Exploring China's Technology Transfer Strategy

Exploring China’s participation in U.S. venture deals and the passing of the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA)! In 2017, Presidential Innovation Fellow Michael Brown co-authored a report exploring China’s participation in U.S. venture deals to assess: how large the overall investment was, whether it was growing and what technologies were the focus of investment. In the process he found Chinese participation in venture-backed startups at a record level of 10-16 of all venture deals (2015-2017) and that investment had grown rapidly in the past seven years.

The report also found that the technologies where China is investing are the same ones where U.S. firms are investing and that will be foundational to future innovation: artificial intelligence, autonomous vehicles, augmented/virtual reality, robotics and blockchain technology. Moreover, these are some of the same technologies of interest to the U.S. Department of Defense to build on the technological superiority of the U.S. military today. The speed at which dual-use technologies are developed in the commercial sector has significant impact on the nature of warfare and the critical nee

need to master them ahead of competitors.

The U.S. economy today continues to benefit from the innovations arising from decades of federal research which created new industries at the forefront of technology today including those based on semiconductors, GPS, the internet, hydraulic fracturing, genomics and many others. To benefit from a thriving future economy, the authors concluded that the U.S. must increase the investment in federally-funded research and recruiting to drive a growing pipeline of innovations and technology breakthroughs. Additionally, to preserve our technological advantage, we must take steps to ensure “a healthy and secure national security innovation base that includes both traditional and nontraditional defense partners” including early-stage companies.