom‐​up approach, giving more latitude to firms to define their research proposals. The bottom‐​up approach may be useful if the research funder is uncertain about what opportunities exist. We compare these two strategies by studying a major reform to the Small Business Innovation Research (SBIR) program at the U.S. Air Force.
Topic:
Reform, Economy, Research, Innovation, Defense Industry, and Military
Political Geography:
North America and United States of America

36. The Effect of Tax Avoidance Crackdown on Corporate Innovation

Author:
Qin Li, Mark (Shuai) Ma, and Terry Shevlin
Publication Date:
02-2022
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
The past three decades have witnessed significant increases in corporate tax avoidance at both the state and federal levels. U.S. firms utilize one of the most important tax avoidance strategies, which involves extensively using intangible assets to shift taxable income from high‐​tax areas to low‐​tax areas to reduce income taxes. To combat such income‐​shifting behavior and crack down on tax avoidance, more than 20 U.S. state governments have adopted addback statutes that specifically target tax‐​motivated income‐​shifting transactions that use intangibles. These statutes require firms within the adopting state to add back intangible‐​related expenses paid to related parties in other states to their state taxable income. For example, Connecticut adopted an addback statute in 1999. That means if a firm’s subsidiary in Connecticut pays royalty fees for using patents held by a subsidiary in another state that does not tax intangible income, the firm needs to add the royalty fees to the taxable income reported in Connecticut. Thus, these provisions are expected to effectively limit firms’ ability to avoid paying state income taxes by preventing them from using intangible assets to shift income across states. Different state governments adopted the addback statutes at different times, providing a powerful setting for examining the economic consequence of this tax policy.
Topic:
Economic Policy, Innovation, Corporations, and Tax Evasion
Political Geography:
North America and United States of America

37. The Race to Electric Vehicles: Technology, US-China Rivalry, and Big Money

Author:
Ariel Sobelman
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
In recent years Israel has become a leading player in auto tech, and China is interested in Israeli developments in a field that is expected to assume a significant role in the rivalry between Washington and Beijing. Therefore, it is important for Israel to define a national strategy on the issue, in order to avoid unnecessary involvement in the inter-bloc clash
Topic:
Green Technology, Innovation, Rivalry, and Electric Vehicles
Political Geography:
China, Asia, North America, and United States of America

38. Introducing Third Way’s US-China Digital World Order Initiative

Author:
Valerie Shen and Jayson Browder
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Third Way
Abstract:
If it wasn’t clear three months ago, it is clear now: the next global era will be defined by democracy versus autocracy. In this competition, a new and decisive divide pits America’s approach of “digital democracy” against China’s approach of “digital autocracy.” This great divide places the US and allies on one side and China's unfettered access to sensitive data on the other. China’s digital authoritarianism has been described as "one giant QAnon" and is ubiquitous among the 1.4 billion inhabitants of the country. Moreover, one of the greatest threats to American national security interests is if China prevails in exporting and normalizing its model of digital supremacy. China’s global network of surveillance systems is antithetical to liberal democratic values, as it monitors, punishes, and conditions citizens, as well as influences them through automated disinformation campaigns. China’s ambition for global digital supremacy is real and supported by aggressive diplomatic efforts and massive financial investments. The effort by the United States and like nations to maintain a peaceful and prosperous world order will require a level of sophistication and commitment unrivaled in our history. China is not only an adversary. It is sometimes a partner whose massive economy is deeply entwined with that of the US and other friendly nations. This is not the zero-sum game of the Cold War conflict, and the hope is that it never becomes so. Will liberal democracies strengthen and proliferate or weaken and dwindle in the 21st century? The Chinese state intends to shape the global digital order in its image by redrawing technological norms and standards. Ultimately, the US-China national security competition may hinge on who sets the digital world order.
Topic:
Science and Technology, Authoritarianism, Democracy, Digital Economy, Innovation, and Rivalry
Political Geography:
China, Asia, North America, and United States of America

39. Three Reasons Why CHIPS-plus is a Big Win for US National Security

Author:
Tom Klein
Publication Date:
08-2022
Content Type:
Commentary and Analysis
Institution:
Third Way
Abstract:
On August 9th, 2022, President Biden signed vital bipartisan legislation to compete with China. H.R. 4346, called the CHIPS and Science Act or “CHIPS-plus,” would pave the way for nearly $280 billion in incentives to boost US-based chip manufacturing, scientific research, technology standards setting, and STEM education. These initiatives directly protect our immediate security vulnerabilities in the US military and support our long-term national security competition with China by promoting democratic norms and spurring critical defense innovations.
Topic:
Security, National Security, Science and Technology, Military Strategy, Innovation, and CHIPS
Political Geography:
China, Asia, North America, and United States of America

40. Software Defines Tactics: Structuring Military Software Acquisitions for Adaptability and Advantage in a Competitive Era

Author:
Jason Weiss and Dan Patt
Publication Date:
12-2022
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
You would not be reading this if you did not realize that it is important for the Department of Defense (DoD) to get software right. There are two sides to the coin of ubiquitous software for military systems. On one side lies untold headaches—new cyber vulnerabilities in our weapons and supporting systems, long development delays and cost overruns, endless upgrade requirements for software libraries and underlying infrastructure, challenges in modernizing legacy systems, and unexpected and undesirable bugs that emerge even after successful operational testing and evaluation. On the other side lies a vast potential for future capability, with surprising new military capabilities deployed to aircraft during and between sorties, seamless collaboration between military systems from different services and domains, and rich data exchange between allies and partners in pursuit of military goals. This report offers advice to help maximize the benefits and minimize the liabilities of the software-based aspects of acquisition, largely through structuring acquisition to enable rapid changes across diverse software forms. This report features a narrower focus and more technical depth than typical policy analysis. We believe this detail is necessary to achieve our objectives and reach our target audience. We intend this to be a useful handbook for the DoD acquisition community and, in particular, the program executive officers (PEOs)1 and program managers as they navigate a complex landscape under great pressure to deliver capability in an environment of strategic competition. All of the 83 major defense acquisition programs and the many smaller acquisition category II and III efforts that make up the other 65 percent of defense investment scattered across the 3,112 program, project, and activity (PPA) line items found in the president’s budget request now include some software activity by our accounting.2 We would be thrilled if a larger community—contracting officers, industry executives, academics, engineers and programmers, policy analysts, legislators, staff, and operational military service members—also gleaned insight from this document. But we know that some terms may come across as jargon and that not everyone is familiar with the names of common software development tools or methods. We encourage them to read this nonetheless and are confident that the core principles and insights we present are still accessible to a broader audience.
Topic:
Defense Policy, National Security, Science and Technology, Innovation, and Software
Political Geography:
North America and United States of America