A New Compact for America: Tech Takes Center Stage in the Global Competitiveness Arena

Session Overview

With the multiple converging technology revolutions that have reshaped the world order, the United States now faces unprecedented challenges to its economic competitiveness and geopolitical leadership. The pressure is intensifying as geostrategic rivals aggressively work to gain superiority in key future technologies. To set the global pace of tech-based innovation, the United States must rethink its defense industrial base while continuing to innovate in the private sector with agility and at scale. In this panel, leaders discussed the crucial steps America must take to continue to lead in several crucial areas of technology, highlighting the upcoming “Compact for America” from the Council’s Technology Leadership and Strategy Initiative (TLSI).

Key Session Insights

Reflecting on the recent 15-year anniversary of the Council's Technology Leadership and Strategy Initiative (TLSI), Chad Evans, Executive Vice President and Chief Operating Officer of the Council on Competitiveness, remarked, “The only constant since the TLSI's inception has been the rapid pace of change.”

The TLSI brings together CTOs, deputy directors of U.S. Department of Energy National Laboratories, and vice chancellors of university research, all committed to fostering investments in technology, infrastructure, and talent essential for a robust innovation economy. Joining Mr. Evans on stage were the three cochairs of the TLSI, along with three additional leaders from the science and technology sector, to address the tumultuous landscape of discontinuity and disruption that has led to increased challenges and turbulence for U.S. innovators.

Dr. Steve Walker, Vice President and Chief Technology Officer of Lockheed Martin, views the rapid change and turbulence as a significant source of opportunity. He asserts that the American innovation ecosystem—which includes industry, universities, and national laboratories—is the strongest in the world but often underutilized. Walker notes if innovators remain entrenched in their silos, national innovation capacity will not grow in the manner necessary to compete in the 21^st century.

Drawing from his experiences at Lockheed Martin, Dr. Walker discussed how partnerships have evolved to integrate cutting-edge technology into the defense sector. While Lockheed Martin is well-known for its advancements in weaponry, such as stealth aviation and directed energy, the company is also a leader in applying dual-use technologies like machine learning and AI in defense. However, just a decade ago, leading tech firms such as Google, IBM, and Microsoft were hesitant to engage directly with the defense sector. Today, however, these companies are actively forming partnerships with Lockheed Martin and the Department of Defense to develop next-generation systems for national security applications.

The Hon. Patricia Falcone, Deputy Director for Science and Technology at Lawrence Livermore National Laboratory, then expressed concern that cultural differences could hinder the formation of partnerships. She noted various organizations, such as universities and national laboratories focused on national security, often operate under distinct value systems, which can create friction between them.

In contrast, Sally Morton, Executive Vice President for Knowledge Enterprise at Arizona State University, suggested the current turbulence in the academic sector could drive necessary change. She recognized the education sector has a unique opportunity to enhance the value of education across all levels—from K-12 to community colleges to research universities—making its contributions more evident during a time when higher education faces increasing scrutiny over its economic value to students.

Dr. Jefferey Rhoads, Vice President for Research at the University of Notre Dame, concurred this is a critical moment for universities to demonstrate their value. The importance of seeking deeper partnerships will be critical not only to achieve this goal, but also for the United States to remain competitive. Dr. Rhoads noted the American free-market innovation ecosystem often struggles to compete with vertically integrated innovation systems employed by global competitors, and to compete, universities—and other institutions within the innovation enterprise—must focus on their areas of excellence rather than attempting to lead across all domains.

When asked about the perspective of the Advanced Research Projects Agencies, Dr. Evelyn Wang, Director of the Advanced Research Projects Agency–Energy (ARPA-E), said one of the most significant roles of public research organizations is to serve as conveners within the diverse innovation ecosystem. With a mission to advance new energy technologies for the American energy market, collaboration is essential for success. Dr. Wang stated it is insufficient to merely fund projects that generate innovative technologies; her agency must also facilitate their integration into the broader energy ecosystem.

By maintaining a dedicated team of experts focused on identifying commercialization opportunities, ARPA-E collaborates with industry, academia, and investors to identify and overcome barriers to technology implementation—challenges that none of these groups could tackle on their own. The recognition of the power of such partnerships has enhanced the capacity of federal research organizations to thrive amidst current innovation turbulence.

In contrast, Dr. Richard Muller, Director of the Intelligence Advanced Research Projects Agency (IARPA), acknowledged broad partnerships and ecosystem-building initiatives can be effective; however, this approach would be less practical for IARPA due to its focus on serving the intelligence community. As Muller explained, “The intelligence community wants five items of something that you're developing, and they want to own all five of them.” Nevertheless, he expressed optimism that new models for using dual-use information technology—especially from emerging defense contractors like Anduril and Palantir—might pave the way for innovative partnerships. He hopes these companies will create new “rungs on the ladder” to help transition information technologies developed by IARPA into viable products for the intelligence community and for commercial use.

When asked about what one or two technologies the United States most critically needed to set the global pace, Dr. Wang made clear emerging energy technologies were crucial. In her words, “energy is prosperity;” more efficient and expanded energy production are the cornerstone of U.S. economic strength and resiliency. With continuously growing demand sparked by the growth of AI and the electrification of vehicles, the need for more abundant and efficient energy generation is greater than ever. For Dr. Wang, this meant the exploration of new viable energy technologies was of paramount importance.

Small modular nuclear reactors (SMRs) show great promise, but are still nascent. And while nuclear fusion holds tremendous promise and potential, she argued the technology remains at least a decade out from implementation. Work is also being done on underground hydrogen capture, but any of these new techniques for clean and abundant energy generation will require the collaboration of universities, national laboratories, research agencies, and industry to be taken from idea to implementation.

For Dr. Muller, the world faces a new Sputnik moment driven by the sudden advancement of AI, kicking off a race toward greater AI capabilities that, according to him, the United States absolutely must win. AI has both offensive and defensive security implications the United States needs to both understand and leverage, lest it be caught off guard by rivals like China seeking to do so. Beyond software, he called for a greater emphasis on creating the physical hardware like GPUs and CPUs that make up the “brain” of AI systems, as well as on integrating sensors and other inputs that allow AI systems to absorb and process information in useful ways. Dr. Muller believes the United States must build AI capabilities while being judicious and watchful about the potential harms and threats they can present to security.

When asked to comment on the most important emerging technology, Dr. Falcone pointed to the important role that materials science would play in future development. AI is being used to hunt for new molecules with useful properties, and new techniques like biomanufacturing and additive manufacturing are creating opportunities for innovative new products.

Dr. Morton, by contrast, argued she did not have an answer, and that trying to define what one or two new innovations were the most crucial may be counterproductive. Rather than trying to predict the future, we would be better served by building environments that allows new ideas in all fields to germinate and develop.

Dr. Rhoads echoed the idea, stating the way we approach technological innovation as a whole should be the focus. Building on that idea, he commented that U.S. leadership in technology is important, but equally so in technology ethics.

Dr. Walker pointed to the need to develop policy around the deployment of new technologies. For example, AI technologies have outpaced the policies designed to manage them, so the policy needs to catch up to reality. He pointed to how Lockheed Martin recently began deploying AI systems to help protect sailors on deployed U.S. Navy warships in the Red Sea, one of the most hazardous sea environments today. While an exciting moment for the deployment of AI, it also presents risks as Lockheed Martin and defense planners work to figure out what policies are needed to keep an AI system functional for the servicemembers using them.

While progress on cutting-edge technologies is important, so is expanding the innovation economy to more people and places. Mr. Evans pointed out that given the fault lines growing ever more apparent in American society, the need to reknit the nation’s economy to not be so dependent on one or two clusters of innovation is more important than ever.

Dr. Rhoads, noting the power of universities to be a hub of innovation in a region, gave the example of a Notre Dame partnership with the Lily Endowment Foundation. Northern Indiana is a per capita leader in manufacturing jobs, but many small and medium sized manufacturers still operate with 1950s era techniques, hampering the competitiveness. Through this partnership, Notre Dame was able to bring new technologies like AI into these smaller manufacturers, boosting their productivity and ensuring that new technologies are a benefit to small business, rather than something to fear.

Dr. Morton, who lives in the center of the booming Phoenix semiconductor industry, has seen the rise of massive fabrication facilities across Arizona. However, rather than being content with just manufacturing microelectronics, she and other leaders in Arizona innovation are working to build a holistic “labs to fabs” pipeline that encompasses the entire semiconductor ecosystem.

Dr. Morton has worked closely with industry and educators at all levels to design an education system that could create the skilled workforce needed for the semiconductor industry. By translating industry workforce needs into education plans at the K-12, college and PhD levels, educators can ensure students graduate with the skills they need for employment at these fabs. Alongside workforce development, integrating small companies and startups into the ecosystem is crucial for its development. Given the intensely expensive nature of the semiconductor industry, startups can face extreme difficulty. ASU has partnered, for example, with Applied Materials to create a lab space where startups can use advanced tooling to try new ideas, giving a much-needed boost to these small firms where new ideas can easily germinate.

For Lockheed Martin, with 120,000 employees, their focus is primarily centered on where their employees are, according to Dr. Walker. For example, a large employee count in Colorado led to them joining the Colorado-Wyoming Climate Resilience Engine, expanding a stream of business and innovation for the company. But Lockheed Martin has also begun to focus on international place making. Lockheed Martin has set up locations around the world, especially in Eastern Europe, where they are helping to build local capability in order to make the global defense industrial chain more resilient. Even with more than 20,000 suppliers, Lockheed Martin is still seeking to diversify its supply base. The strength of the U.S. national security system, and its global network of allies, allows it to serve as a catalyst for innovation place-making that improves security at home and abroad.

Lawrence Livermore National Laboratory, as Dr. Falcone explained, sits in between the Silicon Valley and Central Valley of California, two vastly different regions in terms of economic outlooks and job opportunities. That central location has led to the laboratory extending partnerships in both directions, with university, corporate and local governments that seek to bridge the gap between the two and open new opportunities. In one example, she highlighted a program that has sought to use the sensors in students’ smartphones to replace the physics laboratory equipment that many rural schools did not have access to, paving the way for education at community colleges and universities in the region.

Despite its intimate connection to the intelligence community, Dr. Muller explained the vast majority of the work that IARPA does is unclassified. This is so the agency can seek out the best minds to solve a problem, no matter where they are located, even abroad. By casting a wide net, IARPA has the power to work with small businesses, sometimes with only one employee, and invest in them to build ecosystems without having to worry about running afoul of classification requirements. Therefore, despite its limited budget and at-first-glance restrictive mission, IARPA is capable of standing up new ecosystems across the country.

Dr. Wang touched on the fact that, at ARPA-E, external innovators from universities, national laboratories, and startups lead most projects – leaving these stakeholders and projects deeply embedded in all parts of the innovation ecosystem. This wide reach gives ARPA-E the ability to bring in fresh talent and ideas from outside. Two programs have been established with that specific goal in mind, one granting funding to newly-minted PhDs, along with the chance to move to D.C. and learn how to navigate the federal government, as well as another focused on bringing in talent from minority-serving institutions that may not have the same tools as those attending top universities.

To conclude, Mr. Evans asked the three TLSI co-chairs to preview what would be coming in the upcoming “Compact for America,” releasing in 2025. Dr. Walker noted the importance of bridging the infamous “valley of death,” and remained hopeful the incoming administration would be proactive in creating mechanisms to do so. He also expressed the need for greater partnership between the DoD and defense contractors, using the growing number of people interested in working on defense-related applications to enhance efficiency. Dr. Morton identified investment as one of the biggest hurdles, challenging participants to be ambassadors for the message of sustained federal investment. She also renewed emphasis on people – noting how, in her engagements with industry, talent is often their biggest concern. Finally, Dr. Falcone offered the model of resources, people, and connections as the three big “buckets” needed in order to build a sustainable innovation ecosystem.