The technology competition between the US and China is often framed as a race where China is trying to catch up, while the US is trying to maintain its lead by using tools, like export control, to keep China behind.
For the first time (and in a coherent, constructive, non-fear-mongering way), the Special Competitive Studies Project (SCSP) via its first major report articulated a view where the US, not China, is the one losing and needs to catch up. It is a refreshingly honest take of what’s happening now and what lays ahead.
The SCSP is led by Eric Schmidt (ex-CEO of Google and Novell) and fashioned itself after the Special Studies Project, a similarly purposed organization led by Henry Kissinger in the 1950s. While the SCSP is a non-profit, not a government policymaking body, it seems to have the “ears” of a bipartisan group of government officials. During its day-long event in Washington, DC last week, dubbed the “Global Emerging Technology Summit”, to launch its report, senators from both parties and a string of senior Biden administration officials spoke to offer support.
As any DC event would go, the presence of senior officials and luminaries (like Kissinger) tend to grab all the attention. But what I found most interesting and useful has nothing to do with the words of high-profile people. Here are my initial reactions and takeaways of both the Summit event and the report itself.
Losing Is An (Winning) Option
Arguably the most useful output is the SCSP’s willingness to “pop the bubble” on American pride when it comes to China. In a Foreign Affairs article by Schimt and Yll Bajraktari (executive director of SCSP), teasing the release of the report, “Losing is an option” is literally the first subsection of the article.
It is a more healthy, grounded, albeit less crowd-pleasing attitude than “murica is #1”, which is fun to yell at a July 4th BBQ, but does not get us anywhere. Whether you are a country, a company, a hedge fund, a sports team, or any group that operates in a competitive situation, you cannot win if you don’t think you can lose.
Knowing that “losing” is an option, if not a distinctly probable outcome, is an integral part of “winning”.
China’s rise has been fueled by its own losing, which lasted for more than a century following multiple centuries of dominance and arrogance beforehand. That shame, insecurity, and forced humility is still what motivates China’s growing competitiveness today, though arrogance is creeping back in with things like “wolf warrior diplomacy”.
In fact, China’s own fall and rise is the perfect cautionary tale for the US. Right now, the US is still long on self-congratulatory pride, short on introspective humility. In his closing remarks at the SCSP event, Schmidt tried his best to “pop the bubble” without making the room feel too awkward. After giving an obligatory praise to the passage of the CHIPS Act, he told his audience that the US’s competitor (read: China) is doing the same “every week in one form or another”.
Even with the CHIPS Act and its headline $50 billion subsidy to support the domestic semiconductor industry, the US is still losing! That deficit is compounded by the reality that once you read the fine prints of the legislation (which I did), you will discover that the real amount is closer to $39.2 billion spread over five years.
If America wants to win, it needs to recognize that it can lose. And the tenor of the SCSP’s report and event is nudging that uncomfortable but necessary recognition along.
How Will America Win?
Assuming America can develop a more honest, less delusional attitude before it is too late, there is a long, daunting list of things it needs to do to actually win, as Schimdt and Bajraktari’s article called out. As with any long to-do list, it is always a good idea to start somewhere to make progress, get help, and gain some confidence, in order to rally more support for the rest of the to-do list.
Here’s how I would begin approaching the SCSP’s massive to-do list for America.
Get Outside Help: South Korea, Taiwan, Israel
America should start by getting “outside help” and feel comfortable emulating elements of industrial policies from allies who’ve done a good job. There is no shame in “copying”. From the agenda of the SCSP’s event, we can glean some hints as to which allies want to help, if America can put its pride aside to learn.
South Korea, Taiwan, and Israel were the three featured foreign governments, who sent senior-level officials to the Summit to offer support. Even though all three official messages were pre-recorded and the content was nothing remarkable, as one would expect, these three allies all have successful track records of implementing industrial policies and punching way above their weight.
Through decades of trial and error, South Korea has managed to boast not just two of the top makers of semiconductors (Samsung and SK Hynix), but also of smartphones, cars, and batteries that go into electric vehicles. Furthermore, these South Korean conglomerates have invested billions of dollars in building manufacturing and R&D facilities all over the US with plans for more. The US can accelerate its own “catching up” by supporting South Korean investments to make sure they are successful and learn from their operational and technical best practices.
Similarly, there are lots of lessons to absorb from the experience of Taiwan and its semiconductor crown jewel, TSMC. Luring TSMC to build new fabs in Arizona is one thing. But on a more strategic level, America should seriously study how the Taiwanese government gave early support for TSMC to get it off the ground – pumping 48% of the needed investment when no one wanted to invest. Learning more from luminaries like TSMC founder Morris Chang would also help; even in his 90s, Chang is articulate, wise, and willing to share, as long as America is willing to listen.
While I’m not as familiar with Israel’s industrial policies as I am of South Korea’s or Taiwan’s, it is a well-known fact in tech that Israel produces some of the best technical talent and deep tech startups, especially in the realm of cybersecurity and infrastructure technology. The Israeli Defense Force, particularly its signals intelligence group Unit 8200, has become a factory of tech entrepreneurs, whose alumnus’ companies rival that of YC.
There is something that America can learn from each of these allies. Better yet, they are willing, if not eager, to help. Why not leverage these partnerships to accelerate progress?
Focus on Frontier Technologies:
One of my favorite parts of the SCSP’s almost 200-page report is Chapter 7, where it lists the six frontier technologies that will shape global competitiveness for the rest of the 21st century:
- AI (particularly GPT-3)
- Compute (specifically quantum)
- Networks (especially cables for 6G)
- Biotechnology (specifically in combination with AI)
- Energy generation and storage (particularly nuclear fission and future)
- Smart manufacturing (especially biomanufacturing)
Even though some of these categories sound like “pie in the sky” concepts, focusing on them now, not later, taps into America’s strengths as a rich economy with vast resources in land, people, money, and thus the capacity to push boundaries of innovation that small countries, like South Korea or Israel, would seldom dare to try.
In my view, America is a bit too obsessed over semiconductors, which is frankly a mature technology of the last century. Instead, issuing a national rallying cry to tackle these frontier technologies – all of which will need more semiconductors anyways – is how America can mobilize its resources and attract talent globally in a way only America can, through inspiration plus immigration. Otherwise, it will suffer from the “big nation version” of the Innovator’s Dilemma.
After more than a century of foreign invasions, civil wars, and “losing”, the so-called Modern China is effectively a 40-plus-year-old startup that began in 1978 with Deng Xiaoping’s “opening and reform”. In my view, the various policy and regulatory crackdowns that China has been implementing in the last few years is simply the “China startup” trying to clean up its startup debt, which every startup accumulates over time.
America is arguably a 240-plus-year-old startup, with its fair share of “startup debt” to clean. However, given its runaway success, it is operating more like an incumbent. If America really wants to win, it needs to function more like a startup. And to do so, it will need to focus on the frontier – the future – right now.
(Disclaimer: a few months ago, members of the SCSP research staff reached out to me for my opinion on a variety of topics related to US-China. So, technically, I played a tiny part in contributing to the report and was recognized as such. I found the research staff open-minded, genuine, and intellectually curious, and I very much enjoyed my interaction to support their efforts.)
(本篇中文版文章是读者 Ben Yu 做的编译，我做了一些修改后发表。非常感谢Ben的贡献！)
然而， 美国智库“特殊竞争研究项目”（the Special Competitive Studies Project，SCSP）在它出版的首份报告中，客观地提出一个新观点：在某些技术领域，美国才是需要追赶的那一方。
SCSP 由 Eric Schmidt（前谷歌和 Novell 的CEO）领导的、一个两党合作的非盈利项目。它定义自己的使命是“通过新兴技术加强美国的长期竞争力”。SCSP 对于两党来说都是值得关注的声音，上周在华盛顿特区举办的“全球新兴技术峰会上”，两党的参议员和拜登政府的要员都表示支持 SCSP 和它编写的报告。
最有价值的部分是 SCSP 在有关中国的问题上竭力“戳破泡沫”。在一篇由 Schimt 和 Yll Bajraktari（SCSP 的执行董事）撰写的文章中（在《外交事务》杂志出版），第一部分的标题就是“Losing is an option”（失败是一种选择）。
尽管没有“Murica is # 1”那么讨人喜欢，但这是一种更积极的应对心理。无论是国家、公司、对冲基金还是球队，如果心态上认为自己不会输，那就不可能一直赢。要想赢，就要首先承认，自己有可能输。
这种经历对于美国来说也是一种前车之鉴，毕竟美国在近代一直处于全球领先地位，给很多人留下傲慢的印象。在 SCSP 的闭幕词中，Schmidt 用温和的方式，努力戳破幻想泡沫。一个例子是，Schmidt 在赞扬美国通过 CHIPS 法案后告诉听众，在中国这种鼓励行业发展的法案几乎每周都有。
换句话说，美国即使有 CHIPS 法案和 500 亿美元的补贴来支持半导体产业，依然没有胜算。更何况实际金额不是 500 亿美元，而是 5 年内分摊 392 亿美元。
对于美国来说，有了这种更健康的心态后，想要保持自己的竞争地位，就像 Schimdt 和 Bajraktari 在文章里写的一样，还有很多（很多）事情需要做。就像任何一个长串的待办清单一样，从某个小地方开始取得进展来获得信心是比较好的选择，以便让这个清单上的其余部分得到更多的支持。
下面是我基于 SCSP 整理的一些待办重点：
对美国来说，最首要的是从获得盟友的帮助开始，盟友可能已经有自己的优势产业（例如韩国的半导体产业），美国从中学习是更好的选择，而不是傲慢地自己从零开始。从 SCSP 活动的议程中可以看到有那些盟友愿意提供帮助。
和韩国类似，中国台湾在半导体行业也有台积电这样的实践经验，同样值得学习。吸引台积电在亚利桑那州建立新的工厂是一种策略，但在更具战略性的层面上，美国应该认真研究台湾政府在早期是如何在没有人愿意投资的情况下，抽出所需投资的 48% 帮助半导体产业实现从 0 到 1 的发展。台积电的创始人张忠谋的分享也非常有价值，虽然他已经 90 多岁了，但依然思维活跃，愿意分享自己的想法。
在 SCSP 近 200 页的报告中，我最喜欢的部分之一是第 7 章，其中列出了在 21 世纪最有可能建立全球竞争力的 6 项前沿技术：
- AI（尤其是 GPT-3）
- 网络（尤其是 6G 电缆）
在经历了一个多世纪的外国侵略、内战和失败后，以 1978 年邓小平提出改革开放作为一个里程碑，现代的中国更像一家 40 多岁的初创企业。在我看来，中国在过去几年实施的各种政策和监管打击，只不过是这家初创企业试图清理自己的创业带来的债务，而这些债务是每家初创企业随着发展的时间都会积累起来的。
美国则是一家有 240 多年历史的初创企业，当然也有很多创业债需要清理和偿还，但过去的成功可能会让美国忽略掉这些债务的存在。美国在心态上需要有些根本的改变才能应对接下来的国际竞争，像初创企业一样关注未来市场是最重要的一点。