China seeks to overtake America’s leadership role—across economic, military, and social spheres—and is proactively working to define the rules of the road for the second half of the century by building economic and strategic alliances to support its dominance. In this panel, leaders assessed the current landscape of international economic and technological competition and explored how the United States can lead the world in innovating and commercializing the defining technologies of the next economy.
Introducing the panel via video, National Science Foundation Assistant Director for Technology, Innovation and Partnerships Dr. Erwin Gianchandani praised the work being done in the Mountain West to advance the NSF’s goals of advancing U.S. economic competitiveness, national security, and regional development. With global competition on the rise, investing in regional innovation is key to maintaining U.S. global scientific and technology leadership.
Dr. Gianchandani’s directorate, TIP (Technology, Innovation, and Partnerships) seeks to leverage NSF investments to accelerate the commercialization of new technologies and capabilities. Doing so requires more places across the United States to join the innovation economy — not just a few, primarily coastal, hubs. The Mountain West today serves as a model for how to grow regional innovation ecosystems, thanks to the partnerships between sectors and an ethos of collaboration.
To Dr. Gianchandani, the Mountain West is today one of the most important regions for U.S. economic and national security. That is why it was one of the regions selected for an NSF Engine, which together have to date invested $200 million in ecosystems nationwide, spurring a further $1 billion in private funds.
“The $8 billion NSF budget may seem small, but it is responsible for funding dozens of ‘unicorns’ making an incredible societal impact.”
Mr. Chad Evans
Executive Vice President and Chief Operating Officer
Council on Competitiveness
After the video introduction, Council on Competitiveness Executive Vice President and Chief Operating Officer Mr. Chad Evans highlighted the work of the Council’s Technology Leadership and Strategy Initiative (TLSI), a dialogue of CTOs from business, academia, and the U.S. DOE National Laboratory enterprise, which meet to discuss and provide recommendations for dealing with the disruptions and discontinuities present in today’s innovation economy.
Looking back to Dr. Gianchandani’s introduction, Mr. Evans asked, with a 330 million person, $30 trillion economy, how can the country invest to make an impact? The NSF has an $8 billion budget, a comparative drop in the bucket, but many “unicorn” companies have started thanks to their funding.
“We did not end up with one big science department like Vannevar Bush suggested, but the diversity of science funders we have today is a strength.”
The Hon. Patricia Falcone
Deputy Director for Science and Technology
Lawrence Livermore National Laboratory
Lawrence Livermore National Laboratory Deputy Director for Science and Technology and TLSI Co-chair Patricia Falcone noted the TIP directorate Dr. Gianchandani leads is a great way to enhance partnerships, but the NSF is not the only federal science funder. The Department of Defense is the largest supporter of research, followed by Health and Human Services and the Department of Energy. This diversity of research funders, rather than being inefficient, instead provides great opportunities for experimentation and partnership.
Lockheed Martin Vice President and Chief Technology Officer Dr. Steve Walker added DARPA to the most influential federal science funders list. As the former Director of DARPA, he noted how every DARPA program begins with parallel efforts for technology development and systems integration to produce a worthwhile capability, a model for defense technology that could be applied more broadly.
Turning to the topic of overall levels of U.S. R&D funding, Mr. Evans underlined a continuing structural disinvestment in R&D at the federal level – from 2 percent of GDP to 0.6 percent of GDP. Much of this loss has been supplemented by increasing private sector R&D, but is that a sufficient replacement? Dr. Walker thought not; in his view, new ideas most often come from universities and academia, and cutting their federal funding will kneecap future innovation.
Private sector R&D investment is witnessing significant growth. The top five commercial companies in the United States collectively invested $230 billion in research and development (R&D), and while those investments come from large technology hyperscalers like Google and Amazon, Lockheed Martin is also investing heavily in R&D, as well as making investments in dual-use technologies. While this may not fall under the category of basic science, Dr. Walker argues it remains crucial work.
However, Dr. Falcone points out a significant downside to the decline in federal science funding: reduced support for PhD and graduate students. While national R&D spending figures appear strong, the reality is concerning if young graduates are burdened with debt and lacking adequate support, as this could hinder our capacity to innovate in the future. She even suggested that addressing this issue may necessitate a comprehensive reevaluation of the Defense Education Act to enhance support for student scholarships.
Pivoting to why it is so important for the United States to remain at the forefront of global innovation, Dr. Falcone whichever country leads in emerging technologies like AI and quantum will define the framework the world operates in, giving them immense leverage over the global landscape. AI specifically is a “force multiplier,” enhancing the ability of researchers to create; failure to lead in AI may make leadership in other technology areas more difficult. She also raised access to space and space situational awareness as other areas of immediate concern, a sentiment Dr. Walker echoed, as peer adversaries are mobilizing their space capabilities.
While Dr. Walker agrees the United States has a strong innovation ecosystem, the country struggles to convert innovation into capability, at least in defense terms. That is where the Technology, Innovation, and Partnership (TIP) directorate and the NSF Engines can create tremendous value, by connecting innovators to those who can use their products. For example, Lockheed Martin is not a global AI leader, but through partnerships with NVIDIA and Microsoft, it is leading in AI deployment through defense. These collaborations can connect disparate players across the innovation continuum to complete the journey from idea to deployed capability.
“In national security, you do not want to end up in second place.”
Dr. Steve Walker
Vice President and Chief Technology Officer
Lockheed Martin
Dr. Walker and Dr. Falcone raised manufacturing as a point of concern, as well, with Mr. Evans bringing up the examples that the United States is responsible for less than 1 percent of global ship manufacturing, and BYD, the Chinese automotive manufacturer, makes twice as many electric vehicles as Tesla. Dr. Walker reminded participants how vulnerable U.S. supply chains are, as revealed in the wake of COVID-19; in response, Lockheed Martin is setting up manufacturing sites in allied nations globally to prevent disruption in the event of a conflict. Even so, the United States must strengthen its advanced manufacturing capability. Dr. Walker argued the microelectronics manufacturing industry was allowed to slip away — from over 30 percent of global manufacturing to nearly 10 percent — and now the United States is spending billions to reclaim a piece of it. Dr. Falcone added how AI can assist in boosting U.S. manufacturing, both in design and in supply chain monitoring. While AI is taking strides in designing products and new materials, it can also be deployed to monitor manufacturing performance and optimization.
Mr. Evans then highlighted the current negative narrative surrounding AI, primarily focused on potential job losses. He drew a parallel to the internet in the 1990s, which, instead of diminishing employment opportunities, created significant new avenues for growth and propelled U.S. productivity ahead of Europe and Japan. He then asked the panel about their expectations of AI's future impact on the economy.
Dr. Walker shared that Lockheed Martin has begun integrating AI into internal operations and recently deployed AI systems in the field. The company has teamed with NVIDIA to deliver real-time AI updates to field platforms. For example, in a notable achievement from earlier this year, an AI-augmented warship successfully detected and intercepted a Houthi missile — among the first demonstrations of AI-enhanced combat capabilities.
Dr. Falcone pointed the 2025 “AI Jam” hosted by OpenAI, where over 1,500 scientists from the U.S. DOE National Laboratory system explored how AI models could support their work; participants brought diverse problem sets to test how AI could advance their research. More recently, her lab conducted workshops to train all employees—not just scientists—in AI tools. The enthusiasm among participants highlighted the positive reception to productivity gains these tools present. To conclude, Mr. Evans highlighted an upcoming policy report from the TLSI: the Compact for America: A Call to Action for a New Tech-Driven Industrial Base and National Innovation Ecosystem. Asked to give a preview, Dr. Falcone how the report lays out ways the United States can to enhance its innovation capability and capacity, like retaking control of standards-setting bodies from China, updating how we conceive of the defense industrial base, and expanding the innovation economy to more places and people across the country. Dr. Walker remarked that the report supports the ongoing importance of defense primes while pointing to a growing necessity to accelerate the growth of dual-use technologies and innovations from smaller companies. He concluded on a positive note — the United States maintains substantial advantages in innovation, he said, and it is positioned to remain at the forefront of global technology with the right policies in place.
