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The Pentagon’s new ambassador to Silicon Valley is hawkish on China

September 30, 2018

Michael Brown, the former Symantec CEO who just became the new head of the Defense Innovation Unit, believes that the United States must act now to avoid further falling behind China in a tech race.

Founded as the Defense Innovation Unit Experimental, DIU was established in 2015 to better connect service components and combatant commands with startups and non-traditional players in information technology. To date, they’ve completed 84 contracts.

In many ways, Brown is a clear and natural fit for the job. He co-wrote the so-called DIUx Paper, an in-depth analysis of the impact of Chinese investment on U.S. technology development. Published last year and updated in January, the paper played a key role in the Trump administration’s efforts to revise U.S. trade policies to curb the transfer to China of technology with sensitive national security implications. Those efforts eventually became law with the passage of the 2018 NDAA.

Brown said not enough players in America’s tech hubs get the nature of competition with China. “While I think the press has been covering that, I don’t think that’s widely appreciated by the business community, the public at large, by Silicon Valley. So we’re not recognizing that this is a race that has national security implications,” said Brown.

The former CEO has a more hawkish view of China than many in the tech industry, whose leaders are generally rushing to capture parts of the Chinese market (some might argue at the expense of human rights).

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“The Chinese government has taken control of resources to be able to pull what they call their business or commercial sector, which we point out is government-controlled, unlike our own,” he said. “So they’re pulling all of those resources together to make technological breakthroughs and really advance science and technology in their own country. [In the paper] we point out that we’ve been the victims of cyber theft and industrial espionage on a much broader scale than any other country has ever perpetrated against the U.S.”

Among startups, venture capitalists and even big tech companies in the Valley, “there’s a varied level of sophistication on this topic,” Brown said. The government can do a lot more to help the U.S. tech community understand the potential costs and pitfalls of partnering with China on things if it can expand its comfort zone in disclosing sensitive information.

“I would like to see the government get more involved…educate folks, release more classified information to help startups see what’s happened in a lot of different cases, where the Chinese have gotten involved [in the company] and then stolen intellectual property.”

Brown and others believe China is pulling ahead in IT hardware. “We’ve noticed that the VC industry has moved almost exclusively to funding software,” he said.

Although he helped shape the administration’s approach to tech transfer, he takes a rather non-Trumpian approach to trade policies, outreach to allies, government spending, and immigration.

Brown’s preferred approach would include careful coordination with other allies that also trade with China, such as Japan and Germany.

“While the report is being used as, ‘here’s the justification for … protectionist steps’–And we aren’t arguing against taking any protective steps, because you can’t leave the barn door wide open–the Chinese are a near peer competitor economically. They’re quite creative at inventing now. They aren’t just copying technology. We’re in a race and so what are we going to do as a country to deal with that? It has to include what we’re doing protectively on the investment side.”

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In March, Congress passed the biggest increases to national science funding in a decade. But the following month, Brown said U.S. funding efforts lacked the long-term vision of the Chinese. He wants increased funding for national science goals and imperatives, the sort of strategy that helped the United States in the Cold War and is now embraced by Beijing. His paper identifies several Chinese “Manhattan Projects”: in next-generation technology, including aircraft design, quantum computing, neuroscience and artificial intelligence.

“The real answer is that we have to make a much bigger investment in ourselves if we want to win the technology race and not be afraid to pull together our commercial sector, academia and the government to set some goals. One of the other things we could do is set some national innovation priorities.” he said. “I’m not aware of us doing that on a large scale since we were in the Space Race. We did have the genome project a couple of years ago. We don’t tend to do that and we have to recognize that one of our adversaries is doing that frequently. We should use that tool as well.”

That, however, would mean making tougher political decisions and funding national science and technology initiatives.

“Our declines in federal funding [for science and tech] as a share of GDP go back many years. There’s a recognition that we’ve won the technology race against the Soviets but now we are in another one. Whether we can create enough room in the budget [for better funding stem and basic research on the federal level] is another question. I don’t think the recent tax legislation moved us in the right direction there from the standpoint of creating room to invest in federally-funded research because we are increasing the deficit.”

Immigration is another area where Brown stands apart from the administration. Brown believes that more immigration is a good, even essential, aspect of national security.

“We have the worst of both worlds right now. We allow quite a few foreign nationals in to study and we don’t have a liberal immigration policy—and we were particularly concerned about those in the STEM fields—to stay and contribute to our economy. If you think about it, we should do one or the other. Our strong preference—because we live in Silicon Valley and see the positive effect of immigrants that live in this area—we’re strongly in favor of allowing those folks who have work in stem fields to get green cards and stay and contribute to our economy. Right now, the situation is that we’ve educated those folks so they’ll be leaving with their master’s and Ph.Ds in engineering, math, or whatever they’ve studied.”

On Tuesday, Brown said that he would like DIU to remain involved in policy discussions of national security and technology, but will focus those efforts around its offices in Washington, Boston, Austin, and Silicon Valley. “My earlier comments highlight the geopolitical and economic risks that China’s technology advances present. DIU wants to highlight for businesses the risks to the U.S. of supporting the technology transfers that China requires to participate in their markets (forced [joint ventures] being a primary example) and the importance to U.S. national security of supporting our military as well as the potential benefits we can now offer to commercial supplier through rapid prototyping and contracting.”

Brown will also focus on helping DIU further improve while and continuing to hunt for new projects to transform military tech. “A great recent example is the AI strategy that DIU pioneered that led to the formation of [Joint Artificial Intelligence Center] to become a template for AI projects that go beyond (but leverage the early work of) Project Maven.”

DIU is also spearheading a new effort toward predictive maintenance. “We’ve already proven a 28 percent reduction in aircraft maintenance costs with the data for a single aircraft type,” he said. The unit is working to scale that across multiple aircraft as well as Army vehicles. “Since maintenance costs across the Department are one of the largest single areas of expense, this has huge potential for increased uptime of equipment and reduced costs of maintenance.”

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@2018 By National Journal Group, Inc. All rights reserved.

Distributed by Tribune Content Agency, LLC.