There are a number of things – like Social Security, Medicare, healthcare, education and national defense – that require federal involvement – and digital technology is one of them. Not that the federal government ignores technology. Some would argue there’s already too much government “interference” with the technology markets and more than enough funding of technology initiatives. The call here is for an aggressively expanded federal agenda.
Please, let’s not start another “big government” argument here. Let’s just acknowledge that the current US technology investment strategy is failing: the US ranks #25 in the world in R&D tax credits, has fallen out of the top ten in global innovation, is losing the AI arms race, is experiencing falling rankings in computer science and engineering, and is #11 in the world in “technological readiness.” There are more indicators, but the point is clear.
Here are ten things the federal government should do about technology. I am not discounting what the individual states might do in these areas. Ideally, states are also taking steps to address technology challenges or would gladly follow the lead of the federal government. Since federal leadership on many technology issues is lagging, we cannot leave everything to the states.
So, here’s the list and the recommendations:
#1 – Privacy: Pass a GDPR-Like Federal Privacy Law
Similar to what the Europeans have done, the US needs to pass an equivalent General Data Privacy Regulation (GDPR). Since many private and public corporations are unlikely to help with privacy (since regulations undermine their business models by limiting, protecting and controlling the information they collect and monetize) the federal government needs to work on behalf of citizens. As the Democratic Representative from Georgia, Hank Johnson, asks: “In the wake of ongoing scandals involving Americans’ digital privacy, there is a growing sentiment among Americans that our federal laws need to reflect that we have fully entered the era of big data.” California is already moving in the GDPR direction with its Consumer Privacy Act which will eventually allow Californians to delete their personal data and block the sale of their data to marketers and other vendors. More states are following which is why, among other reasons, the US needs a federal law to have a consistent privacy policy across the country. Trump & Co. also need to regulate the growing surveillance culture which includes the rapid deployment of facial recognition technologies. This is easily a privacy tipping point. Americans’ right to privacy should tilt the scale.
#2 – Access: Return to Net Neutrality & Deploy Global Satellites
Everyone in the US (and the world, for that matter) should have access to the highest speed Internet at a price they can afford, with federal subsidies, as necessary, to assure access to the Internet, eventually via global satellite internet (GSI) access. Trump and the Congress should cut fast deals with GSI providers. In addition to access, the US needs to immediately restore Net Neutrality. If you don’t want to listen to me about Net Neutrality, listen to MIT’s Andy Lippman. Every Americans should have access to the highest speed Internet, including the under-populated states as well as the most populated regions that have less-than-optimal connectivity. This is a federal responsibility since carriers will always optimize toward profitable deployment. In spite of some limited efforts to provide access to the poor, the job is far from done.
#3 – Innovation Incentives: Increase R&D Tax Credits to 25%
The US ranks #25 in the world in R&D tax credits. The federal government needs to dramatically increase R&D tax credits to get the country to at least in the top #10. Ernst and Young and Joe Kennedy tell us that “Germany, the UK and China are sweetening the pot, while the US slides.” “The United States needs to follow the international trend. The Information Technology and Innovation Foundation has called for increasing the tax credit’s Alternative Simplified Credit to at least 20 percent from its current rate of 14 percent.” Or 25%.
#4 – STEM Educational Support: Increase Annual STEM Funding 10-Fold
Some US states – like Pennsylvania and New York– are making important investments: “Governor Tom Wolf’s PAsmart initiative has made Pennsylvania a national leader in computer science and STEM education. According to Education Commission of the States (ECS), Pennsylvania now ranks second in the country for investments in K-12 STEM and Co.” But what about the feds? Well, the “U.S. Department of Education Fulfills Administration Promise to Invest $200 Million in STEM Education.” Good news, right? Remember that one B-2 Spirit aircraft costs US taxpayers $737 million, and America’s new aircraft carrier (without the planes), the USS Gerald R. Ford, will cost $13 billion, or 65 times the government’s investment in STEM. Federal STEM funding should be increased by at least tenfold. Federal STEM educational guidelines should include funding for state-run STEM educational and training programs. Matching federal funding of state-funded programs should also be available.
#5 – Healthcare: Standardize & Fund
Healthcare in the US is a mess. “The US now ranks 27th in the world for its levels of healthcare and education … this represents a significant decline from 1990, when it ranked sixth.” “The United States health care system is the most expensive in the world with an annual spending of $3 trillion or $9,523 per person, accounting for 17.5 percent of the gross domestic product … but, consistent analysis shows that the healthcare system in the US is one most underperforming among developed nations.” Nothing new here. So how can digital technology help and how can Trump & Co. make it happen? Lots of ways, including “data standardization, data integrity, information exchange, interoperability, analytics, storage, infrastructure modernization, legacy system modernization, cloud adoption, telehealth and mobile applications.” We are on the verge of a technological revolution in healthcare that needs a major federal push. Electronic Health Records (EHR) standardization, sharing and protection is a federal job. We also know that wearables and mobile computing will enable large segments of the healthcare management process. Here too the federal government must standardize the use of compatible mobile platforms especially as telemedicine applications develop.
#6 – Climate Change: Fund the Linkage Between Digital & Climate
Please let’s not quibble over terms like “global warming” versus “climate change.” If you believe in empirical data you know we’re in trouble. But how can digital technology help and how can the federal government help save the environment? There are many ways for digital to help, including big data analytics (to help identify and measure the problems), intelligent mapping technology (to help with location-based analysis), autonomous vehicles (to help reduce pollution), non-fossil fuel-based vehicles (driverless or with operators), mobile technology (that are self-powered or require less than traditional charging), cloud computing (to help reduce the number of data centers and their power consumption) and other digital technology-defined solutions. Digital technology is a huge part of the solution. All it needs is increased federal support.
#7 – Talent: Remove Measures that Reduce H-1B Visas for Technologists
Rani Molla describes things this way: “President Trump’s new immigration proposal would be terrible for tech … the dead-on-arrival plan would greatly cut down on tech workers’ ability to bring their families to the US.” Molla further states: “using executive orders, the president has made it more difficult — and expensive — to hire high-skilled tech workers from other countries. The administration has throttled a program that encouraged entrepreneurs to come to the US. It’s also ending work permits for spouses of H-1B holders, who are often highly skilled professionals themselves, among other measures to stop immigration. One result has been a net decline in high-skilled visas, known as H-1Bs, which has been bad for tech companies in the US (but good for Canada).” Similarly, Issue Lapowsky writing in Wired Magazine reports that “Visa rejections for tech workers spike under Trump.” What else needs to be said about the race for the best and brightest?
#8 – Anti-Trust: Increase Competition & Efficiency by Shrinking the Technology Oligarchy
In 2018, the five largest companies in the world (by valuation) were Apple, Google, Microsoft, Amazon and Facebook, followed closely by Alibaba, Berkshire Hathaway, Tencent Holdings, JPMorgan Chase, ExxonMobil, Johnson & Johnson and Samsung Electronics. Amazon owns around 50% of the e-commerce market followed by eBay (6.6%), Apple (3.9%), Walmart (3.7%) and Home Depot (1.5%). Four vendors own close to 75% of the cloud infrastructure market (Amazon Web Services,33%, Microsoft 13%, IBM 8%, Google 6% and Alibaba 4%, as of Q1 2018). Three providers – Amazon Web Services, Microsoft and Google – own 55% of the overall cloud market. Google owns over 90% of the Internet search market. Facebook continues to dominate social media, followed by YouTube (Google), WhatsApp (Facebook), Facebook Messenger (Facebook), WeChat (Tencent) and Instagram (Facebook). Microsoft owns 36% of the worldwide operating system market, behind Android at 42% (Google and the Open Handset Alliance). The same market trends are seen in other industries, like ridesharing, where Uber and Lyft own over 70% of the market.
Because of market dominance, competition in the technology world is shrinking. It’s hard to compete with oligarchies with decades-long leads. David Wessel writing in the Harvard Business Review is straightforward: “Despite their undeniable popularity, Apple, Amazon, Google, and Facebook are drawing increasing scrutiny from economists, legal scholars, politicians, and policy wonks, who accuse these firms of using their size and strength to crush potential competitors. (Their clout caught the attention of European regulators long ago.) The tech giants pose unique challenges, but they also represent just one piece of a broader story: a troubling phenomenon of too little competition throughout the U.S. economy.” As Russell Brandom andAdi Robertson suggest, it’s time to resurrect antitrust.
#9 – Cyber Security: Open the Wallets – All the Way
The US digital infrastructure is leaky, to put it ridiculously mildly. Just as dangerous, the digital infrastructure and the most popular applications – like social media – are vulnerable to manipulation by terrorists, hackers, adversaries and human and software bots. According to the US Department of Homeland Security, the threats are everywhere and growing. DHS believes that the US should “reduce threats from cyber criminals. In partnership with other law enforcement agencies, DHS must prevent cyber crime and disrupt criminals and criminal organizations who use cyberspace to carry out their illicit activities and leverage identified threat activity and trends to inform national risk management efforts.” In fact, there are lots of plans, objectives, “sub-objectives” and goals: “DHS must continue to strengthen our efforts as part of the law enforcement community to pursue, counter, reduce, and disrupt illicit cyber activity by leveraging, in particular, our specialized expertise and capabilities to target financial and trans-border cyber crimes … the transnational and cross-jurisdictional nature of cyberspace, as well as the sheer size of the challenge, requires closer collaboration with other federal, state, local, and international law enforcement partners.” The problem is enormous and growing faster than anyone can measure. The proposed 2020 federal budget for cyber security, which includes funding for the Defense and State departments (among other agencies) is up a paltry 4.7%. Note that the “budget proposal asks for more than $9.6 billion for Defense Department cyber operations and just over $1 billion for civilian cybersecurity efforts.” $1B for civilian cybersecurity efforts, and a 4.7% overall increase in the cyber security budget. One doesn’t have to be an expert to conclude that the funding solution is dwarfed by the problem. The federal cyber security budget should be increased by 25% across the board every year until the threat is manageable – noting that the problem will never disappear.
#10 – Artificial Intelligence & Machine Learning: Take the Lead
The Trump Executive Order on Maintaining American Leadership in Artificial Intelligence issued on February 11, 2019 hopefully is just an early US shot in the AI war, an implementation war the US is arguably already losing, especially in areas like robotics. As described by Will Knight in the MIT Technology Review, “the initiative is designed to boost America’s AI industry by reallocating funding, creating new resources, and devising ways for the country to shape the technology even as it becomes increasingly global … however, while the goals are lofty, the details are vague. And it will not include a big lump sum of funding for AI research.” As Knight points out, “other nations, including China, Canada, and France, have made bigger moves to back and benefit from the technology in recent years.”
So, where’s the funding? Why the vagueness about investments? Why is funding the responsibility of Congress? Why not White House-directed funding for “the American AI Initiative”? It would be hard to improve upon the observation made by William Carter from the Center for Strategic and International Studies as reported by Kaveh Waddell in Axios: “If they can find $5 billion for a border wall, they should be able to find a few billion for the foundation of our future economic growth.” Waddell further reports that “so far, U.S. funding for AI has been anemic … an analysis from Bloomberg Government found that the Pentagon’s R&D spending on AI has increased from $1.4 billion to about $1.9 billion between 2017 and 2019. DARPA, the Pentagon’s research arm, has separately pledged $2 billion in AI funding over the next five years … it’s hard to put a number on the entire federal government’s AI spend, says Chris Cornillie, a Bloomberg Government analyst, because ‘most civilian agencies don’t mention AI in their 2019 budget requests … (but) these numbers pale in comparison to estimates of Chinese spending on AI. Exact numbers are hard to come by, but just two Chinese cities – Shanghai and Tiajin – have committed to spending about $15 billion each.’” It’s also unclear how the new initiative builds significantly and meaningfully upon the Obama Administration’s National Artificial Intelligence Research and Development Strategic Plan, issued in October of 2016. The US needs a comprehensive AI strategy (that answers the Chinese plan) and it needs significant, long-term, dedicated, earmarked funding.
Some Thoughts
What are the constants? Federal leadership and increased spending. Federal investments in digital technology should be large and continuous. There’s nothing more strategic to the country’s prosperity than digital technology in all forms and flavors. Counterproposals to federal leadership and spending include industry and state government leadership. But the incentives here are competitive, not national. While competition is terrific, there are times when national priorities should outweigh the competitive objectives of certain companies and states. Perhaps we need a Department of Digital Technology to advance a federal agenda.
