July 12, 2021 BARRON’S 3
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30 BARRON’S July 12, 2021
OTHER VOICES
To effectively innovate and compete in the
21st century, we must leverage capitalism,
which has consistently led to victory.
To Secure America,
Embrace the Market
W
elivein
a world of
competition.
If we were
merely
talking
about level-
playing-field economics, then I
wouldn’t view global competitiveness
as a zero-sum game. Technological
advances and creative genius would
enable the U.S. and our partners to
continue to expand value while hav-
ing a positive impact on quality of
life. However, competitors on the
world stage seek to gain improved
stature at our expense, leveraging
government-sponsored programs
to achieve their strategic ends.
For some time now, Americans
have watched geopolitical competi-
tors, particularly China, emerge as
increasing threats. And yet we have
deepened our economic ties in an
effort to draw them into global fo-
rums. Rather than embrace free-
market ideals, they seek to under-
mine U.S. influence and reshape the
global community. We now find our-
selves in a position where we have
entrusted critical capabilities to
those who would prefer to do us
harm. The added layer of the pan-
demic has increased tensions and
drawn clear lines between partners
and competitors.
It is time for us to focus our efforts
on building the critical capabilities
required for our new security land-
scape. Just as we continue to innovate
and create cybersecurity solutions
to address rising threats—the recent
spate of cyberattacks on our govern-
ment agencies and private sector high-
lights the need for advancement on
this front—we must recognize invest-
ments in critical technologies as in-
vestments in the future of our national
security. This includes investments in
microelectronics, hypersonics, bio-
technology, artificial intelligence, au-
tonomy, fifth-generation networks,
and numerous other solutions.
The U.S. Senate’s recently passed
Innovation and Competition Act of-
fers the right intent for this purpose.
However, large-scale federal spend-
ing for specific programs and indus-
tries is the wrong approach. Our
free-market system is the best in the
world specifically because it drives
competition and innovation in the
areas where it is needed most. To the
extent that federal legislation is intro-
duced, it should bolster, not redirect,
existing market competition for criti-
cal technologies.
Through private investment, we
accelerate the development and
implementation of the best of our
products and services, which are
redefining how business is con-
ducted. Capital is allocated based on
real-time market demand, and offers
a more efficient and effective means
of solving key security issues.
One example is our manufacturing
industry. The pandemic showed us
new fault lines in this industry and
underscored the strategic importance
of technology-enabled innovation
compared with outdated and multi-
factor processes.
Manufacturers historically sought
to outsource production capabilities
based on artificially low costs of pro-
duction, leading to an overreliance on
global supply chains and, in some
cases, a reliance on our competitors.
Critical technologies are key to pro-
duction that is truly optimized, a
path toward empowerment instead
of a path of least resistance.
Private investment in new manu-
facturing solutions now permits the
robotics driving a new era of manu-
facturing to complete tasks and
continually improve as they are
repeated. New processes streamline
operations and reduce costs, allowing
By Dan Coats
the power of our free markets to op-
erate as intended. Supply chains are
also more efficient; unneeded steps in
the production process are removed.
This is just one illustration of how
emergent technologies, addressed
through the private sector, can reori-
ent an entire industry toward a more
sustainable paradigm and more se-
cure operations.
I have full faith in the mainstream
adoption of machine learning, AI,
microelectronics, 5G, autonomy, and
other solutions across industries—
and soon.
If we are to succeed across our
evolving risk landscape, however, we
must embrace the best ideas brought
to market. This is why federal action
should account for the power of the
private sector to guide our resources,
not vice versa.
To effectively innovate and com-
pete in the 21st century, we must le-
verage America’s core strengths: her
people, her genius, and her depth of
character. We must also leverage cap-
italism, which has consistently led to
victory. By allowing it to disrupt and
advance our industries, it is poised to
do it again.
Make no mistake: The economic
and national security threat is real.
Continuing to delay the onward move-
ment of industry will deepen our risk
and decrease our ability to extricate
ourselves in the future. But we are still
America. Time and time again, we
have mobilized against seemingly
overwhelming threats.
We will remain engaged globally,
support our allies, and continue to
encourage China and other nations
to operate on a level playing field,
but we must shore up our businesses
to face the realities of the 21st cen-
tury. Technological innovations stem-
ming from our private sector now
will allow us to do both at once.B
Dan Coats served as the director of
national intelligence from 2017 to 2019
and earlier served as a U.S. senator from
Indiana. He is currently a board member
of SCVX, a special purpose acquisition
company focused on companies address-
ing national-security concerns, and a
senior policy adviser at King & Spalding. Illustration by Dan Page