New Technology Legislation

 

This week, Senate Democratic Leader Chuck Schumer (D-NY), Sen. Todd Young (R-IN), Rep. Ro Khanna (D-CA), and Rep. Mike Gallagher (R-WI) unveiled the Endless Frontier Act (EFA).

This newsletter doesn’t usually cover new legislation, much less proposed bills. But EFA is an exception since it seeks to turbocharge American “discovery, creation, and commercialization of critical tech.” By that, the lawmakers mean every technology you read about in this newsletter. 

EFA’s core proposals. There are three principal parts to the proposed bill:

  • Restructure the National Science Foundation into the National Science and Technology Foundation (NSTF)
  • In the NSTF, stand up a Technology Directorate that receives $100 billion over five years and operates like DARPA
  • Hand the Commerce Department $10 billion to invest across 10-15 regional tech hubs over five years

This is great news for U.S. universities and businesses because EFA would pad R&D budgets, establish new scholarships, and create cutting-edge labs and fabrication plants. 

What’s driving the frontier mindset? The private sector overtook Washington in R&D investment four decades ago. EFA’s sponsors want to expand the pool of capital so that all of Washington’s tech priorities are advanced in the U.S.

The other reason for EFA, which its sponsors explicitly call out: China. While Beijing’s bid for tech supremacy is better described as a “slow burn” rather than a “Sputnik moment,” the country’s tech industrial base is now a genuine contender with the U.S. There’s more to come: 

·       China plans to invest $1.4 trillion in emerging tech over the next six years. 

  • Chinese chipmaker SMIC recently announced a $2 billion investment from state-backed funds. 
  • Tencent will spend $70 billion on tech infrastructure over the next five years. 

“The U.S. needs to pursue with all-of-the-above strategy and intensify efforts,” a person familiar with the legislation said in a recent interview.

As Bill of Schoolhouse Rock’s “I’m Just a Bill” could tell you, EFA may never see the light of day. But adding $$$ to tech R&D and accelerating the U.S.-China tech decoupling are bipartisan priorities.


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