The race for global leadership in artificial intelligence (AI), machine learning (ML), blockchain, cryptocurrency and digital infrastructure – among many other technologies – is well underway. But now, instead of the proverbial two-country races we’re so familiar with, the race has expanded.
It’s now any country’s race. How could this be when the US and China are spending so much money? The metrics have changed. Today it’s about patents and adoption.
There are lots of technologies that attract attention. The world is obsessed with AI/ML, blockchain, cryptocurrency, IOT, big data analytics, cybersecurity, 3-D printing and drones. It’s excited about virtual reality, augmented reality and mixed reality.
Everyone loves talking about driverless cars, ships and planes. While we’re growing increasingly worried about social media and privacy (as we should), we’re still addicted to our ever-more-powerful smartphones. And then there’s The Metaverse.
Artificial Intelligence (AI) & Machine Learning
AI/ML is a huge family of technologies with enormous professional levels. Lest everyone believe the US and China are the only countries investing in AI/ML, there are many countries that have unveiled substantial AI/ML research and development (R&D) strategies including the United Kingdom, Russia, Israel, Japan and France. Singapore, South Korea, Sweden, Taiwan, the UAE and Mexico are also strategically focused on AI/ML. The world is well aware of the application potential of AI/ML. In fact, the global field’s getting crowded.
While blockchain enables cryptocurrency transactions, it’s by no means limited to currency exchanges: blockchain is transactionally agnostic. When we look at the adoption of blockchain, more and more local, regional and national governments are adopting blockchain or approving blockchain investments.
Blockchain is already widely adopted in China and Asia across multiple vertical industries, such as insurance and agriculture. Australia’s “CSIRO’s Data61 has formed a consortium with law firm Herbert Smith Freehills and IBM to build Australia’s first cross-industry, large-scale, digital platform to enable Australian businesses to collaborate using blockchain-based smart legal contracts.”
The European Union (EU) has made blockchain a priority. Other countries are making similar commitments to blockchain, including Dubai, Estonia and Gibraltar, among other government offices and agencies.
As of now, governments cannot control cryptocurrency – though they can – and will – regulate and tax it. More and more businesses are accepting it; many have no choice since competitors are accepting it.
Crypto also provides a safer and cheaper way to transact. Payment system incumbents will eventually champion cryptocurrency. Some countries are “open” to the use of stable-coin cryptocurrencies. The US is “open” (with some yet-to-be-precisely-defined requirements) to the possibilities of cryptocurrency, as are Canada, Australia, the European Union (EU), Finland, Belgium, Switzerland, Malta, Cyprus, Bulgaria, the UK and Germany.
Some countries, like China, Russia, Vietnam, Bolivia, Ecuador and Columbia, have essentially banned Bitcoin and cryptocurrency, though several of these countries have a lot of blockchain and cryptocurrency start-up activity. In short, crypto is almost everywhere. The real race here is about acceptance.
Digital Infrastructure Readiness
In addition to AI/ML, blockchain and cryptocurrency, is a country’s ability to participate in the technology arms race through the readiness of its digital infrastructure. Digital readiness describes the condition of a country’s overall digital infrastructure and its ability to adopt AI/ML, blockchain, cryptocurrency and other emerging digital technologies.
Countries that have well-developed digital infrastructures – such as Sweden and Norway – are able to leverage technologies as long as, of course, they’re inclined to do so. In order for countries to leverage technology they must possess basic and always-improving digital infrastructure capabilities (broadband, cloud, big data, cybersecurity, etc.) because adoption and scalability require a modern digital infrastructure.
The mature countries here include Estonia, Finland, Norway, Denmark, New Zealand, Israel, Canada, Sweden, South Korea, the Netherlands and Singapore. Surprised by the list? (The comparison of this list with the list of military powers is fascinating, and clearly differentiates the military and technology arms races.)
Well, not entirely. Money still drives a lot of the progress, but the nature of technological progress and technology adoption is different from the forces that drive, for example, military arms races, where the metrics – tanks, nuclear warheads, aircraft carriers, etc. — are well-known. While the technology arms race is well underway, “progress” is not defined solely around money. Technological discoveries can come from anywhere, which is why so many countries have entered a race they can actually, maybe, win.
So the US and China are no longer alone. In response to all this competition, the US should – again – take the following steps to remain competitive in the global arms race:
- Individual American states should launch their own technology investment strategies. They should appoint commissions and Chief Digital Technology Officers. The States should aggressively fund emerging technologies, and partner with the federal government where digital intersects with problems all states face, like infrastructure, healthcare and education.
- Private and public universities should be funded by federal and state govern-ments to develop educational programs beyond STEM funding and conduct basic and applied research in AI/ML and other technologies. Block grants to universities should begin immediately.
- Increase R&D tax incentives and credits to companies who invest specifically in emerging technologies.
- The US response to China (and other nations investing heavily in AI/ML and other technologies) should include the expansion of the Office of Scientific & Technology Policy and the creation of major new defense and non-defense programs in AI, machine learning, blockchain, AR, VR, IOT — you name it.
- A national technology Czar should be appointed with broad funding and programmatic authority. The Czar should be a Cabinet-level official which oversees a national research and development program and serve as the principal advisor to the President of the United States and Congress on all aspects of digital technology, as part of a greatly expanded White House Office of Science and Technology Policy.
- Immigration policy regarding H-1B visas for technology professionals should be widened and eased.
I keep writing about this because the technology arms race keeps expanding and accelerating. Many of the recommendations here – as well as two I previously published for the Biden administration – are now more important than ever.
Technology is no longer a two-country race. Smart people everywhere are focusing on the power of emerging digital technology. It’s time to rethink our investment strategy, our partnerships and even our acquisitions — not of countries, but companies, as “M&A” assumes a whole new meaning in this race.