Sep 12, 2022 - Technology

Report: Losing tech race with China could cost U.S. trillions

An image of various components of technology

Image courtesy of Special Competitive Studies Project

The United States could miss out on trillions of dollars in economic growth if it fails to confront the growing technology threat posed by China, according to a new report from the Eric Schmidt-led Special Competitive Studies Project (SCSP).

Why it matters: An American failure to challenge China would not only cost the U.S. economic growth and jobs; it would also let an authoritarian state call the shots for the world's digital infrastructure.

What they're saying: "Imagine a world where China controls the global digital infrastructure, has the dominant position in tech platforms, controls the production of critical tech, and is harnessing biotech and new energy to transform its society, economy, and military," the group said in a statement to Axios. "If we lose in these areas, it will be very hard to regain advantages."

  • From SCSP's perspective, the geopolitical, technological, and ideological futures are all deeply interrelated: "By the end of this decade, we will know if we will live in a world shaped by free expression, tolerance, and self-determination or dictated by censorship and coercion."

Key takeaways:

  • The period between 2025 and 2030 could be critical. "China’s political, economic, demographic, military, and technological calendars align in dangerous ways in the second half of this decade," according to a summary of the report, which noted that Xi’s third term officially ends in 2027.
  • Chips, 5g and AI are among the most important battlegrounds.
  • Recent steps are not enough, despite some progress: "The U.S. government came to the rescue: $52 billion for chips, a diplomatic campaign to thwart Huawei (and) the infusion of millions for AI investments," the summary said. "However, this reactive approach is not a recipe for long-term success."

Yes, but: While the group's 186-page report highlights the risk of China assuming the technological lead, it also outlines what it sees as key steps for averting that fate.

  • Among these are continued military and commercial investment from the government, cooperation with other democracies and striking a balance between regulation and encouraging innovation.

What's next: SCSP is holding a summit of government and tech leaders Friday in Washington, D.C.

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