Bad Idea: Expecting the Private Sector to Drive Innovation in National Security

It’s bipartisan Washington gospel that America’s private sector (“industry”) will deliver the innovation the country needs from next-generation national security technologies to future manufacturing competitiveness. Such expectation, however, is increasingly a bad idea without a far more strategic, centralized, and White House-driven approach to the challenges ahead. We are at the front-end of an era of rapid, disruptive technological change in which global competition is heating up, and first-mover advantage could prove decisive in markets and geopolitics for decades to come. National government-backed industrial policies, not markets alone, will play a decisive role in determining outcomes. The United States needs proactive strategies and not the kind of defensive, on-the-fly responses we’ve seen on artificial intelligence and 5G telecommunications.

At some point in the 1970s, Republicans and eventually Democrats began to develop an allergy to anything that resembled government direction of industry, even if it was predicated on national security grounds. The central role that government played in industrial planning and policy in the Second World War and continued to play through the early Cold War was dismissed as an aberration. With supply-side economics ascendant since the Nixon presidency, the argument for a laissez-faire approach toward industry prospered. The less government direction, the better, and the economy will organically innovate, the thinking went (and goes).