February 20, 2023

In recent posts, we have described how over the last 30 years China has smartly leveraged the vulnerabilities of the digital age to steal Western technology and, in so doing, leap-frog generations of R&D to become a world economic power. Not satisfied with their renaissance as an economic power, China leveraged massive government financial support for its domestic industry to compete unfairly against western industry and insinuate itself into the technological backbone of nations in Africa, Asia, Europe, Latin America – and even rural areas of the US.

Essentially, China has created a digital version of the USA’s Marshall Plan, which the USA used successfully after World War II to transform our former adversaries into some of our closest allies a generation later.

Unlike the US and Western Europe, China understood that the digital age was more than a technical revolution and was in fact a historic opportunity to advance their geo-political goals in the interests of making China a preeminent power in the 21st century. Not only did they recognize the vulnerabilities of the digital age, but they exploited them to engage and support their domestic industry in a military-civil fusion, a project chaired by none other than other than Xi Jinping himself.

Conversely, the US and Europe have stubbornly resisted true digital transformation and focused almost entirely on the technical aspects of cybersecurity. Rather than actively engaging their industry as true partners, many have insisted on blaming their private industry for not being able to fight off the Chinese and other sophisticated attackers. 

China’s Digital Silk Road initiative is essentially a Digital Marshall Plan, which uses basically the same methods as the US used after WWII – subsidized economic development — to alter the geo-political order. Only in this case China seeks to change the post WWII world order from a US/Western European basis to one more directly adhering the China as the dominant nation. 

As we await the release of the Biden Administration’s new cybersecurity strategy one hopes it will appreciate the need for broader and affirmative partnership with domestic industry, While the US certainly should not Mimic the Chinese in their centralized and authoritarian economic model, the USA should instead be leveraging the economic advantages in the western free market, and pro-innovation model.

Indeed, it can be argued that the centrally mandated model China and other authoritarian governments use, like Russia and Iran, creates certain efficiencies that allow for exploitation of digital systems; the reality is that the western model – if properly accessed – is a far better fit for the fastmoving digital age with its emphasis on speed, flexibility, and creativity.   It is not the western economic model that is problematic in the digital warfare we are experiencing; it is the failure to properly adapt the model to the unique environment of the digital age.

It also is worth noting that the US has faced major issues before and properly adapted the public private relationship to achieve vital national goals.  One historic example is the space race in the 1950s and 60s.  In that situation, the US created a new agency, NASA, and vastly exceeded its own deadlines to catch and beat the Russians – who, with the launch of Sputnik, commanded an early lead — in the space race.

A generation later, the US faced its initial computer chip competition in the 1980s – this time, Japan had leaped out, to a major and what some thought at the time was an unassailable lead in modern chip production. Once again, the US responded with a unique public private partnership SEMA-TECH, which helped the US catch and fairly quickly match and beat the Japanese and become leaders in the space.  Unfortunately, the US then dismantled the SEMA-TECH model and again lost primacy in the field.

Still a more recent example of the US leveraging and collaborating with industry is in the COVID-19 crisis with Operation Warp Speed.  In this case, government and industry combined to generate effective vaccines against the virus in record time – allowing us, and the world, to return to a new normal in comparative safety.

The point is that for the United States to secure ourselves in the digital age, we need to understand the degree of competition we are facing from our adversaries and respond with equal thoughtfulness, comprehensiveness, and support.  We have done this before, and we can do this again.  The question is will we.

In subsequent posts, we will discuss multiple examples of how various incentive models we already use in the US might be successfully adapted to maximize our cybersecurity – but first we need a strategy to do it.