Two years into the Trump administration, the global race for technological dominance is on the minds of entrepreneurs, business executives, and the United States government alike. To take the lead in areas like 5G, artificial intelligence, autonomous vehicles, and quantum computing, it will take collaboration between the private sector, leading universities, and the federal government. With the repeal of net neutrality, changing immigration policies, and tariffs that all impact U.S. competitiveness, some may question the approach, but the White House has a plan to ensure the United States continues driving the world’s technological innovations.
Michael Kratsios, who most recently served as Silicon Valley investor Peter Thiel’s chief of staff, is leading President Trump’s national tech policy. He serves as deputy assistant to the President for technology policy at the White House. Techonomy’s Josh Kampel and David Kirkpatrick recently visited Washington D.C. to spend time with Kratsios. What are his priorities? How is the Trump administration thinking about tech and innovation?
“Most important to me is to ensure we have an environment that allows for the next great technologies to be developed here in the U.S. and not abroad,” Kratsios told us. He’s worked hard on regulatory changes at the Federal Aviation Administration around drones, with the Department of Transportation on autonomous vehicles, and with federal research agencies on policies related to artificial intelligence and critical future technologies like quantum computing.
“We came into the administration and said we want to organize our policy work around three main themes,” he explains. “First, we support the development of emerging technologies right here in America — what are the next great technologies that will profoundly affect how we live? And how do we ensure that they are developed here in America, with American values. Second, we want to empower Americans to innovate by clearing away regulatory hurdles and emphasizing building blocks like workforce development and STEM Education; and third, to defend American technologies abroad whether that’s addressing rampant IP theft by foreign governments, or ensuring that digital trade negotiations reflect the way we do business in the modern world. We set that agenda early. And we have accomplished a great deal driving the entire innovation ecosystem forward with those three pillars.”
“I’m proud of the unique innovation ecosystem in the United States. It’s one part private sector, one part academia, and one part federal government, working in tandem,” Kratsios continues. “We spend a lot of time thinking about how we can maximize the input of the federal government piece of that ecosystem. A great example is our supercomputing infrastructure. We have the fastest computer in the world at our Oak Ridge National Laboratory, and that’s something we could potentially share more with academics and our private sector to drive innovation.” Public/private partnerships are a big theme in his work, and he’s brought many tech leaders to the White House in the past two years.
Here are his thoughts on a few specific technologies and issues:
We want American companies to be able to test and operate their drones in the [United States]. The President met with commercial drone companies and operators at the White House in the summer of 2017. A few months later, he signed an executive order calling for the creation of a drone ‘pilot’ program to enable innovative drone applications across the country. We call it ‘regulatory sandboxing.’ So, we’re creating a program where you apply to the FAA to operate safely and innovatively. They give you a waiver, and you do it. When we were trying to put together this pilot program, the initial bids from some stakeholders in the federal government were: “We need multiple years.” But we were able, from scratch, to launch an entire program and have over 150 local, state, and tribal governments propose detailed concepts of drone operations to the federal government. Those applications were assessed, selected, vetted, and the program launched—all in less than 365 days. That’s an impressive feat. And today we have 10 exciting pilot projects underway in cities, states, and tribal territories all over the [United States].
Also, we as an administration understood—and the last administration struggled with this—that any integrated airspace issue for drones was going to have to include the FBI and the Department of Homeland Security at the table. Until recently they did not have the relevant authority to take down commercial drones if they thought there was illicit activity going on. Because those drones are essentially flying cellphones, wiretapping rules did not allow the authorities to take them down. Since the beginning of our administration, we have been working with Congress to give those authorities to our law enforcement folks, so they can work hand in hand with commercial operators in order to have a safe airspace.
Artificial intelligence will play a critical role in improving our quality of life and shaping our economy and employment landscape for decades to come. That’s why in May, we held an AI summit at the White House. We brought together university presidents, high-profile AI leads from large technology companies, and C-suite executives from some of our greatest Fortune 500 companies. The theme was “AI for American Industry.” If you are a farmer in Iowa, a drug developer in Boston, or a resource extractor in Texas, you will be using this technology to drive your business in the years to come. And it’s critical that you plug into the larger ecosystem developing these technologies and their applications so we get this right. We wanted to show what an economic imperative it was to have American leadership in this technology.
How do we ensure that the U.S. is home for the next great AI innovation? We need to think carefully about what role our government should play in AI development, application, and regulation, especially in light of what other countries like China are doing. Are there data sets the federal government has which could be valuable to AI researchers, for instance? Are there computational resources we could be using more effectively? We spend roughly $155 billion a year on federal R&D, and under President Trump that figure is increasing to $175 billion. We are prioritizing our increased investments to push more dollars and focus towards machine learning and AI.
Automation and Jobs
The White House has been extraordinarily focused on the question of the American workforce. The President signed an executive order establishing the National Council for the American Worker. The action was coupled with companies making commitments to reskill or retrain workers over the next five years. As it stands, we have commitments for over 6 million workers. It’s critical we work with the private sector to understand what skills they need for the jobs they’re trying to fill. We want to be a convener of sorts, bringing universities and community colleges and vocational schools together with the companies that are looking for skills.
We understand that job displacement will happen as a result of companies adopting new technologies. What’s important is to think about the types of programs and initiatives that we can drive, to allow for the very important reskilling and retraining that will be necessary. We have done that in a number of ways. The executive order President Trump signed last year to increase access to apprenticeships was a great example of helping people find pathways to lucrative and attractive middle-skill careers. The President also signed a memorandum prioritizing STEM education and the Department of Education committed $200 million of federal dollars to train the next generation of scientists and engineers. That commitment was matched by over $300 million in private money the same day.
We want the U.S. to be the home for the next generation of transportation. The federal government controls regulation of the security aspects of the vehicle, through the National Highway Traffic Safety Administration. But a whole subset of rules are controlled at the state level. At the federal level, we need to provide necessary and important guidance on safety, and then provide nonregulatory guidance to states as they develop their own rules. Department of Transportation Secretary Elaine Chao recently released our third major document on this, called AV 3.0, which has expanded the discussion to multi-modal AV technologies.
Under our theme of “Empowering Americans to Innovate,” the biggest sub-pillar is around connectivity. We have a problem in the [United States]. There are 24 million Americans who don’t have access to high speed internet, and 80 percent of them are in rural communities. If we can close that gap, it presents huge opportunities for Americans—everything from access to telemedicine, to being able to start businesses at home. I went to Mississippi and heard from people struggling with this issue. That state has the lowest number of doctors per capita in the country. One specialist cannot drive all over the state. A connected community is critical.
But it’s very expensive to lay new fiber, and the return for a company may be tough. So earlier this year, a $600 million fund was appropriated to the Department of Agriculture to help solve this problem, and they’ve put out a request for communities and stakeholders to help decide how this money should best be deployed.
We’ve also already taken a number of executive actions around connectivity. One was opening up federal assets for deployment of commercial networks. Another dealt with regulatory streamlining. Now there’s a single form that can be used across the federal government for the permitting of broadband infrastructure.
A third action was around spectrum. We’re developing a new spectrum strategy for the country, which is critically important for the deployment of 5G technology.
At international forums, like the G7 and G20, we advocate for the free flow of data, and push back against localization and IP handover as a condition for doing business. The recent U.S.-Mexico-Canada Agreement (USMCA) was the first international trade agreement signed by the U.S., which included a specific digital economy chapter. That’s one of the reasons the administration talks about the agreement being one of the most modern and innovative trade deals ever signed.
On regulation and innovation
Technology is moving more quickly than regulators are able to. Often that’s for good reason. We don’t want to rush to regulation that doesn’t adequately account for all the issues associated with something. We were not allowing certain technologies to thrive in the U.S., which you could see when Google tested its drones in Australia, or Amazon testing theirs in the [United Kingdom]. But by the same token, there’s a real sense of urgency and of understanding that, as we sit here in Washington and work through our problems, the technologists in California and across the country aren’t stopping. They’re plowing ahead.
Kratsios will be onstage at Techonomy 2018 on Sunday, November 11, in a conversation with Techonomy CEO Josh Kampel. We’ll take questions and comments from our audience of tech and business leaders. Watch the conversation live at 5:30 pm Pacific time, at www.techonomy.com .