A Digital Policy Lab

Democracies’ openness gives them a natural edge over authoritarians in innovation, but today’s challenges cannot be addressed with yesterday’s tools.

The Biden administration and Congress reversed decades of disinvestment, ushering in a new industrial policy and building on Trump administration export controls to deny Russia and China access to critical technology, while reengaging in the contest with digital authoritarians over internet governance.

However, this ambitious industrial policy strategy -- including the CHIPS and Science Act and the Inflation Reduction Act as well as controls on semiconductor exports to China -- already faces accusations of protectionism and fears that public investment will “crowd out” private investment.

In its The New Foreign Policy of Technology report, part of its Modern Industrial Policy Project, GMF Digital proposes three new initiatives to engage allies and stakeholders in its new industrial policy: a Digital Policy Lab, a Technology Task Force, and building on the Declaration for the Future of the Internet.

This note details the critical role that a Digital Policy Lab would play.

Digital Policy Lab

The United States’ unrivaled innovation ecosystem is a key source of strength in responding to authoritarian threats. Although the US remains a global leader on technology, China is closing the gap.

Simplified Accounting of Current Advantage, United States and China

To realize the full potential of its industrial policy strategy, the United States must ensure that it cultivates rather than undermines this delicate ecosystem.  Doing so will require cooperation among stakeholders including federal, state, and local governments, the private sector, labor, and civil society with clearly defined goals.

The government’s role will also depend on specific goals. For deploying enabling technologies like broadband, the government role is funding and coordinating with communities. For ensuring resilient supply chains of critical technologies like semiconductors and clean energy, the government role entails export controls and funding and coordinating with industry, communities, and labor. For emerging technologies like bioengineering, the government should create platforms for innovation by focusing on R&D funding and setting appropriate guardrails.

To play these roles, the government will need to build its own capacity, coordinate new projects across agencies, build new partnerships, and confront outdated permitting procedures.

A Digital Policy Lab will nurture innovation through the following functions:

Capacity building:

• Coordinating responsibility for infrastructure and clean-energy spending and semiconductor strategy

• Hiring and training of civil servants with the appropriate technical skills

• Coordinating work with stakeholders outside government

Strategic funding:

• Working with industry to develop strategic frameworks for targeting funding where it is necessary, for example for science and R&D with relatively low rates of return, high-risk or enabling projects, or national security priorities

• Developing metrics for evaluation and reporting progress to the public and to industry to inform an agile funding process

• Updating and properly resourcing permitting processes

Data platforms:

• Gathering and employing empirical evidence to reform budget rules, inform the cost-benefit calculus used to evaluate funding and regulations, and account for the growth that investment generates

• Creating a handbook for permitting reforms, moonshots, advanced purchase commitments, regulatory sandboxes, co-regulation, and other procedural reforms, including a federal privacy law to enable safe data-sharing

Agile regulation:

• Creating proper guardrails to spur productive innovation and avoid the trap of failing to update regulations out of fear that doing so will create an advantage for rivals