Beijing stopped talking publicly about its “Made in China 2025” plan for technological dominance once the initiative became a sticking point in a costly trade war with the U.S.
But President Xi Jinping’s government has by no means abandoned the goal, the top U.S. trade negotiator says. Growth targets including the ability to supply 80 percent of electric-vehicle demand remain in place, and in January, China became the first country to land a probe on the far side of the moon.
America, despite a resume that includes inventing the airplane and producing the first commercially viable lightbulb, can’t keep its edge against that kind of comprehensive strategy without a comparable effort, business leaders say.
“Innovation Nation,” a broad strategy that emphasizes workforce training and long-term investments in science and technology from the Business Roundtable, is a possible answer. It was mapped out in coordination with executives from member companies, which are the 200 largest in the U.S.
“During the Cold War, the U.S. had a national strategy for innovation — one that put a man on the moon, created the Internet and the modern computing industry, and established the U.S. as the global leader in the development of cutting-edge technologies for several decades,” the organization said in a document outlining its initiative.
The government has since grown complacent, however, with tight budgets delaying critical investments. More than half of all patents filed in the Patent and Trademark Office come from outside the country, the organization says, while counterfeit goods, software piracy, and theft of trade secrets cost the U.S. economy as much as $600 billion a year.
“People are trying to tackle this in a very piecemeal, narrow way,” Denise Zheng, the organization’s vice president of innovation, told the Washington Examiner. “We have put together a cross-cutting, comprehensive agenda that lays out a road map for sustained U.S. leadership.”
The plan includes removing roadblocks to innovation, in part through eliminating outdated regulations — a centerpiece of President Trump’s agenda in the past two years and one that he highlighted in his State of the Union speech — better positioning the country to compete against other nations and making sure the benefits of technological progress reach all parts of society rather than just a few groups.
Some portions, such as regulation changes, may be accomplished through executive orders. Others would require legislation — a far greater challenge, particularly with a divided Congress — so the Roundtable is focusing on proposals that have bipartisan support, such as a federal data-privacy law.
High-profile data breaches include the theft of identification data for nearly half the country from credit bureau Equifax in 2017 and the disclosure that a consultant on President Trump’s 2016 campaign improperly accessed information for 87 million Facebook users.
Tech companies largely support the idea of a federal privacy law, having become increasingly worried that a patchwork of state laws, including a new one in California that lets state residents view any data companies hold on them and block the sale of it, will drive up compliance costs and eat into profits.
“Having data stored for long periods of time with companies can not only be an asset in that it can help provide better services, but it could also be a liability, in that there could be breaches or the data could be used in ways that weren’t intended,” Facebook founder Mark Zuckerberg, who has grappled with the issue for the past two years, said in late January. “That would be good for people everywhere to make sure that basically every person who uses an Internet service has the same protections no matter where they live.”
Helping American firms thrive against global rivals, another of the Roundtable’s priorities, requires addressing unfair trade practices, such as China forcing executives to share their technology with state-owned companies as a condition of doing business in the world’s second-largest economy.
That and limited access to the country’s markets are issues the Trump administration has sought to address by imposing tariffs on $250 billion of Chinese goods. That prompted immediate retaliation, and in November, Trump and President Xi Jinping agreed to a three-month truce, ending on March 1, in which both sides would attempt to negotiate a comprehensive trade agreement.
If they don’t, Trump has already threatened to more than double duties on $200 billion of Chinese goods to 25 percent while adding levies to the country’s remaining $267 billion in shipments to the U.S.
“We are now making it clear to China that after years of targeting our industries, and stealing our intellectual property, the theft of American jobs and wealth has come to an end,” Trump said. Any new agreement, he added, “must include real, structural change to end unfair trade practices, reduce our chronic trade deficit, and protect American jobs.”
Among the most crucial parts of fostering innovation may be ensuring the benefits are spread equitably, Zheng said. New technology disrupts, whether it’s 18th-century plants reshaping agrarian economies or robots taking the place of human workers on automobile assembly lines today.
A significant body of research and polling data shows that “new technologies create more jobs than they eliminate,” she explained. “They just create different types of jobs. We need to make sure we have a pipeline of workers that have the right skills for these future jobs.”
Accomplishing that will require investment by business and government in training the country’s existing workforce as well as educating children as early as possible in science, technology, engineering, and medicine, she added. “We also need to address potential dislocation.”
