A new article in Foreign Affairs argues that the United States cannot win the tech race alone and must invest in innovation abroad to keep its edge over China. The article emphasizes the need for a global tech fund that would support critical technology and attract governments, private investors, and consumers around the world to the U.S. technology ecosystem. By investing in technology development abroad, the United States can strengthen its technological ecosystem, build resilient supply chains, and lead the world in future technologies.
The United States and China are currently engaged in a global competition for technological dominance. China has implemented its Made in China 2025 plan and Digital Silk Road initiative to transform itself into a high-tech manufacturing powerhouse and reduce its dependence on foreign technology. The United States aims to accelerate innovation and maintain its lead in artificial intelligence and advanced semiconductors. However, the reliance on subsidies and export controls has risks, such as trade restrictions from China and bureaucratic red tape in the United States.
To succeed in this competition, the article argues that the United States must focus not only on domestic innovation and production but also on global technological ecosystems. Technological competition is not just a race between two countries or two sets of companies, but a complex network of research, development, manufacturing, software, standards, and supply chains. The winning ecosystem will be the one with the most advanced, cost-effective, and reliable capabilities.
The article proposes the establishment of a global tech fund that would support critical technologies and attract global investment to the U.S. technology ecosystem. This fund would operate as an investment fund with an independent, professional team and a self-sustaining structure. It would take on the “tipping point” risk of investments that improve the resilience of U.S. and partner supply chains and support American technologies and related research and development abroad.
The global tech fund would strengthen the U.S. technology ecosystem and build partnerships with other countries, creating win-win relationships. For example, it could support Japanese and Korean companies in adjusting their supply chains to qualify for U.S. subsidies, and collaborate with European companies and governments to invest in European semiconductor supply chains. It could also invest in energy supply chains in Southeast Asia or Latin America and support AI investments in the United Arab Emirates and Saudi Arabia.
The article concludes that the United States needs to go beyond subsidies and market restrictions and invest in critical technology abroad to stay competitive in the global tech race. By doing so, it can build technical capabilities and local capacity in key partner countries and ensure that those countries make technology investments favorable to the United States.