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Venture Capital Gives America a Strategic Edge in the Age of Technology Wars

By March 27, 2023No Comments

Since the Cold War, America’s technological leadership has provided the U.S. military a qualitative advantage over its adversaries. That edge is now threatened by China’s rapid development of technologies with both civilian and military applications.

U.S. early-stage hardware startups are seriously disadvantaged by a persistent lack of financing. Meanwhile, China has been pouring money into Chinese—as well as U.S. and European—tech startups.

Recognizing this problem, Congress authorized the U.S. Department of Defense to spend $75 million to invest in dual-use hardware startups. However, the Pentagon has proven reticent to embrace a venture capital–style approach, even though research has demonstrated it is optimal for driving innovation.

 

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