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81. Rewire: Semiconductors and U.S. Industrial Policy

Author:
Chris Miller
Publication Date:
09-2022
Content Type:
Special Report
Institution:
Center for a New American Security (CNAS)
Abstract:
As the United States considers industrial policy for the first time in decades, it should learn lessons from prior government efforts to shape the semiconductor industry, in the United States and abroad. The U.S. government has played a major role in the semiconductor industry since the invention of the first integrated circuit, via funding scientific research and via military procurement, which has driven the commercialization of new technology. However, though government—and specifically, the Defense Department—has had deep connections with the chip industry, it has played only a supportive role in building America’s semiconductor industry, with the key innovations and firms emerging from private-sector expertise. Other countries have experimented with industrial policy toward semiconductors too. Success stories in industrial policy generally have involved investing in skilled workforces and ensuring competitiveness by pushing domestic firms to sell to international markets. Simply pouring capital into a country’s chip industry rarely has been a winning strategy. Today, the U.S. government should focus policy toward the semiconductor industry around four main objectives: promoting technological advances, guaranteeing security of semiconductor supply, retaining control of choke points, and slowing China’s technological advances.
Topic:
Science and Technology, Strategic Competition, Industry, Semiconductors, and Policymaking
Political Geography:
China, North America, and United States of America

82. Digital Allies: Deepening U.S.–South Korea Cooperation on Technology and Innovation

Author:
Jacob Stokes, Alexander Sullivan, and Joshua Fitt
Publication Date:
03-2022
Content Type:
Special Report
Institution:
Center for a New American Security (CNAS)
Abstract:
Rapid advances in digital and other emerging technologies have become a defining feature of international geopolitics and geoeconomics in the 21st century. This report explores how the United States and South Korea can broaden and deepen their alliance through expanded cooperation on issues related to technology and innovation. Despite the continued centrality of traditional security threats—especially those emanating from North Korea—both the United States and South Korea are seeking to deepen and broaden alliance cooperation to address a larger set of shared challenges and opportunities. To that end, both capitals have noted the increasing importance of key technologies for economic growth as well as for security and governance. The two countries are at the very beginning of defining how an augmented alliance will approach technology coordination, but they have decades of economic and trade ties on which to build. Technology issues are central to the policy platforms of both U.S. President Joe Biden’s and South Korean President Moon Jae-in’s administrations and will continue to be important under future administrations in both countries. In addition to examining general consultative frameworks, enhancing U.S.-South Korea technology cooperation requires assessing the state of bilateral interactions sector by sector and issue by issue. The two countries occupy leading roles in many foundational technology ecosystems within the evolving global economy, such as semiconductors, telecommunications, and advanced batteries. In emerging fields such as artificial intelligence and quantum computing, U.S.-Republic of Korea (ROK) collaboration harbors the potential not only to raise living standards through technological breakthroughs but also to promote governance norms in accordance with liberal democratic principles. Potential opportunities for Washington and Seoul to deepen cooperation extend beyond the bilateral context to regional and global affairs, through coordination of the U.S. Indo-Pacific Strategy and South Korea’s New Southern Policy or its successor under the new president-elect, Yoon Suk-yeol. Rapid technological growth and digitization in Indo-Pacific countries, particularly those of Southeast Asia, present both immense economic opportunity and a range of governance challenges. The United States and South Korea have an important opportunity to ensure that technological development promotes a free, open, secure, and prosperous region. Taken together, the strategic rationales for enhancing U.S.-South Korea cooperation on technology issues are strong. Meaningful efforts to that end are already underway, but more can and should be done to deepen alliance coordination. Policymakers in Washington and Seoul should consider recommendations spanning the areas of foreign policy and international organizations, coordination on key technologies, trade and investment, and digital governance and domestic policy. Doing so will enable the alliance to meet the challenges and seize the opportunities presented by the current regional and global landscape.
Topic:
International Cooperation, Science and Technology, Bilateral Relations, Alliance, and Innovation
Political Geography:
Asia, South Korea, North America, and United States of America

83. Aligning U.S.-Israeli Cooperation on Technology Issues and China

Author:
Jonathan Schanzer, Shira Efron, Martijn Rasser, and Alice Hickson
Publication Date:
03-2022
Content Type:
Special Report
Institution:
Center for a New American Security (CNAS)
Abstract:
The United States and Israel have a long history of working together as close allies. Theirs is a relationship based on common values and security interests. In recent years, the alliance’s highlights have included close cooperation on counterterrorism and intelligence, as well as deepening economic ties, technological cooperation, and mutual knowledge transfer. The United States continues to provide Israel with significant security assistance based on a memorandum of understanding signed by both countries in 2016, which commits the United States to provide Israel with at least $3.8 billion per year in aid. The relationship is further strengthened by deep personal connections at the government and business levels as well as through collaboration between the two countries’ technology sectors. In recent years, however, the United States and Israel have differed regarding their threat perceptions and approaches to China. Whereas Israel sees China primarily as an economic partner and is increasing its ties with the country, the consensus view in Washington increasingly sees China as a global strategic rival—militarily, economically, and technologically—even while the Joe Biden administration preserves space for cooperation with Beijing in areas of common interest. In recent years, U.S. and Israeli officials have had public and private disagreements over several Chinese investments in Israeli infrastructure and technology. Although Chinese investments in Israel have declined since their peak in 2018, and even though these disagreements have yet to be aired publicly by the Biden administration and the Naftali Bennett–Yair Lapid government, this issue is likely to remain high on the agenda. The most critical challenges in the bilateral relationship are technology protection and collaborative innovation. Chinese investment in Israeli technology companies, including those that develop dual-use technologies, remains largely unregulated. Although Israel does not export defense technology to China and has placed stringent regulation on the export of dual-use technologies, the line between civilian and dual use is increasingly blurred, and Israel has yet to fully adapt to this reality. Washington, for its part, has not been entirely clear about how it expects American companies and allies to limit their roles. The United States has been slow to offer alternatives to allies such as Israel for forgoing cooperation with China and has yet to develop a collaborative technological innovation framework that builds on the cumulative strengths of the United States and its allies, benefits all, and helps to tip the balance in the technological competition with Beijing. To address the multidimensional challenge presented by China, the United States must enhance collaboration with its allies, including Israel, its closest partner in the Middle East. Fortunately, when the United States and Israel have had differing perspectives in the past, they have successfully engaged in deep bilateral consultations to work through these differences. These efforts have not always resulted in complete alignment, but they have significantly reduced disagreements and allowed for greater cooperation. This paper represents the most comprehensive public analysis to date of the challenges facing U.S.-Israeli cooperation on issues related to technology and China. It proposes an approach for the United States and Israel to align their policies and bridge differences by focusing on three central areas.
Topic:
International Cooperation, Science and Technology, Bilateral Relations, and Alliance
Political Geography:
China, Middle East, Israel, North America, and United States of America

84. When the Chips Are Down: Gaming the Global Semiconductor Competition

Author:
Becca Wasser, Martijn Rasser, and Hannah Kelley
Publication Date:
01-2022
Content Type:
Special Report
Institution:
Center for a New American Security (CNAS)
Abstract:
The United States is in a strategic competition with a well-resourced and capable opponent. China seeks a global role that is broadly at odds with the strategic interests and values of America and fellow democracies. Technology, a key enabler of political, economic, and military power, is at the center of this competition. Within this competition, semiconductors loom large. Chips are a driving force for breakthroughs in a range of critical technology areas, from AI to synthetic biology to quantum computing. Semiconductors are essential to the military systems used by the United States and its allies and partners to defend themselves and their interests. At a fundamental level, the day-to-day functioning of modern society hinges on dependable access to chips; critical infrastructure, transportation networks, and digital communication cannot function without them. Semiconductor supply chains form an intricate global web, with several countries and companies serving as important nodes. Some of these nodes have such outsized importance that any disruption would have significant and detrimental cascading effects for U.S. national and economic security. Taiwan is the central node in the semiconductor supply chain. Home to the Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chip foundry, more than half of the world’s outsourced semiconductor manufacturing and nearly all leading-edge manufacturing capacity is in Taiwan. Secure access to the output of Taiwan’s semiconductor industry is therefore a strategic necessity. Yet, while policymakers understand the critical importance of Taiwan’s semiconductor industry, the myriad of factors and nuances essential to developing policies and plans that protect its integrity, mitigate risk, and reduce second-order consequences are insufficiently studied.
Topic:
Science and Technology, Strategic Competition, Industry, and Semiconductors
Political Geography:
China, Taiwan, Asia, North America, and United States of America

85. Operation Warp Speed, Encore: A Case for US Leadership to Drive Market-Based Global Health Innovation

Author:
Rachel Silverman
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
he experience of the COVID-19 pandemic—both in the US and around the world—has helped highlight the potential feasibility and importance of biomedical R&D for global health and welfare. In the midst of a very large, focused expansion of public expenditure for R&D on COVID-19—both direct (e.g. supporting trials) and indirect (e.g. promised revenue via advanced purchase agreements)—dramatic and rapid advancements in biomedical science took place, with very large commensurate social and health benefits. Drawing from this experience and momentum, this paper argues that the US should deepen its engagement and ambition in global health R&D to drive other similarly transformative improvements in global health outcomes and security—protecting American citizens from global health threats while also helping save and improve lives and livelihoods around the world. To provide illustrative evidence about the potential of such investment, it lays out three indicative case studies where US government investment, at least partially in the form of a pull mechanism, could help incentivize and drive high-value innovation: for new antimicrobials; a rapid, low-cost TB test; and for next-generation, accessible whole genome sequencing. Using clear and generally conservative assumptions, the case studies describe how such biomedical innovation could generate large returns on investment—in two of three cases exclusively from the perspective of US domestic welfare—while also saving and improving lives around the world. It concludes with a discussion of implications for research funders, emphasizing the need for large R&D investments to tackle commensurately large global health threats.
Topic:
Science and Technology, Hegemony, Leadership, Innovation, and COVID-19
Political Geography:
North America and United States of America

86. An Ambitious USG Advanced Commitment for Subscription-Based Purchasing of Novel Antimicrobials and Its Expected Return on Investment

Author:
Rachel Silverman and Adrian Towse
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
Antimicrobial drugs form the backbone of modern medicine. Yet their lifespan is naturally limited; over time, use of these drugs selects for mutations that survive exposure to those same drugs, driving “antimicrobial resistance,” or AMR. Already, drug-resistant infections kill an estimated 35,000 Americans and 1.27 million global citizens every year. In the absence of sufficient research and development (R&D) investment for new antimicrobials, deaths from drug-resistant infections could increase dramatically in the coming decade. However, the R&D pipeline for new antimicrobials remains sparse, constrained by an array of market failures that prevent private companies from capturing a sufficient private return on investment (ROI) despite the very high social value of new antimicrobials. Widespread recognition of these market failures among experts and policymakers has driven a search for creative solutions, and generated enthusiasm for the use of pull mechanisms which could help incentivize antibiotic development. One particularly promising pull approach—so-called “subscription models”—would offer guaranteed annual payments to successful antibiotic developers delinked from sales volumes. A subscription approach is included in the pending PASTEUR Act, which is legislation introduced by lawmakers in the US House of Representatives and Senate and endorsed in President Biden’s 2023 budget request. In this paper, we consider the expected return on investment for such a program—that is, an ambitious new program to incentivize antibiotic development via a US government subscription-based pull mechanism (though not necessarily the PASTEUR Act, per se). We construct an illustrative subscription program from first principles, with parameters drawn (where possible) from the literature and some simplifying and deliberately conservative assumptions about program design and remuneration. We model the 10- and 30-year costs and benefits of such an initiative, both from the US domestic perspective and from a global welfare perspective. We find that the program is likely to generate a very high social ROI in both the short and long-term. From the US domestic perspective—considering both the value of averted death/disease and associated hospital costs—ROI is calculated at 6:1 over a 10-year time horizon and 28:1 over a 30-year time horizon. From the global perspective—exclusively considering the health value of DALYs (Disability Adjusted Life Years) averted—ROI grows to 27:1 over a 10-year time horizon and 125:1 over the full 30-year program duration. Sensitivity analysis suggests that the overall high returns are robust under a wide variety of alternative assumptions and scenarios. Based on these high social returns, we encourage the US Congress to urgently finance and authorize a subscription program for new antimicrobials, with particularly consideration for the PASTEUR Act.
Topic:
Health, Science and Technology, Innovation, and Medicine
Political Geography:
North America and United States of America

87. Governing the Global Commons: Challenges and Opportunities for US-Japan Cooperation

Author:
Kristi Govella, John Bradford, Kyoko Hatakeyama, Saadia M. Pekkanen, Setsuko Aoki, James Lewis, and Motohiro Tsuchiya
Publication Date:
12-2022
Content Type:
Policy Brief
Institution:
German Marshall Fund of the United States (GMFUS)
Abstract:
The global commons—domains beyond the sovereign jurisdiction of any single state but to which all states have access—are essential to the stability and prosperity of the international order. In addition to the high seas, outer space, the atmosphere, and Antarctica, which are defined as global commons by international law, analysts have also suggested that other domains such as cyberspace may also qualify as potential commons. These domains provide essential public goods such as trade routes, transportation and communication networks, fish stocks, satellite imagery, global positioning, and e-commerce infrastructure that benefit countries around the world. To successfully manage the resources of the global commons and ensure open access to their spaces, effective governance structures must exist to accommodate and integrate the interests and responsibilities of state and non-state actors. Consequently, states have tried to come to agreements in each domain about how to enable broad access, avoid conflict, and enable cooperation. Over time, these discussions have resulted in the creation for each domain of a “regime,” a set of implicit or explicit principles, norms, rules, and decision-making procedures around which actors’ expectations converge (see Box 1). These regimes can take shape in the form of international law, national law, local regulations, private standards, and institutional bodies. They differ dramatically in maturity and complexity: the governance regime of the oceans has developed over the course of centuries, while the rules and norms of cyberspace have only had a few decades to coalesce. However, all these regimes attempt to solve similar dilemmas surrounding shared access and resources.
Topic:
Foreign Policy, Science and Technology, Democracy, Economy, Trade, and Defense Cooperation
Political Geography:
East Asia, Asia, United States of America, and Indo-Pacific

88. Microchips and Semiconductors: The U.S. Seeks Autonomy

Author:
Andrzej Dąbrowski
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
The Polish Institute of International Affairs
Abstract:
The United States has turned to support of the domestic microchip industry in response to the increased risk of Chinese aggression against Taiwan, one of the leading producers, as well as to address disruptions in supply chains caused by the COVID-19 pandemic. A law on this passed with bipartisan consent and is intended to help finance a more resilient American sector towards global changes in manufacturing these components. Thanks to the CHIPS Act, the U.S. can reduce its dependence on microchip imports and undermine China’s ability to dominate the market.
Topic:
Markets, Science and Technology, Autonomy, Industry, Supply Chains, Semiconductors, and Microchips
Political Geography:
China, Asia, North America, and United States of America

89. China and the U.S. Compete for Global Techno-Security Dominance

Author:
Tai Ming Cheung
Publication Date:
07-2022
Content Type:
Policy Brief
Institution:
University of California Institute on Global Conflict and Cooperation (IGCC)
Abstract:
In the struggle for global geostrategic and geoeconomic supremacy between the United States and China, the technosecurity sphere where economics, technological innovation, and national security meet has become a principal battleground. Two contrasting models are pitted against each other: China’s state-led top-down approach and the United States’ market-driven bottom-up system. Which of them will ultimately prevail will depend on how capable, robust, and adept they are in meeting the challenge of rapid and disruptive change? This brief examines the underpinnings of U.S.-China great power technosecurity competition and assesses what the countries’ different approaches imply for future techno-security rivalry.
Topic:
Security, Industrial Policy, Science and Technology, Strategic Competition, and Geoeconomics
Political Geography:
China, Asia, North America, United States of America, and Indo-Pacific

90. Digitalisation for Sustainable Infrastructure: The Road Ahead

Author:
Carlo Secchi and Alessandro Gili
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Italian Institute for International Political Studies (ISPI)
Abstract:
In today’s tumultuous and fast-changing times, digitalisation and technology are game changers in a wide range of sectors and have a tremendous impact on infrastructure. Roads, railways, electricity grids, aviation, and maritime transport are deeply affected by the digital and technological transition, with gains in terms of competitiveness, cost-reduction, and safety. Digitalisation is also a key tool for fostering global commitment towards sustainability, but the race for digital infrastructure is also a geopolitical one. As the world’s largest economies are starting to adopt competitive strategies, a level playing field appears far from being agreed upon. Why are digitalisation and technology the core domains of global geopolitical competition? How are they changing the way infrastructure is built, operated, and maintained? To what extent will road, rail, air, and maritime transport change by virtue of digitalisation, artificial intelligence, and the Internet of Things? How to enhance cyber protection for critical infrastructure? What are the EU’s, US’ and China's digital strategies?
Topic:
Science and Technology, Infrastructure, European Union, Sustainability, and Digitalization
Political Geography:
China, Europe, Asia, North America, and United States of America