By The Honorable David C. Gompert

Now that China is all-in for technological competition, both the presumption of American primacy and the proper roles of US government and industry are open to debate.

The Digital Age began 40 years ago when telecommunications linked up computers. It is now giving way to a new era – call it the Quantum Age – in which machines will learn and calculate at astounding speeds. Information-technology (IT) companies, small and large, are offering artificial intelligence (AI), which enables computers to acquire knowledge and make reasoned choices.1 AI is already being used in management, driverless vehicles and sensory recognition. The market for it is growing by almost 50% per annum and will reach $400 billion in five years.2 Quantum computing exploits the probabilistic behaviour of subatomic particles, producing ‘qubits’ instead of digital bits (1s and 0s). Google claims quantum computing can solve in minutes problems that today’s most powerful supercomputer would take 10,000 years to finish. Though still in incubation, quantum computing may one day revolutionise human intellectual endeavour, especially when coupled with AI.

Apart from the untold economic benefits of these technologies, they could also transform warfare. The US military is incorporating AI to make more sense and better use of information in logistics and in command, control, communications, computing, intelligence, surveillance and reconnaissance (C4ISR). This could dramatically improve operational effectiveness, which depends crucially and increasingly on information. AI is also expanding the capabilities of complex autonomous systems – for instance, crewless planes and ships – to operate against advanced defences. Although quantum computing’s military benefits are harder to gauge, it is expected at least to transform communications cryptology and cyber security. Just as the United States has led the world in using digital technology to achieve military superiority, it can – and, in my view, must – take and keep the lead in this new age.

Enter China

Faith that the United States is predestined to lead in AI and quantum computing is misplaced and potentially disastrous. The reason is China. Recall that the previous opposing superpower, the Soviet Union, proved unable to compete with the United States in digital technology, which contributed to its loss of the Cold War and then its demise. The centrally planned Soviet economy punished risk-taking and stunted creativity, just as its paltry consumer markets and hostility towards profit-making prevented the formation and flow of capital to create value. In sharp contrast, China is showing it can compete technologically and is determined to succeed, for both economic and military reasons. On paper, China combines the power of capitalism with that of the state. This purportedly affords it advantages over market capitalism in generating technology and reaping its benefits.

Anyone who thinks that pandemic threats to American life make technological competition with China less critical should think again. COVID-19 reminds us that security depends on more than military power. New technologies can enhance security across the board. For instance, AI has the potential to improve the diagnosis, treatment and forecasting of disease, all the better to prepare for and contain its spread. While it is neither realistic nor necessary to monopolise high-tech responses to health threats, US leader­ship in this area would have clear advantages.

The Chinese government is shovelling money into new technologies. It reports that China’s core AI industry generates about $30bn a year in revenue, nearly $400bn when AI-related industries are counted. The Chinese unabashedly aspire to global leadership in AI by 2030. China is also poised to make a major leap in quantum computing. Even as Google and IBM race to produce useful quantum machines, so do China’s Alibaba and Huawei. China is said to be leading in quantum communications (for example, with satellites), which spells trouble for the United States in code-breaking and cyber security. Broader trends in research and development (R&D) reveal a two-horse race, with the US and China neck-and-neck at about $500bn a year, between 2% and 3% of GDP. Chinese R&D, mainly state-sponsored, grew at around 17% annually between 2000 and 2017, compared to roughly 4% growth for – mainly private – US R&D.3

The Chinese have certain advantages. As a high-tech ‘follower’, China can learn from the world leader and thus avoid false starts and get better return on investment. Also, the price China charges for access to its vast domestic market and low-cost labour is the transfer of advanced US products and production technology. While this transfer is typically licensed and nominally voluntary – if effectively coerced – the Chinese are skilled and relentless at robbing US technology through infiltration and cyber theft. Together with an economy that has been very strong until lately, these methods have helped China close the gap with the United States. Depending on how the US responds, as well as on economic growth in each country, it is not far-fetched to project that China will take the lead in the defining technologies of the Quantum Age.

Cheerleaders of the American private sector point out that US companies spend $5 on R&D for every $1 spent by Chinese companies.4 Yet recall that the United States and China nationally spend about the same amount (roughly $500bn a year) on R&D. So the Chinese state significantly outspends both the US government and the Chinese private sector on R&D. While free-market proponents would argue that the American approach is superior over the long run and in most conditions, the sheer scale of the Chinese state affords it advantages in the current technological competition. Except during war, the United States cannot match China’s ability to control and concentrate resources for particular national goals at a given juncture. At the moment, state capitalism may have an edge over market capitalism.

While some may doubt the capability of the Chinese state to act effectively, its response to the COVID-19 outbreak, though botched at first, has been impressive. Some analysts suggest that China is now replacing the United States as the voice and standard of purposeful and decisive government.5 Extrapolating from virus-fighting to IT-generating is hardly conclusive, but it may be indicative.

In any case, the race for leadership in Quantum Age technologies, even more than geopolitics, is defining strategic competition between the twenty-first-century superpowers. The contest will affect global economic standing. This could determine which nation predominates in setting the rules of the game, governing international economic institutions and providing the reserve currency of choice – each area being a long-standing US preserve. Yet, owing to Sino-American economic interdependence, the enrichment of one from innovation does not mean the impoverishment of the other. Quite the contrary: Chinese and US GDP growth have strongly correlated for the past 40 years, and there is no reason to expect that relative technological advancement will change this.

When it comes to the military implications of the high-tech race, however, one side’s gain is clearly the other’s loss. Like a spider and a scorpion, the United States and China are engaged in a dangerous dance for supremacy in the Western Pacific. Relying on advanced missiles, quiet submarines and extended-range sensors, the Chinese are steadily improving their capabilities to place US forces at risk in waters they consider legally theirs, or at least within their rightful sphere of influence. In response, the US intends to move towards more distributed, sub-surface and autonomous platforms with stand-off weapons, and it is developing means to disable the C4ISR China relies on to target US forces. Although the two countries have refrained from outright cyber war against each other, this mutual restraint could fracture in a crisis or conflict.

AI could upset the military status quo and even decide the outcome of actual hostilities. It will allow better integration of distributed forces; the fusing and use of data from disparate sensors; faster and smarter tactical decision-making; employment of assorted autonomous war-fighting platforms; and improved offensive cyber-war capabilities. Exploiting AI-enabled command and control, the US military is now fashioning fighting concepts that unify not only the operations of all services but also those in all domains (land, sea, air, cyber and space). For their part, the Chinese have adopted the goal of military transformation based on ‘intelligent technology’. AI might not only tilt the operational military balance one way or the other, but also precipitate crisis instability by increasing the advantages of striking first and thus the temptation to do so. Quantum computing can, at the very least, decide which side has more secure communications and is better at cyber war, possibly making it more likely.6

Why are these military implications of Sino-American technological rivalry so important? Firstly, the military effects of new technologies could favour China by allowing it to capitalise on its inherent advantage of geographic proximity in the Western Pacific. Thus, the technology race could make the region more hazardous for US forces. Secondly, because that is the world’s most productive region, US economic interests would be in jeopardy if it were to fall under China’s sway, which is what the Chinese plainly intend. Thirdly, Japan and other US allies in the region could go their own way or edge towards China if doubts grow about the ability and will of the United States to defend them. In sum, the possible consequences of this rivalry for US interests are immense and durable.

Duelling systems

China and the United States enter this competition with very different political–economic cultures, systems and strategies. The Chinese have evolved what can be called state capitalism, wherein a market economy exists but the state is at the helm. A combination of state-owned enterprises and virtual control over wages, credit, capital accumulation and investment allow Beijing to target technologies, including AI and quantum computing, with public resources; exert influence over key industries; and orchestrate scientific inquiry. The Chinese system is optimised for major national projects and offers large advantages over laissez-faire capitalism, at least in the short term. American strategists would be wise to bear in mind that the Chinese state built a modern, nationwide infrastructure system in a generation.

The United States has eschewed such a large role for the state in the economy, except at times of war or crisis, such as the Depression of the 1930s, the Sputnik shock of the 1950s and the financial meltdown of 2008–09 – and now, possibly, the economic upheaval created by the COVID-19 pandemic. Cherishing their economic freedom as much as their political freedom, most Americans and their elected representatives prefer to let free markets and expected returns attract private capital and fuel innovation. The American knack for entrepreneurial success and concomitant willingness to take risks have enabled the United States to achieve global technological, economic and military supremacy since the Second World War.

Before the Digital Age, the US government had an unusually large role in funding science and technology in order to compete with the Soviet Union militarily and in space. Between 1950 and 1980, the government accounted for roughly twice as much R&D as private industry. Since 1980, though, industry has conducted roughly twice as much R&D as government.7 Competition in digital technologies with Japan (not the Soviet Union) demanded increased US private R&D, and booming revenues from personal computers and consumer electronics met that need. More recently, the fiercest competition has been among US firms – five of the world’s six largest IT firms are American. This has sustained US primacy.

After experimenting in digital networking early on, the US government moved to the sidelines, as the IT industry shaped and chased users’ demands for connectivity in the form of email, the World Wide Web and cellular telephony. That industry has stoutly opposed government meddling, claiming that the internet exists because of government’s passivity and not in spite of it.

Now that China is all-in for technological competition, both the presumption of American primacy and the proper roles of US government and industry are open to debate. For all the deficiencies of Chinese state capitalism, as seen by Americans, it could prove better at generating new technology, at least in the near to middle term – say, a decade. In fact, it has substantially enabled China to close the gap, even if imitating and stealing US technology has also helped. Again, the belief here is that whether the United States retains its lead depends on its response.

Neither the American IT industry nor the US government will be able to retain that lead on its own. A critical question, then, is what sort of public–private undertaking is needed to counter China’s essentially public effort. A stark US division of labour would fail: success depends on combined effort. Yet the US government and high-tech industry have grown apart. The latter, which is the prime mover of US innovation, is motivated far more by satisfying shareholders than by international rivalry, and it is not accustomed to saluting government directives, especially when it comes to investment in technology.

The big split

With the coming of the Digital Age, what had been an amalgam of defence–aerospace and IT industries split and went their separate ways. The latter – including IBM, AT&T and Unisys – wound down or shed their specialised federal ‘systems’ work in favour of larger, faster-growing and more lucrative computer-cum-telecommunications markets. Doing government business, with its separate accounting, rigid regulations and phalanxes of contract lawyers, was like dragging anchor. Swelling cohorts of information-science graduates chose exciting IT companies over dull government agencies and contractors, leading to divergent cultures. Start-ups saw their future in commercial markets. As giants Microsoft, Apple, Google and Amazon came on the scene, they largely ignored specialised military business.

At the same time, major defence contractors such as Lockheed, Martin Marietta, Northrop, Grumman, Raytheon and United Technologies, after dabbling in commercial IT, chose instead to concentrate and consolidate into ‘lead systems integrators’ (LSIs), organised and staffed to perform government work. In time, they shifted from creating technology to managing complex defence and other federal production programmes – ships, planes, missiles and satellites. As technology advanced, LSIs counted on subcontractors to furnish it. While IT companies develop technology in light of their reading of dynamic market demands, LSIs are geared to meeting rigid specifications of particular government customers. The former rewards risk-taking, which is essential to technological progress, while the latter discourages it in order to placate nervous bureaucrats. Moreover, with an essentially captive market, managed competition, multiyear contracts and government interest in maintaining LSI capacity, these firms have little incentive to innovate. The IT industry is always on the lookout for big discontinuities, whereas LSIs are predisposed towards incremental enhancements, at most. Because of the IT–LSI split, government agencies, including the military, lagged behind private entities in using digital technology. The split has also impeded the flow of technology between the private and public sectors.

With IT and defence industries going their separate ways, the former became the epicentre of US technological power. Size matters: today, Amazon, Google, Microsoft and Apple, with combined market capitalisation reaching $4 trillion, invest about $63bn in R&D. LSIs including United Technologies, Lockheed Martin, Raytheon and Northrop Grumman, with combined market capitalisation of about $300bn, put about $5bn into R&D.8 LSIs depend heavily on government funding for it; IT firms do not. Furthermore, LSIs have been putting substantial portions of their profits into stock buy-backs in order to buoy share prices, instead of investing them. The so-called Revolution in Military Affairs was an epiphany for military planners and commanders, who saw that, in addition to minimising casualties, superior use of information was the key to victory. When US military and intelligence services eventually entered the Digital Age, they attained superiority over Soviet forces, victory in the Gulf War and surgical intervention in the Balkans. Looking ahead, it is worth remembering that advances in IT, usually owing to private-sector investment and innovation, can yield stunning military results.


Americans owe a great deal to technologies developed by the federal government and then spun off for civilian use. These include satellites, radar, analogue computers, microelectronics and the Global Positioning System. Most such spin-off technologies originated at a time when federal R&D investment, necessitated by the Cold War, averaged twice that of industry. Civilian demands for satellites, sensors, navigation and the like lagged behind those of the Pentagon, NASA and the intelligence community. Moreover, because many large technology companies were then active in both federal and private markets, spin-off could occur within firms.

With the advent of digital technologies, the prevailing direction of spin reversed from off to on. Cellular telephony, packet-switching, fibre optics, microprocessors, memory chips, remote imaging, data networking and other innovations were mainly responses to private needs and wants, from consumer masses to multinational corporations. Again, these markets both demanded and supported growing private R&D. Industry’s R&D as a share of GDP has risen since 1980 from roughly 1% to 2%; federal R&D as a share of GDP has declined from roughly 1% to 0.5%. Individual IT firms out-invest LSIs in R&D by a growing margin. For instance, Microsoft’s annual R&D spending rose from $6bn in 2006 to $17bn in 2019; during that same period, Lockheed Martin’s R&D spending rose from $0.6bn to $1.3bn.9

Meanwhile, interest in making US military operations both more distributed and more integrated (that is, joint) has increased demand for data and the technologies that gather, share and manage it. While IT has mainly enhanced C4ISR, IT also comprises a growing share of the cost of weapons systems’ capabilities: an estimated 60% of the cost of the F-22 Raptor fighter aircraft is for IT. Because the defence industry itself spawns little IT, most is adapted from private industry. Spin-on is largely responsible for the US military’s transformation from set-piece to dynamic and networked capabilities.

To illustrate, in the 1980s, US telecommunications companies invested in extensive data-distribution systems and transmission media involving satellites and fibre optics, mainly to meet the needs of large multinational companies with far-flung activities – banks, manufacturers and the like. A global grid developed, enabling corporate operations as well as the Web and the internet. The US military was not yet acquiring such services, but it was increasingly aware of the advantages afforded by networked operations, such as those on display in the Gulf War. Thereafter, by borrowing technology and infrastructure developed for commercial uses, US military superiority grew steadily.

Even then, though, spin-on happened mainly by osmosis as opposed to focused and purposeful national policy. It took years for laptops and smartphones to find their way from consumer to soldier, and this happened largely because soldiers were also consumers. Part of the problem was and remains the fact that the defence-acquisition system is draped in regulations and depends on specifications that are inflexible, if not outdated. Soldiers who wanted handheld devices could not get them. Digital spin-on may have been inexorable, but it has also been slow. This was good enough against a failing superpower and the likes of Iraq, Serbia and the Taliban. It is not good enough against China.

Spin-on will remain the dominant paradigm in the Quantum Age. AI is thus far being driven and funded by civilian demand, notably for autonomous cars and sensory recognition. Because it can get to market quickly and is continuously progressing, AI development is not confined to big IT firms; much of it is achieved by small, spunky ventures. Quantum-computing research is centred in very big IT firms – Google and IBM are in a race of their own – and leading universities. R&D for both technologies is funded by private markets and venture capital. US competition with China must capitalise on this reality.

Government’s role

Whither government? Start with R&D. Out of concern about China, various American luminaries, including the former chairman of Google and four former US secretaries of defense, have called for the expansion of federal R&D spending. The current US administration is proposing an increase in federal R&D for AI to about $1bn a year, which would still rank behind Google, Amazon, Microsoft, Facebook and Apple. Government-funded quantum-computing research is a tiny fraction of what Google and IBM spend. One particularly compelling case for public R&D, of significance in competition with China, concerns advances in integrated-circuit (chip) capacity, given that chip design for private customers sacrifices gains in capacity for increased specialisation. More fundamentally, private-sector R&D cannot be expected to meet unique military and intelligence needs unless commissioned by government.

Although industry’s share of US R&D will remain much larger than government’s share, military competition with China justifies significant expansion of the latter, especially in AI, quantum computing and other post-digital technologies. If the federal government restored R&D funding to its historical average of 1% of GDP, an additional $100bn would be available. Several mechanisms and budgets are available to this end, the most notable being Pentagon and intelligence-community R&D contracts and work at national laboratories. It is especially critical that private-sector high-tech firms of every size be incentivised to seek and perform federal R&D.

In addition to increasing funding, it is important for government to take the right approach to awarding federal R&D funds. Keep in mind that private high-tech development typically results from the interplay of scientific inquiry and market demand, rather than meeting the known requirements of a given customer. Emulating this model, R&D for the armed forces, intelligence services and other agencies must transcend existing specifications for platforms or products under contract. The right approach is to energise military and other government planners to engage in free-form thinking about the challenges they expect to face, such as those posed by China. This would lead to fresh concept development for refining such challenges and devising alternative ways of meeting them.

In turn, government planners should have direct dialogue with IT firms on how technology might apply to new concepts. For example, military and intelligence analysts could seek ideas on how to counter Chinese quantum computing for decryption. As things stand, federal acquisition regulations are not conducive to informal exchanges between government planners and corporate technologists. So any plan to expand public-sector R&D should include flexible procedures to encourage dialogue. It is also essential to school officers and officials in emerging technologies.

Other than modestly increasing R&D, various federal initiatives have arisen to improve competitiveness with China. Not all of them are useful. The White House recently issued an executive order noting, accurately if redundantly, that ‘continued American leadership in AI is of paramount importance to maintaining the economic and national security of the United States’. The document called for ‘unleashing’ federal AI resources, removing barriers to AI innovation, providing AI-based education and fostering international cooperation.10 Predictably, an AI summit was held, and a federal AI inter-agency committee was formed.

Furthermore, prestigious outside groups, such as the Council on Foreign Relations, have proposed that the government launch a concerted ‘moon shot’ type of approach, and have prescribed roles and tasks for the departments of defense, state, commerce, energy and the treasury as well as other agencies. There are calls for appointing a federal ‘AI tsar’. (How lucky we are that there was no internet tsar!) New Tech does not need to be organised, much less managed, by government through some sort of Manhattan Project. Federal look-busy proposals and activities ignore the fact that the most important innovations in AI, quantum computing and the like have arisen in an unfettered market, whether from the titans of IT; from smaller, venture-capitalised, high-tech firms; or from young wizards in the proverbial garage. In a nutshell, if the US government does not induce innovative private firms to work for it, China’s state capitalism could win.

Facilitating spin-on

Additional federal R&D is necessary but insufficient to outperform China in the Quantum Age. The most important step government can take is to open its markets for goods and services to private high-tech enterprises, thus tapping into the forces and partaking of the fruits of innovation to the benefit of national security. Government must strategically and systematically address the obstacles and aversion of high-tech companies to federal business.

As in the Digital Age, the United States’ ability to compete with China depends on spin-on – in effect, a private–public strategy. However, given China’s technological and military challenge, spin-on is no longer merely desirable: it is essential. It would be a costly mistake to assume that Adam Smith’s invisible hand will eventually drive spin-on sufficiently to deliver US success against China. Osmosis is not enough. The gulf between the Washington Beltway and Silicon Valley is not just 3,000 miles; it includes divergent cultures, business models and shareholder expectations.

The Obama administration tried to build a bridge across this chasm, establishing the Defense Innovation Unit at the Pentagon and heralding the reform of the Defense Department’s acquisition system. A few IT companies are vying selectively for government business based on their commercial offerings: Microsoft won a $10bn Defense Department contract for a cloud program, and may end up sharing it with Amazon. Still, the federal acquisition regulations impede and deter innovative small and medium-sized high-tech ventures from doing business with the federal government. On balance, the record of federal acquisition reform is one of bold intentions and bad results. Progress has been glacial. Any reforms are only work­arounds. The system abides.

Facilitating spin-on of AI, quantum computing and other key technologies will require five measures: continuous top-down engagement; conducive acquisition procedures; alignment with high-tech business models, expected returns and cultures; protection of intellectual property; and productive roles for LSIs – or else bypassing them.

Leading American officials and officers are well aware of the importance of transformative technologies and vigorously support their adoption. The reason, once again, is China. All four service chiefs have offered creative visions for new operating concepts and capabilities that demand new technologies, especially AI. And the traditionally hidebound services are pursuing revolutionary ideas. For instance, the US Navy is developing and intends to deploy large numbers of AI-enabled autonomous (that is, crewless) ships. The Air Force is committed to comprehensive use of open-source software to facilitate the use of AI. The Army is working with universities to design battlefield robots. The Marine Corps plans to integrate AI into its weapons systems. Intelligence agencies are supporting quantum-computing research to improve cryptology. All services see the benefits of AI in joint C4ISR and integrated operations.

Senior officers and policymakers must pay as much attention to how to acquire new technologies as to why to do so. Unfortunately, the private firms that generate these technologies remain generally unenthusiastic about defence, intelligence and other government business, because of red tape, delayed and diminished profits, and the hulking presence of LSIs controlling market access. Helpfully, and hopefully, the Pentagon has promulgated an ‘Adaptive Acquisition Framework’, which prescribes five ways other than the regular process to contract for goods and services. Of increasing popularity and utility is ‘other transaction authority’, which allows the Pentagon to contract with high-tech firms directly rather than making them run the standard procurement gauntlet or subcontract under an LSI.

Notwithstanding such new contracting alternatives, there remains a major obstacle to spin-on. Simply put, high-tech firms do not want government business. One reason is economic. Say a small venture is awarded an R&D contract and successfully adapts a new technology to meet government needs. When the time arrives for scaling up and generating higher revenues, risk-averse mid-level acquisition officers turn to the LSIs on account of their prowess in running large production programmes. This practice strands the firm that developed the technology, or at best forces it to be a subcontractor stuck with diminished profits. Projecting these eventual scenarios for a high-tech firm, venture capitalists would have little incentive to back it. Thus, the firm would have no motivation to pursue federal R&D in the first place.

Ventures and venture capitalists involved in cutting-edge technologies must be able to foresee, with some confidence, early income (for instance, from R&D), profitable and sustained revenue streams (as from production programmes), or high-return exit opportunities (such as being acquired by an LSI). In considering how to ignite spin-on, government officials must be mindful of this high-tech business model and its earnings expectations. Otherwise, the aversion of private firms to federal business will be hard to allay. It would help if acquisition officials were educated in spin-on economics and adapted contracts accordingly.

Another reason high-tech firms are averse to government business is cultural. Tedious, bureaucratic and uninspiring federal work is anathema to such firms and the people they depend on. In addition, some high-tech outfits and their key players are philosophically and politically opposed to furnishing war-fighting capabilities. Such reservations can be especially acute in considering how AI could substitute for humans in life-and-death decision-making. Here too, open dialogue between defence planners and private-sector technologists could help the latter appreciate improving national and international security as a noble quest. The rising tech savvy of military officers and others in government makes this a more promising proposition than it might appear.

Protection of intellectual property is a key motivator for competitive high-tech firms and the venture capitalists that support them. It is more important in fast-changing markets, where loss of an edge can be devastating, than in markets that evolve slowly. Yet government still expects firms to relinquish intellectual property as a condition of getting full value from contracts. This may be acceptable to LSIs and other government contractors, but it is a red flag to the companies crucially needed for spin-on. Encouraging the keen interest of private tech firms in government business more than justifies protecting their intellectual property.

If LSIs are not alarmed by the government’s appetite for advanced private-sector technologies, they should be, for they do not generate such technologies themselves. Military value is shifting inexorably from platforms (an LSI strength) to technology (an LSI deficiency). If they stand pat, LSIs could end up limiting themselves to making shells for others’ high-end hardware and software. They could try, using their political and bureaucratic clout, to prevent spin-on; but that would harm national security, not to mention putting them at loggerheads with top brass. Or they could become conduits for federal customers to gain better access to new technologies by signing up high-tech companies as subcontractors; but again, this could deprive those companies of sufficient profits, as well as deny government clients the benefit of direct interaction with the sharpest technologists. If LSIs adopted such practices, high-tech firms, already hesitant about government business, would likely shun subcontracting. Finally, LSIs could acquire promising high-tech firms. While many may be inclined to do so in principle, they would have to be prepared to pay attractive – and perhaps prohibitive – sums.

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The best dispensation is for the Defense Department and other government agencies to steer LSIs towards becoming the partners rather than the overlords of high-tech firms. LSIs will remain important in integrating technology and platforms, and could still serve as intermediaries between high-tech firms and government users to ensure the matching of problem and solution. Moreover, they possess unsurpassed and valuable experience in managing complex production programmes. Because partnering could lead to thinner margins and less control for LSIs, senior government officials must make it clear that this is the role they wish LSIs to assume – for their own good.

Think of a spin-on triangle, with the government, the LSIs and high-tech ventures at the points. The government’s role is not to take control of private-sector technology but instead to facilitate its access. Most importantly, it should remove barriers to spin-on and adapt to how high-tech does business. Successful technological competition with China demands it.


David C. Gompert has served in seven previous U.S. Administrations, including as Principal Deputy Director on National Intelligence (2009-10). He has also been an executive in the information technology industry, published extensively on national security and technology, and served in leadership roles with Damazein portfolio companies