Predictions that China could win the superpower tech race were once considered ludicrous. Now the U.S. is fighting this increasing threat by reinvigorating the U.S. innovation economy with a massive federal agenda to spur the growth of new technologies, startups, and regional innovation hubs.
China has advanced swiftly in artificial intelligence,
5G communications, electric vehicles, robotics, and other futuristic technologies.
Having dominated China’s markets while Facebook, LinkedIn and Google were blocked,
Chinese companies also have invested heavily in Southeast Asia and Africa,
while Alibaba, Tencent and other tech titans were penetrating Hollywood,
Silicon Valley and the Rust Belt before regulatory crackdowns largely halted
those deals.
Anyone who has traveled to China knows or seen the televised
Olympics sees the stark comparison with America’s decaying bridges, highways,
rails, and airports. China is building for the coming decades.
China’s swift catch-up to the U.S. in high-tech innovation
and R&D is remarkable. China has
surpassed the U.S. in patent filings globally, and is gaining on the
U.S. lead in research and development. China’s
venture capital market has surged to become the world’s
second-largest, and nearly
surpassed the U.S. in 2018. China’s ByteDance, the maker of TikTok,
is the world’s most valuable venture-backed unicorn, worth $140
billion. Meanwhile, America’s share of global
VC spending has fallen to about half from more than 90 percent in the 1990s.
To rebuild and retain America’s technology leadership will
take turbo-charging emerging startup ecosystems throughout the country, from the
Heartland region as well as the dominant coastal cities. New tech hubs that have
sprung up in the midlands such as in Columbus are a starting point in transitioning
Middle America’s once-dominant economies from industries of the past to
tomorrow’s growth engines. But more support is still needed for many former
steel towns, auto cities and coal mining lands that are struggling to latch on
to the new digital economy.
Legislation sweeping
through Congress ─ the America Competes Act and the U.S. Innovation and
Competition Act ─ rightly promises increased funding and resources that can
filter into overlooked inland markets. This effort can revitalize coal mining
regions of the Appalachians and the industrialized Great Lake states, and even create
Zoom towns in remote places.
But federal spending can only go so far. To fully recover
from the Rust Belt days, more venture capital investment is needed for the
Heartland. Two-thirds
of VC spending nationwide goes to startups in California, New York, and
Massachusetts. Only a fraction goes to
the midland states.
Increased venture spending in
mid-America can drive much-needed development in economic wastelands that still
suffer from poverty, drug addiction, lack of opportunities, and hopelessness.
This comprehensive approach to rebuild can help the U.S. counter China’s
technology innovation gains and restore confidence and pride.
Traditional jobs in factories
are not coming back. What’s needed to boost the former industrialized Midwest is
diversification from past industries that went overseas or were automated. This
drive forward needs to be accompanied by retraining of blue collar workers for higher-skilled jobs, an
increase in vocational education, and more mentors and role models to inspire tomorrow’s
tech entrepreneurs. With the right resources, the former Rust Belt can
emerge as a Tech Belt. Entire business sectors from insurance to healthcare to transportation
can be impacted.
Intel’s plans to invest $20
billion to build chip-making plants in central Ohio – alongside Google,
Facebook, and Amazon data centers ─ sends a strong signal that America is
building back. Other specialized tech-centric
innovation zones in former Rust Belt cities such as Pittsburgh and Cleveland are
gaining strength with technology startups. These innovation clusters have developed in the toughest,
most unexpected places, out of necessity.
In a Build
Back Better challenge initiated by the Department of Commerce, 50 finalists
made the cut, including advanced manufacturing hubs in Cleveland and Detroit,
information technology in Pittsburgh, and digital health in Louisville.
Now, increased funding and resources from both the
public and private sector can further develop regional tech hubs in new MidAmerican
frontiers. To commercialize innovations from this frontier, it will take entire
communities, uniting universities, incubators, economic development organizations,
and R&D labs. This effort will reshape the digital divide in America,
leading to a Silicon Heartland in the center of the U.S. It will speed up the
adoption of new technologies. It will spread throughout overlooked regions that
missed the tech boom. It will fuel economic growth in still-struggling cities
of the Heartland.
The beginnings of this revival are already here: biotech spin-outs from Cleveland
Clinic, robotics and autonomous driving breakthroughs from Carnegie Mellon
University, and advancements in 3D printing, additive manufacturing from the Youngstown
Business Incubator, and security technology in Dayton from the Air Force
Research Laboratory. See photo of author standing in front of last steel mill in the Pittsburgh metro.
Developing innovation zones such as in Cincinnati are getting
on the bandwagon too, fostering entrepreneurship, and attracting more millennials
and Gen Z’ers who want to live and work there. These
districts as tearing down or repurposing abandoned
factories, dilapidated buildings and empty shopping malls. They can be turned
into massive tech parks like I’ve seen in Shanghai, Beijing and Shenzhen.
It’s urgent that America
acts now to maintain its global technology leadership. Building up innovation
hubs in the Heartland should be an important part of this rebuild effort. An
American prosperity requires that all pockets of America benefit. It’s time
that “flyover country” becomes known as “fly in country.”
By Rebecca A. Fannin,
author of Silicon Dragon (2008) and Tech Titans of China (2019)
