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1
Endless Frontier
Strategy
Plan for
$500B Investment in
National Security Sectors
APRIL 20, 2020
Under Secretary of State Keith Krach
Paul Touw Senior Advisor
2
USG increasingly spending less on R&D
Share of funds for R&D spending
3
Share of funds for R&D spending
R&D spending in the U.S.
4
R&D Objectives
• Increase U.S. R&D investment in10 national security sectors
• Protect IP and proprietary technology
• Compound government investment with private sector and allies
• Synergize spending between defense & commercial applications
• Leverage private sector resources and know-how
• Build collaboration with T-10 partners to counter malign regimes
• Strengthen technological warfare capability
• Increase economic competitiveness of US and T-10 companies
• Create new industries and jobs
• Maximize “commercialization” of R&D investments
5
Focus on “sectors of national security”
1) Biotechnology
2) Advanced wireless communications
3) AI
4) Quantum and advanced computing
5) Semiconductor foundries and manufacturing
6) Autonomous and electronic vehicles
7) Cybersecurity and secure systems
8) Space technologies
9) Smart manufacturing and robotics
10) Advanced energy technologies and fusion
6
Catalyst Sen. Schumer, Young $100B bill
Endless Frontiers Act
• Focuses on 10 critical sectors
• Adds $100 billion for R&D
• Over 5 years
7
$100B
Up to
$1 Trillion
over ten years
Leverage
How do we leverage to $1 trillion?
Senators
Schumer/Young
8
Add public-private R&D partnerships
• Leverage Schumer/Young bill (Frontiers Act)
➡ Expands NSF to NSTF, provides USG funding of $100B
• Add a public-private sector $1-for-$1 match
➡ Expands R&D sector funds to $200B
➡ Requires private sector skin-in-the-game
➡ But helps direct investments where private sector see needs
➡ Participating private sector companies get some IP rights
9
That doubles USG contributions
$100B
Senators
Schumer/Young
bill
$200B
Add
private sector
R&D match for
skin-in-the-game
10
Add commercialization funds
• Leverage SBA model
➡ Same as small business, leveraged to “national security
sectors”
➡ For every $1 equity contributed privately, USG loans $2
• Make available $200 billion in USG loans over ten years
➡ $20 billion per year
➡ Use loan guarantees, execute through SBA
➡ Net result is therefore another $300B
➡ $100 billion from private sector + $200 billion loans from USG
• Create virtual technology zones
➡ Do the same thing as “opportunity zones” but apply that
legislation to “national security sectors”
11
That takes it to $500 billion
$100B $200B $500B
Senators
Schumer/Young
bill
Add
Private Sector
R&D match for
skin-in-the-game
(+$100B)
Add
Commercialization
Funds
(+$300B)
12
Ask T-10 technology collaboration with USA
• Permit T-10 to join, and do the same, pro rata
➡ Expands total G7 nation R&D to $1 trillion
➡ G7 nations can also “collaborate” on joint R&D projects
➡ G7 nations can “collaborate” on commercialization
13
Now you have $1 trillion
$100B $200B $500B
Up to
$1 Trillion
over ten years
+$500B
G7
14
Safeguard National Security Sectors
• Assure all R&D investments are protected
• Institute security protocols around invested funds and IP
• Strengthen laws for theft of national security sector IP
• Not released to public domain
• Non-participating nations may get license and pay royalty
• Malign competitors excluded and no access
15
For immediate comment, analysis, and further explanations contact:
Paul Touw
Chief Strategy Officer
Senior Advisor to U/S Keith Krach
Economic Growth, the Environment, and Energy
U.S. Department of State
TouwP@state.gov
Cell: (202) 664-6421
Keith Krach
Under Secretary of State
Economic Growth, the Environment, and Energy
U.S. Department of State
KrachKJ@state.gov
Cell: (202) 975-5469
Work: 202-647-7575

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Endless Frontier Strategy 4/20/20- Keith Krach and Paul Touw

  • 1. 1 Endless Frontier Strategy Plan for $500B Investment in National Security Sectors APRIL 20, 2020 Under Secretary of State Keith Krach Paul Touw Senior Advisor
  • 2. 2 USG increasingly spending less on R&D Share of funds for R&D spending
  • 3. 3 Share of funds for R&D spending R&D spending in the U.S.
  • 4. 4 R&D Objectives • Increase U.S. R&D investment in10 national security sectors • Protect IP and proprietary technology • Compound government investment with private sector and allies • Synergize spending between defense & commercial applications • Leverage private sector resources and know-how • Build collaboration with T-10 partners to counter malign regimes • Strengthen technological warfare capability • Increase economic competitiveness of US and T-10 companies • Create new industries and jobs • Maximize “commercialization” of R&D investments
  • 5. 5 Focus on “sectors of national security” 1) Biotechnology 2) Advanced wireless communications 3) AI 4) Quantum and advanced computing 5) Semiconductor foundries and manufacturing 6) Autonomous and electronic vehicles 7) Cybersecurity and secure systems 8) Space technologies 9) Smart manufacturing and robotics 10) Advanced energy technologies and fusion
  • 6. 6 Catalyst Sen. Schumer, Young $100B bill Endless Frontiers Act • Focuses on 10 critical sectors • Adds $100 billion for R&D • Over 5 years
  • 7. 7 $100B Up to $1 Trillion over ten years Leverage How do we leverage to $1 trillion? Senators Schumer/Young
  • 8. 8 Add public-private R&D partnerships • Leverage Schumer/Young bill (Frontiers Act) ➡ Expands NSF to NSTF, provides USG funding of $100B • Add a public-private sector $1-for-$1 match ➡ Expands R&D sector funds to $200B ➡ Requires private sector skin-in-the-game ➡ But helps direct investments where private sector see needs ➡ Participating private sector companies get some IP rights
  • 9. 9 That doubles USG contributions $100B Senators Schumer/Young bill $200B Add private sector R&D match for skin-in-the-game
  • 10. 10 Add commercialization funds • Leverage SBA model ➡ Same as small business, leveraged to “national security sectors” ➡ For every $1 equity contributed privately, USG loans $2 • Make available $200 billion in USG loans over ten years ➡ $20 billion per year ➡ Use loan guarantees, execute through SBA ➡ Net result is therefore another $300B ➡ $100 billion from private sector + $200 billion loans from USG • Create virtual technology zones ➡ Do the same thing as “opportunity zones” but apply that legislation to “national security sectors”
  • 11. 11 That takes it to $500 billion $100B $200B $500B Senators Schumer/Young bill Add Private Sector R&D match for skin-in-the-game (+$100B) Add Commercialization Funds (+$300B)
  • 12. 12 Ask T-10 technology collaboration with USA • Permit T-10 to join, and do the same, pro rata ➡ Expands total G7 nation R&D to $1 trillion ➡ G7 nations can also “collaborate” on joint R&D projects ➡ G7 nations can “collaborate” on commercialization
  • 13. 13 Now you have $1 trillion $100B $200B $500B Up to $1 Trillion over ten years +$500B G7
  • 14. 14 Safeguard National Security Sectors • Assure all R&D investments are protected • Institute security protocols around invested funds and IP • Strengthen laws for theft of national security sector IP • Not released to public domain • Non-participating nations may get license and pay royalty • Malign competitors excluded and no access
  • 15. 15 For immediate comment, analysis, and further explanations contact: Paul Touw Chief Strategy Officer Senior Advisor to U/S Keith Krach Economic Growth, the Environment, and Energy U.S. Department of State TouwP@state.gov Cell: (202) 664-6421 Keith Krach Under Secretary of State Economic Growth, the Environment, and Energy U.S. Department of State KrachKJ@state.gov Cell: (202) 975-5469 Work: 202-647-7575