Technology-Powered Public Goods are Possible—With Strategy

The world’s most dangerous technologies are built on scientific advances that also promise enormous opportunities for human development. This core tension is visible in a wide array of dual-use technologies—innovations that have roles in both private markets and national security. The Internet, for example, can facilitate democracy or repression. Satellites can support catastrophe response or population surveillance, and drones can carry life-saving medicine or life-ending payloads.

Whether a technology is capable of benefiting society as a whole, enhancing national security, or both, depends on how governments respond to and prioritize societal challenges, private-sector interests, and national security goals. This, in turn, depends on how governments think about the technologies themselves—their capabilities, and the nature of the incentives to develop them.

Two important emerging technologies—digital currencies and artificial intelligence (AI)—are especially illustrative cases because their functions are so fundamental, their implications are so far reaching, and their trajectories are being actively shaped by U.S. competition with China. Ensuring these technologies are used to promote human wellbeing is critical and will depend on whether governments are careful, proactive, and research informed in their strategies to intervene in and support the development of frontier, dual-use innovations.

Revisiting the Design of Money

Digital currencies are a recent example of the tension between societal good and national security and show how geoeconomic competition influences which road governments choose to follow. Some countries (like El Salvador) have chosen to recognize cryptocurrencies like bitcoin as legal tender; others (including the United States today) have considered strategic reserves for digital currencies; and yet others (including China) have instead pursued their own sovereign digital currency projects.

Progress in digital currency has been breathtakingly swift. In less than a decade, digital money went from being a technical hypothesis (2008), to a real digital token (2009), to a market for equity offerings (2013), and eventually to an instrument of national economic policy (2014) in the form of central bank digital currencies (CBDCs), a sovereign version of digital money backed by the full faith of its issuing government. The remarkable pace of innovation is due not only to the fact that blockchains are more efficient and transparent transaction intermediators. It is also because governments and the private sector, through policies and investment, made them more efficient.

While most governments are now actively exploring the use of CBDCs, projects differ in pace and design, as well as in the extent to which they align with, or radically depart from, today’s banking structures. The implications will be wide-ranging, from the opportunity for consumers to hold bank accounts directly with central banks (cutting out retail bankers), to the possibility for countries to push against the dollar-led global economy with new, faster clearance systems that counter the U.S.-managed SWIFT system for global payments.

China’s work in this space, which dates back to 2014, is a strong example of state-led investment, experimentation, and technology deployment in digital currencies. The digital yuan, China’s CBDC, is a well-known example of a digital currency that directly marries domestic goals (financial inclusion) with global security goals (offsetting regional U.S. dollar hegemony). China’s early movement in the digital currency arena has not only catalyzed substantial coordination across Asia on this and related issues, it has also forced quicker movement among otherwise skeptical Western states. China’s model hinges crucially on extensive research around digital currencies’ true capabilities and the design choices that foster them, and years-long, structured projects built around those insights.

In contrast, late movers like the United States have proven substantially less effective at finding and pursuing win-sets in their global goals and domestic challenges using digital money. Whereas some major economies have already launched sovereign digital money to consumers and banks, the United States remains in a sluggish state of narrow research and limited experimentation. Not only has the United States failed to spur major research on this topic—with limited academic collaborations providing no tractable prototypes—the American government has failed to enunciate its goals with regard to digital money in a way that would allow these research programs to succeed. In sharp contrast, the current administration is focused not on leadership in developing and pursuing CBDCs, but instead on promoting development of private digital currency solutions, and development of a strategic stockpile of major crypto tokens. This approach delegates to profit-seeking financial institutions the design choices about digital currencies, and by extension, limits their opportunities to meaningfully serve the public good.

Competition at the Frontier of AI

Artificial intelligence, in contrast, provides a real-time example of the dynamic interplay of private-sector interests and national security goals in the very early stages of technology development. Since ChatGPT’s release in 2022, governments have raced to directly support and align this emerging technology ecosystem with their domestic and international goals. The technology can famously be applied to a huge variety of areas, including things that benefit human wellbeing—like researching medicines and optimizing disaster response—and things that enhance national security, like cybersecurity and scaled intelligence gathering. Unlike digital currencies, AI’s dual-use capabilities also include offensive changes to the global security ecosystem: systemic misinformation, autonomous weapons systems, and scaled transnational surveillance and intelligence gathering, among others. As a result, governments have moved fast to support AI research, development, and use, and the balance between domestic and global goals has become even more difficult.

Here again, U.S.-China competition has had a direct role in AI’s development. China’s direct support for companies that have outperformed Western AI firms has not only raised concerns about market asymmetries in competition—it has also triggered fear over China’s potential dual-use applications of AI in pursuit of domestic and global political goals. As a result, the European Union and the United States have moved rapidly to support their domestic industries in this space and internalize AI capabilities into their national security apparatus. The United States, for example, has pursued what is arguably its first large-scale industrial policy for technology around AI with the 2017 CHIPS and Science Act and more recently extending with the Stargate computing project.

Public Goods are Possible—with Strategy

Both digital money, and artificial intelligence are geoeconomic flashpoints with high costs of failure. Whoever leads in these technologies will alter the global distribution of power in their favor and have the potential to maximize the benefits of innovation for the public good. But putting technology to work for both ends isn’t inevitable. Whether digital money can systematically serve the United States’ millions of unbanked individuals, or whether AI can foster scaled research to cure cancer and other diseases, depends on the direction states chart today.

The path to prosperity through technological advances must pass through the often-messy arena of geoeconomic competition. Only through careful, proactive, and research-informed strategies can states typically achieve a balance between their geoeconomic interests and true public goods within and outside their borders.

China has proven to be a global leader in centralized technology development, but its approach offers insights even for unplanned market economies like the United States. Its model in AI closely mirrors its approach to digital money. First, the government coordinated extensive technical research with private sector labs on how AI maps to real-world activities. The government also leveraged state-owned firms and public-private partnerships to effectively deploy and scale the use cases for AI throughout the economy with intentional focus.

The United States has, until recently, pursued a contrasting model of decentralized market innovation. This has seen China’s firms rapidly outcompete Western labs, introducing both private sector pressures from asymmetrical competition, and new geopolitical opportunities for China’s use of AI in international affairs like trade, information warfare, and more. While the United States does not have any state-owned AI labs, it is clearly warming up to the role of the state in technology development with new compute investments and protections on technical inputs.

To ensure that emerging technology improves both national security and the public good, countries need be proactive and research driven. The United States, and all countries that strive to secure democratic norms and improve the human condition, can play an important role here. But this will require leaders to take a wide lens to the true landscape of what new technologies can achieve—which requires cutting past the hype of the firms that develop them and integrating social and economic insights from all corners of society. Funding new data centers is important, but insufficient. Developing a plan to use them is what counts.

Geoeconomic competition is nothing new, and has brought great progress through technical advances throughout our history. The task before us now is to secure these goods more deliberately, working with the tides of great power conflict rather than against them.

Tim Marple is co-director of AI research at Maiden Labs, an editorial board member for Business and Politics, and an associated researcher for the Berkeley APEC Study Center.

Thumbnail credit: David Baillot / UC San Diego