The United States faces a defense strategy conundrum that stems from intense near-peer competition and threatens to overturn American military primacy. From anti-area/access-denial to hybrid warfare, China and Russia have acquired formidable asymmetric capabilities and are rapidly eroding America’s ability to project power. At sea, American aircraft carriers are, for the first time, exposed and vulnerable to short-, medium-, and long-range threats. In the air, the United States is faced with the devastating prospect of losing the guarantee of air supremacy in both Europe and the Indo-Pacific. As General Frank Gorenc, Commander of the United States Air Force-Europe, concludes, “The advantage that we had from the air, I can honestly say, is shrinking. I don’t think it’s controversial to say [China and Russia have] closed the gap in capability.” Finally, the United States is, as succinctly summarized by US Army Chief of Staff General Mark Milley, “outranged, outgunned on the ground.” This erosion in American military-technological superiority—paired with Chinese assertiveness and Russian revanchism—poses an acute strategic challenge for the United States.

American defense planners and policymakers have faced two previous challenges of similar magnitude. In the 1950s, the United States invested heavily in atomic weapons capabilities to offset the perceived numerical advantage of conventional Soviet forces. Military planners believed that the devastating destructive power of atomic weapons could compensate for the dearth of European troops. Since that first strategic offset, military-technological superiority has been central to achieving America’s defense and deterrence needs. As the Soviets developed nuclear capabilities of their own, the United States again looked to technological innovation to offset adversaries’ military advantages, developing precision-guided munitions and the infrastructure to support them, like stealth and GPS technology. As Shawn Brimley and Robert Work write in a Center for a New American Security (CNAS) report, “In collisions between conventional forces, a smaller force employing guided weapons might be capable of defeating a much larger force that employed unguided ones.” In response to Chinese and Russian advancements, the United States is once again looking to technological innovation to offset the advantages of other states.

Innovative technology is central to America’s offset strategies. For the third and current offset strategy, the Department of Defense (DOD) is focused on developing five key technologies:

  • Learning machines
  • Human-machine collaboration
  • Assisted human operations
  • Human-machine combat teaming
  • Network-enabled autonomous weapons

While the DOD emphasizes that “offset strategies are not about technology per se,” the third and current offset strategy relies heavily on cyber innovation. Planners and policymakers should take a step back and critically assess the vulnerabilities of this reliance. While there are many, we have identified a key vulnerability. A central assumption of the third strategic offset is that the United States will be able to develop technological innovations that far exceed those of near-peer competitors. This may seem like a sound assumption given the success of past offsets, but, for innovation, past performance is a poor predictor of the future. It is not clear that the United States will sustain its current primacy in science and technology into the future, revealing that the foundation of the third offset has been built on a shifting, unstable surface.

There’s a trite assertion made by self-assured observers: China can’t innovate. Observers argue that China’s clunky state-owned enterprises, an outsized emphasis on rote memorization, protectionism, and an oppressive authoritarian regime preclude indigenous innovation. Unfortunately, China has demonstrated that it is adept at not only stealing and stifling the innovation of competing states but also generating its own groundbreaking innovations. While Russia is capable of innovation, China’s innovative potential is truly formidable. Motivated by an urgent need for sustained economic growth, China is becoming a global leader in innovation. This should cast serious doubts on the assumption that the United States can out-innovate near-peer competitors.

The legitimacy of the Chinese Communist Party is derived in large part from its ability to consistently deliver robust economic growth. However, according to a report by the McKinsey Global Institute, China’s traditional sources of growth—labor force expansion and heavy capital investment—are waning, and China is grappling with an “innovation imperative.” In 2006, the Chinese government published The Guidelines for the Implementation of the National Medium- and Long-term Program for Science and Technology Development (2006-2020), an official roadmap for achieving continued growth and development. Reflecting China’s focus on and commitment to innovation-driven development, Chinese officials wrote, “The improvement of indigenous innovation capability must be made a national strategy that is implemented in all sectors, industries, and regions so as to drastically enhance the nation’s competitiveness.”

China is taking the improvement of its indigenous innovation capability seriously. Between 2003 and 2013, international research and development (R&D) expenditures grew by $836 billion. China’s aggregate (public and private) research investments accounted for 34% of that global increase. According to the United Nations Educational, Scientific, and Cultural Organization (UNESCO), “China is achieving an astonishing average annual growth rate of 18.3% in R&D spending.” In the United States, while the growth in private research expenditures has partially offset a persistent decline in public research funding, aggregate research funding as a percentage of GDP has remained stagnant. Unsurprisingly, in 2014, the OECD predicted that China’s R&D spending and intensity would outstrip the United States by 2020. These investments strengthen China’s position as an innovator and greatly increase the potential that the world’s next breakthroughs in science and technology will be “Made in China.” This trend will likely be exacerbated by the continued decline in US political support for research and development.

Spending is not the only aspect of China’s push for innovation. In 2010, China released the Outline of China’s National Plan for Medium and Long-term Education Reform and Development (2010-2020). Australian Education International, the international arm of the Australian Department of Education, Science, and Training (DEST) and Workplace Relations concludes that the Plan is “a frank assessment of how China intends to reposition itself to meet its economic and social needs of the 21st century.” The fundamental goal of China’s educational modernization is to, according to the Plan, “cultivate innovative personnel.” To achieve this goal, the Chinese government is not only expanding educational access and funding but also modernizing pedagogy and curricula and reforming its education system to make it more flexible. These changes address key criticisms of China’s innovative potential and, as a result, will catalyze China’s ascendance as a global innovation leader.

What are the results of this push for greater innovation? Contrary to detractors, China is quickly achieving its goal of becoming a global innovation leader. In 2015, the United States barred the export of Intel’s Xeon high-performance processors to China. The Chinese responded by accelerating the development and deployment of an indigenous chip, and, in 2016, the Chinese unveiled the Sunway TaihuLight, a supercomputer powered by indigenously designed and manufactured processors. Since its release, the Sunway TaihuLight has reigned as the most powerful computer in the world. As Jack Dongarra, a University of Tennessee computer scientist, observes, “It’s running very high rates of execution speed, very good efficiency, and very good power efficiency. It’s really quite impressive.” China is pushing even farther ahead. “The Department of Energy (DOE) is planning to bring two exascale machines[1] to fruition by 2023, a full three years after what the other countries are targeting for their initial systems,” writes Michael Feldman, managing editor for TOP500, an organization that ranks the performance of the world’s supercomputers. His sobering conclusion is that “we can dispense with the notion that the US will regain supercomputing supremacy during the exascale chase.” Capable of achieving more than one exaFLOPS, exascale supercomputers will be more than 50 times more powerful than today’s supercomputers and will hasten innovation in nearly every industry of the countries that possess them.

Chinese innovation is not a discrete phenomenon narrowly confined to a single industry or project. China is already a leading innovator in consumer-facing industries and manufacturing and is rapidly expanding its innovativeness to other industries, like science and engineering. From solar panels to high-speed rail, there are numerous case studies that illustrate China’s unique ability to utilize government incentives, integrate existing knowledge, mobilize researchers, and leverage the tremendous size of its domestic market to deliver innovations in product design and implementation. China’s burgeoning innovativeness threatens to undermine a core assumption of the DOD’s third offset, thereby endangering America’s military supremacy.

The United States has historically turned to military-technological advances to offset the strengths of near-peer competitors. In response to recent Chinese and Russian advancements, the United States is once again turning to technological innovation. This time, military planners should not assume that American innovation will deliver a resilient qualitative advantage over near-peer competitors, especially China. We’ve discussed only China’s formidable indigenous capabilities, but planners must not forget or ignore China’s willingness to steal and stifle the innovation of competing states, including the United States. If the DOD is convinced that it has identified the appropriate technologies to maintain the nation’s military supremacy, then the United States must also reorient itself to be more innovative and take concrete steps to protect its innovation.

[1] An exascale supercomputer is capable of at least one quintillion (1018) calculations per second, or one exaFLOPS. FLOPS is an acronym for “floating point operations per second,” which is the standard unit of measurement reported by the LINPACK benchmark used by TOP500. For comparison, an exascale processor could execute upwards of three million times as many instructions in the same time as an Intel i7-6950X processor, which is itself a fairly powerful modern processor.

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