Pillar 5 Overview
As technology advances more rapidly each year, and as global competitors develop and scale technologies at blistering speeds, the United States must accelerate innovation through the deployment of cutting-edge technologies across all sectors of the economy. Business, government, academia, and national laboratories must be empowered to move faster to test, prove, and scale innovations to ensure every sector of the U.S. economy is operating with the most advanced products, services, and technical solutions.
There are six key Pillar 5 topics of competitiveness, under which we have identified eight specific recommendations. The six topics include:
Advances in technology are accelerating, technology-driven opportunities for innovation are expanding, and AI is already demonstrating it can shave years off of new materials and drug development. In addition, the United States is building new microelectronics manufacturing facilities, deploying new renewable energy power generation, and seeking to repatriate critical goods manufacturing. These activities are often subject to extensive regulatory review and permitting regimes. Regulation, permitting, and licensing need to move faster with the pace of technological change and innovation.
This includes:
Artificial intelligence will certainly converge with other technologies and fields, such as quantum, autonomous systems and robotics, digital devices of all sorts, logistic engineering, digital health, learning systems, business management, security, and smart homes and cities. Biotechnology is converging with computing, energy, electronics, personalized medicine and precision therapies, sensors, and new materials development. AR/VR is converging with communications, entertainment, gaming, learning, and training; animal science with engineering in biomimetics; ecology and economics; and more. Fields that could converge to meet the challenges of an aging society are as diverse as gerontology, nutrition, psychology, physical therapy, architecture, and home design.
The opportunities for innovation at the intersection of disciplines and in the convergence of technologies and fields are almost unimaginable. Of particular promise, the convergence of AI with other fields—across the sciences and engineering—holds enormous potential for opening a new age of discovery and innovation frontiers, creating significant economic benefits, strengthening national security, and driving productivity gains.
The federal government supports a vast constellation of research, development, and testing laboratories. These span a wide range of science and technology capabilities, including basic physical science, health care, military systems, transportation, space exploration, agriculture, industrial standards, energy, the environment, and more. Prominent among these are the 17 National Laboratories of the U.S. Department of Energy, considered a distinctive U.S. competitive asset. These laboratories, including 28 user facilities, possess unique instruments and research facilities used by tens of thousands of researchers. They address large-scale, complex research and development challenges with a multidisciplinary approach that places an emphasis on translating basic science to innovation. While these national laboratories focus on advancing their government missions, they also transfer technologies they develop to the private sector through patenting and licensing, and they partner with companies in areas of mutual interest under cooperative research and development agreements.
Future U.S. competitiveness will depend on the success of U.S. innovators developing, scaling, and deploying new product and process technologies at speed. However, for those products and processes to reach and compete in high technology markets, additional research and development is often needed to scale concepts from benchtop implementations to full-scale production. Providing support, both facilities and personnel, from the national laboratories to validate, scale, and advance new technologies with industry partners will help accelerate innovation in the United States. Similarly, partnerships between universities, the Nation’s array of manufacturing institutes, and national laboratories offer the ability to advance the Technology Readiness Levels (TRL) of and de-risk a wide variety of technologies at an accelerated pace, increasing their readiness for private sector application, development, and commercialization, and accelerating their time-to-market.
U.S. defense capabilities are being reshaped by game-changing dual-use technologies and the new military concepts these technologies enable. However, leadership in many of these dual-use technologies is in the private sector, and the Department of Defense must reach into innovating commercial firms, small businesses, and start-ups to bring advanced technologies to military systems. But the commercial sector is moving so fast, and the investments are so big, the defense industry cannot keep up. One of the obstacles to keeping pace is the defense acquisition system. For example, for major defense acquisition programs that have delivered capabilities, the average amount of time it took to do so has increased from 8 years to 11 years. The Department of Defense and its service branches have put various models in place to try to accelerate the development and fielding of new technologies, yet the department continues to struggle with delivering technology quickly and slow approaches persist.
This system would streamline DFARS, be more flexible, tolerate a modestly higher level of risk, give greater authority to defense system program managers, and give weight to the potential for game-changing capabilities against lowest cost and risk.
To promote the use of inventions arising from federally-supported-R&D, Congress enacted the Patent and Trademark Act Amendments of 1980, commonly called the Bayh-Dole Act. Under Bayh- Dole, federal contractors or grantees, including companies and universities, may elect to retain patent rights to inventions they made with federal support, and then use the invention itself or license the patent(s) to industry partners. In exchange for retaining patent ownership, the contractor provides the federal agency with a government-use license—permission for the government to use the patented invention without paying a royalty. The provisions of the Bayh-Dole Act are considered among the most successful of American technology policies and are emulated around the world.
The federal government also retains the authority to grant compulsory licenses to third parties in certain circumstances, known as “march-in rights,” but no federal agency has ever exercised these march-in rights. In 2023, the National Institute of Standards and Technology released draft guidance treating price as an appropriate consideration in “march-in” determinations.
The threat of using “march-in” rights for price controls would severely undercut incentives for private sector investment in commercializing federal research and inventions, reduce the returns to taxpayers’ support of federal R&D, and undermine the central purpose of the 40-year highly successful Bayh-Dole Act.
A dedicated agency to explain and accelerate regulatory processes, including permitting, will facilitate long-term contracts and provide predictability for investors, infrastructure developers, and end users to adopt new technologies. State legislatures and agencies should also work closely with community and business stakeholders to develop a clear and navigable regulatory environment.
