The Intersection: Technology, Economic Growth, & National Security

Transcript

[Music] good day everyone and welcome to our latest episode of the intersection where we get together and talk about topics of the day as it relates to the intersection of technology and national security we're joined today by eli dorado who is an economist regulatory hacker and senior research fellow at the center for growth and opportunity at utah state university prior to joining the cgo eli was the first policy hire at a supersonic aviation startup before that he was a senior research fellow at the mercatus center at george mason university and director of its technology policy program eli thanks for joining us at the intersection today well thanks for having me steve this is going to be fun so uh first off maybe tell us a little bit more about your background and how you end up as an economist and regulatory hacker i love that expression regulatory hacker so tell us uh how do you end up where you are sure yeah i think uh you know i when i was uh in my 20s i had this misguided idea that i wanted to be an economics professor and so i went down that road um and uh you know uh uh got you know got my phd and got started on my phd uh in economics at george mason university which was a great place to do it um and uh but somewhere along the along the path was like i you know sort of realized like oh no this is not actually what i want to do with my life is you know like sort of like writing writing um papers that uh you know only push the this sort of the state of the art so far which is kind of what's um what's what's valued in academia and um and so you know sort of as basically a way of uh you know procrastinating on my dissertation and so on like that and really just started writing online about technology and economics and and the related policy issues and uh you know while while i was doing that just sort of blogging sort of in my spare time sort of caught the attention of uh of of some people at the at the mercado center and got brought on board as a as a you know research fellow there to work on the technology policy program and uh i liked it so much i decided you know this is this is for me this is uh the right direction i want to go in in my career and uh you know a couple years later when the head of the department left i you know they they made me the head and and sort of that gave me options you know an opportunity to to shape that program and and to change a little bit the direction of that program and really decided to focus and and double down on um like growth in the issues uh related to the world of of atoms rather than the world of bits so really started to think a lot about um you know you know we have this when people think about tech in washington they think of you know facebook um not you know uh supersonic aircraft right and so uh so i decided to you know to sort of invert that and say well like i want to focus my research on how do we enable technology in the physical world and um and so uh you know i did that for a while uh including on supersonic flight i wrote a you know wrote a paper in in 2016 on on the barriers to bringing back uh supersonics over land uh eventually got hired on at um at boom supersonic as the as the first policy hire and and head of comms um and and spent uh a few years there uh you know sort of like leading leading engagement with with congress the white house faa ako european regulators and so on um so did that for a while and um and then a few years later time seemed right to to kind of go back into the nonprofit world and and uh do what i was doing before so landed at the center for growth and opportunity which is uh has been fabulous and uh you know i basically you know work very uh in a very focused way on finding out you know what what technologies could you know be transformative in in terms of their um their impact on on quality of life and on on uh economic growth and and figuring out how to how to unblock them from a policy level so that's that's what i that's like what my day to day is uh these days that's great eli so uh you first caught my attention uh uh at the beginning of this year and last year when you posted a blog post called notes on technology in the 2020s in which you looked at uh where you think the technology technology trends are going over the next 10 years and it was retweeted you know seven times in my twitter feed by people like mark andreessen and others so you know clearly you you hit uh uh a key message that was important to everybody uh um uh tell me what prompted you to uh uh uh make that blog post and were you surprised at the reaction that that you got in the twitter sphere from it um yeah so i i wrote that because uh i'd been sort of trying to make the case uh to a bunch of people uh on twitter and elsewhere um that you know we could be going a lot faster than than we than we have been in terms in terms of technological progress and uh you know i've been sort of making that case um in a in a sort of like a piecemeal fashion on twitter and and you know just discussing it with people and one of my friends um adam osmek was like hey you've you've got you've got to write this up as as like a post and so so it was actually he goaded me into it and and so i was i was like astounded by the the response i mean it was um you know a went super that was the most viral i think i've i've ever had anything uh go so um so yeah it was it was uh it was very interesting and unusual for it to to go uh that viral um but uh but yeah i think i think you know my my view in that in that piece is like there's a lot of opportunity for the us economy to to grow a lot faster and uh we just need to to seize it and for those that haven't uh read the post yet uh it's available on on your website i want to give a quick uh uh a shout out for for where they can find it uh yeah so that post is on my personal website elidorado.com great and and summarize uh quickly what are some of the key areas of technology innovation that you think we as a government entity should be supporting to drive economic growth well i think that like the probably the number one thing that's that's moving uh really fast is biotech i mean we saw it with the mrna vaccines uh with our response to the the pandemic when we want to go fast in biotech we can the science itself the fundamental science is proceeding really really rapidly and it's what's been lagging is the commercialization so um so biotech is probably the number one uh area um the you know in addition i think it's things like uh like energy technology and and transportation and um you know more broadly like stuff in the physical world um that that um that's important yeah and uh uh one of the points that i think you make is that it's your fondest wish to see gdp per capita reach uh 200 000 by 2050 you know explain to the audience uh why that's important you know and why that's the right metric to to focus on well so there's a bunch of metrics all related to gdp per capita that you could care about or you might think about like gdp is just like the output of the whole economy um higher gdp per capita would mean that we're wealthier you know uh you know each of us is wealthier uh than we are today which would be great um you know i think you can you could uh you know you could think about gdp per capita as just a metric of quality of life and and and so it's it's it's valuable on its own terms i think also like you know from a national security perspective you know more total gdp is correlated with winning wars so uh so that's important for national security like just being being having a big wealthy economy is important for winning wars uh you might you know there's some caveats about whether that's total wars versus proxy wars and whether it's total gdp or manufacturing ability but uh but more more output is is better from from a national securities perspective when gdp i think another underrated uh perspective on this is that when gdp per capita is is growing not even when it's high but when it's growing politics becomes more stable so uh you know we've seen sort of stagnation over the last 20 years and you've had you know politics in the u.s has been crazy so um so more stability uh that that you could get you know if everybody's life is getting better year after year i think is also really valuable and i think there's an another related metric that i focus on a lot which is called total factor productivity and that's you know that that's basically you know like gdp but it abstracts away a number of questions about you know how hard are people working longer hours or are more people entering the workforce you know um or you know what is the abstracting away from capital issues like what is the savings rate and so on and just looking at you know if you have a certain fixed basket of inputs um you know what is you know what what kind of how much output can you can you derive from those basket of inputs right and so so that's that's the number that ultimately i think uh we need to we need to tweak if we want to have uh you know really high gdp per capita and and you know unfortunately it's been sort of growing a lot more slowly uh since about in the early 1970s and and you know especially since about 2005 or so yeah and uh uh one of the things we that's been talked about a lot within the national security uh conversations in in washington dc these days is that we're entering into a new stage of nation-state competition where china is sort of our pure competitor if you will if you look at what china is doing they're they're pursuing a pathos or silver civ mule sieve mill fusion right which is is they're not thinking about this as there's a competition with the united states and military in this competition uh uh uh uh with us who's got the world's strongest economy they they look at the combination of the two and the fusion another two as a way to project power or project strength across the world here and so that's why i think what you're working on is so interesting is is you know if we want to maintain our preeminent uh uh position as as sort of the most powerful uh nation on the world which i think is good because we are pursuing a uh uh uh a a policy or a for a goal of uh democratic uh uh values and norms versus china pursuing a path of autocratic uh uh policy norms uh you know the strength of the u.s economy is inexorably interwoven into the strength of our uh military national security position uh would you agree with that and and and and from that do you see china doing anything from sort of uh economic policy uh uh uh development uh uh uh to pursue that that you know the us should be paying attention to so i yeah i totally agree with that and uh you know china is paying a lot of attention to what they consider critical industries like like things like semiconductors and uh you know aviation and aerospace uh stuff uh space um and so and they see these as like critical to um to being able to be uh autonomous and not dependent on on the us or the west and to be you know to get ready for and if if there were to be a conflict that they you know they would be in you know well positioned to win it right and and um and and you know they're they're focusing you know i we could talk about defense platforms as well right they're they're much more focused on uh you know being able to deny access to say the south china sea and we're building like these large uh military platforms that are more suited for the wars of the past um and so and so you know i think that they see [Music] they see it all as bound together and are very serious about becoming uh you know if if not the dominant you know a very strong uh globally secure uh superpower agree completely so let's dive into some of the areas of technology that you identified it was interesting that you brought up uh biotechnology first i think uh uh uh there's a senior official in china that was quoted as saying you know europe won the industrial revolution the united states won the information technology revolution we china want to win the uh biology revolution that we think is going to be the key you know revolution of the 21st uh century so uh um from your perspective dig in a little deeper about what are the key uh technology evolutions in the biotechnology area that we as a country should be focused on both for the way it will strengthen our economy but also the way that economic strength will help us from a national security perspective well i'm really struck by uh the fact that so many of the recent breakthroughs have to do with proteins um so uh so mrna vaccines right what they do is essentially they they sort of use our uh our cellular infrastructure to produce arbitrary proteins whatever protein uh is encoded in the in the vaccine and um and so so in the case of the the the coronavirus vaccines it's a it's a coronavirus spike protein that's produced um so so that you know that that's that's one protein related breakthrough and then another one was the protein folding breakthrough that was announced at the end of last year the the deepmind uh lab uh you know that's the subsidiary of of google or of alphabet um they you know they basically cracked you know to a really high degree of accuracy the problem of of how to predict the shape the 3d shape of a protein um based on on its linear definition right and if you put you know kind of combine that with with things like crispr which is you know editing genes which you know genes produce proteins again right so um we're kind of in a golden era of um of you know protein-related breakthroughs right like to the point where you could imagine in the future we can sort of design arbitrary proteins and that ability to engage in protein design i think could could unlock basically almost total control over all of biology because most of what biology is is is you know proteins like that like the other stuff is just there as fuel or a structure or or something like that but the proteins actually actually does the does the uh the the actual stuff of living so so really understanding that is is a breakthrough um and i think you know in terms of how we apply it i think that the most exciting go ahead there you go well i think in terms of how we apply it the most interesting space is in the longevity space right so so rather than treating um a whole bunch of diseases individually uh we could potentially treat the process of aging which is you know just which is um something that that gives rise to a whole lot of diseases cancer heart disease diabetes uh dementia you know all of those different things come on you know they correlate with with sort of biological aging well if you could attack biological aging directly you would you know you would extend lifespan you would compress morbidity you would reduce the uh you know sort of the total amount of resources we have to spend on just keeping ourselves healthy um and and you could you know that that would be revolutionary from an economic perspective if we attack uh aging and prolong uh uh life expectancy aren't we just shifting the cost out farther uh uh in the timeframe but don't the same aren't there the same cost associated with end of life that that exists today or how do we attack the uh uh how does that change that phenomena well it seems to be the case that as you uh as you shift uh aging you know to the right as you move it later in life you're actually you're you're extending lifespan to some extent but you're also to an even greater extent you're compressing the morbidity so you're putting all of the disease you know right at the end um and and so uh instead of having you know decades of of chronic illness and treatments and and so on that you have to go through it's like you know you're pretty healthy until you're you're 95 and then you kind of go downhill for a year and then you die uh and so so spending uh a lot less time in that sort of you know really uh really sick state or you know sort of chronically ill uh state that that could be a lot cheaper than you know you know a few decades of of managed care okay then um as a regulatory actor one a hacker uh i'd be curious on your perspective here one of the things that i read is that the modern and the physical vaccines were developed very quickly and then the whole you know the vast majority of the span of time from uh uh their development to actually being delivered into uh uh uh use was the whole regulatory process that they had to go through to get approved do you have thoughts on on so what uh things can be done to sort of uh uh um uh uh attack the the sort of regulatory process that uh to to shorten the timelines between invention or discovery and and deployment of these great biological breakthroughs well yeah i think you know it's hard to talk about medicines without you know reflecting on the fact that um that you know drugs have to be approved in advance like fully you know usually in under normal circumstances they're they're fully tested and and fully proven safe and effective uh from the get-go and so that's a huge barrier and um you know there's you know we've heard about moore's law and the semiconductor space but there you know a lot of people are talking about e-rooms law in the in the in the biotech space which is that that cost of bringing a new drug to market seems to grow exponentially over time right so it's it's not it's it's working against us not not in our favor and so a different way uh you know you could think about a whole number of different ways of of you know regulating safety in the biomedical space you know um you could prove you know you could pro prove uh safety and then you know the drug could be approved conditionally and then um and then continue the efficacy can continue to be monitored you know sort of on the market and that would be a way to to bring a lot of drugs to market a lot quicker um but there's there's a whole lot that we could do um to to accelerate and to reduce the barriers to sort of getting to market and to increase investment in the space great let's move to your next uh your second technology area that you brought up which is uh energy uh you don't have to be a uh uh uh avid reader of your twitter feed too uh for very long to before you realize how uh a bigger support of your geothermal energy so um uh and as our audience knows uh uh wars have been fought over uh energy right uh uh uh uh uh for a number of years so this is even more extremely linked to to national security so tell me what is your perspective uh uh on where the energy world is going over the next 10 or 15 years and and why are you so both optimistic and supportive of geothermal as the place that we should be uh putting a lot of our efforts yeah sure great um so in the last 10 years we've had you know massive cost reductions in in wind and solar and that's been phenomenal um but those are you know uh as you know intermittent sources they you know they require a lot of land area and so on so they they have they're not the sort of the holy grail of energy you know geothermal comes pretty close to being the holy grail of energy in terms of the amount of the resource that there is there is you know there's more geothermal energy than you know all of the fossil fuels all of the uh you know the the fissionable material on the planet um etc like you could you know add add all that up and geothermal is still you know just the crustal energy uh is something like 40 40 times more than all the fossil fuels and fission energy combined so it's it's a massive resource um it is base load energy so it you know it's it you could um you know use it to power everything 24 hours a day um and we're not going to run out of it and with with technology improvements it could be available anywhere on the planet so you could you know if you uh you know wanted to power uh you know say barrow alaska right that's you know dark six months of the year um you know you can't do that with uh with solar panels so uh but you could do it with geothermal if you know if we if we make the right technology breakthroughs so it you know it's like the one problem if we crack it uh we have you know very cheap uh clean abundant uh energy and and all we have to do is learn how to drill deep enough fast enough cheap enough the other good thing about it uh uh shows implied in your answer is that it's available in the united states so we don't have to uh import it from other countries we can control we can control our own uh uh uh we can supply our own energy needs which is an important element to being a stable and safe country so so that's obviously uh uh very desirable as well my sense is that geothermal and nuclear are the two uh uh clean uh uh energy sources that have the scale to meet our energy needs and have have the economics that are usually uh uh uh uh uh doable uh uh uh for our needs as well but the challenge with uh nuclear is there's a lot of regulatory issues associated uh uh with it uh uh uh does geothermal have some of the same regulatory uh issues associated with that and what's the state of the world there you know geothermal doesn't have like really the sort of the safety or the nonproliferation issues that that nuclear has um it does have like there are some like permitting obstacles right so getting especially um the you know the best places that the the lowest hanging fruit for geothermal is on federal lands uh because uh over just federal lands happen to overlap you know out west with a lot of the best areas for for geothermal and operating on federal lands uh means you have to go through you know a bunch of permitting processes you know permitting to explore then permitting to develop and so on and and each of those uh federal decisions to grant a permit you know requires an environmental uh analysis and and those uh those environmental reviews can take can take years so it's it's um it's it's not the same kind of regulatory obstacle that nuclear has uh where you have an entire agency that's that's sort of devoted to uh closely regulating it and limiting it um but it is so it's it i think i think it's not a show stopper the you know the the permitting obstacles but it is slowing it down and if we fixed it we could go a lot faster another area that you oftentimes uh uh post about is uh space and uh aviation and uh as you know our country uh national security relies a lot on uh collection platforms in space or on airborne uh platforms what trends do you see happening over the next 10 years in those sort of related industries well the the story in space i think is is about starship you know starship i think people still it still hasn't dropped on people just how revolutionary spacex's uh starship uh vehicle is going to be um you know it's it's uh basically going to be the thing for the audience again what starship sure starship is is basically uh yeah starship is a you know 150 ton uh payload to low earth orbit uh rocket the biggest one ever developed uh it's fully reusable built out of you know cheap manufacturable materials you know designed to be manufactured at scale uh it's uh you know uses uh liquid methane fuels which are cheap it uses uh it's refuelable on orbit so it can uh it could take your your 150 ton payload that you launch to low earth orbit can uh can then be you know you can refuel it and go a lot farther you could go take that same payload to the moon or or mars uh or beyond um and so it's um it's just being designed for a scale of space operations that is you know sort of beyond the imagination of of most people um you know like a falcon 9 rocket today in a reusable configuration will take payload to orbit for something like 2500 a ton or 2500 a kilogram sorry uh to orbit and and you know spacex is saying or elon musk is saying that starship you know at scale operating operating you know sort of rapid with rapid reusability you could get to something like ten dollars a kilogram so like a 250x uh cost reduction in in the cost of payload to low earth orbit i mean that that is transformative and and it's going to enable us to completely change the way we do development in space you you know uh going going to orbit is becomes like going to europe um it it becomes really cheap um and and and in terms of what kinds of space vehicles you can launch uh you know you could you don't have to design with you know expensive solid-state materials uh and mechanisms you can you can use mechanical mechanisms that have a chance of breaking and that you could you know just if it goes wrong you you just fly something else up and and replace it because it's not that expensive anymore so i think i think you know starship is going to be absolutely transformative for the for the space industry and um and and and you know so we need to plan for that right it's it's it's a it's a it's a transformative capability and and we need to take advantage of it to the to the maximum extent possible right and then uh uh another area that you wrote about in your blog post was uh custom chips that was a trend that was going to happen over the next 10 years uh microelectronics uh is obviously very important to our national security uh uh all those microelectronics are manufactured and developed in in taiwan and other parts of uh asia right now uh uh so there's an uh uh area of concern for for all of us you know tell me uh why you uh focus on the custom chips out of this well if you think about the history of computing right you had you had you know individual transistors and then you had you know integrated circuits and then so the the thing that makes sense as the as the continuation of that trend is just put everything on you know all aspects of the computer on on or many aspects of the computer on the same chip right and we're seeing companies like apple do that with their their new m1 uh you know chips that uh that power you know some of their newer laptops and other computers and they're just getting rave reviews because they're just so much faster than than what was you know what was available before um and you're seeing you know companies like tesla for their uh their autopilot systems their you know most advanced autopilot self-driving computers um whether or not they're actually self-driving yet is a different question but the sort of the the computational back end of that is you know being manufactured as a single chip and that is um you know that that yields uh many efficiencies and we're seeing also in machine learning the design of specialized you know wafer-sized uh machine learning chips that um that enable you know much much better uh machine learning machine learning model training and so you know you put that all together i think it's it's pretty clear the way the industry is going to go is you're going to you know basically if you want to play in the in you know any sort of computationally intensive space or any sort of space where you you need a very high uh performance to energy use ratio right you're going to want your own your own custom computer on the ship system on a chip that um that does what you need and so uh so yeah so i think and you know in terms of being able to manufacture that the us is is behind i think as you said this is all mostly manufactured in in asia and you know we need to probably redevelop that capability in the united states absolutely and and the endless frontiers act which uh congress uh uh recently passed is i think going to be a big step forward to uh uh to our attempts there um one last topic here on the technology side uh cryptocurrency i think you're a bitcoin uh supporter and fan uh tell me why you're you're bullish on that and then uh uh the next topic as relates to that is you know have you paid attention to what china's doing in that space because uh uh they're making some strategic moves in that area that i think we can talk about but first uh just in general why why are you bullish on on bitcoin well so i'm not bullish on bitcoin i i do like uh cryptocurrencies in general but um i think bitcoin is is too bitcoin is itself right is is too static to uh you know it's not doesn't have very many features and so i've been i've been following ethereum a lot more and and there's a bunch of other um you know sort of projects out there that are trying to be ethereum killers and and you know maybe they're interesting as well um but uh you know i think like like like bitcoin is like a landline telephone and like i'd rather have that if i you know if i didn't have anything i'd rather have that than nothing but uh but then you know if you compare that to like a late model iphone right like you'd much rather have the the more features that are available in in other cryptocurrencies more and more i think i'm thinking about i'm envisioning the financial system of the future as being you know uh you know sort of banks or or fintech companies on the front end but then using the sort of the a system like ethereum or or one of its uh you know successors um as as rails on the back end right so you can have a financial system that is um that's that's open that is efficient that you know settles things settles uh trades quickly that um that is able to do atomic swaps of of various assets that um that you know allows for a lot of innovation and and you can have it be a completely open decentralized system um that is open to the entire free world right and so to me that's that's a really compelling uh vision um that uh that we could have and and i think uh you know i think sort of the fundamental enabler of that is smart contract technology which is being developed on on blockchains um like like ethereum and others and so i think the you know the question is you know we're still a long way from that and the question is you know how do we how do we improve the usability of these of these systems the scalability of these systems like that's that's the really that's the hard part right now and um and when we get there you know you can you could you could have really uh a big improvement over today's uh financial system so uh cryptocurrencies in general and certainly anthony built on block uh chain are decentralized uh open systems uh onto some of the phrases that you used in your previous answer um those are not uh uh adjectives that are uh uh looked on very favorably by authoritarian states such as china and so the recent news uh is that china has kicked out a lot of bitcoin miners uh uh that they're trying to in essence uh uh uh uh get bitcoin out of their country and they're instead backing a centralized uh digital currency that that would be state controlled uh uh uh uh by them for avi and that would obviously you know uh uh feed into their whole surveillance state uh uh uh infrastructure that they're uh uh building over there um what's your take on what china's doing uh uh and you know can a nation state really exert any true control and influence on on on any of these cryptocurrencies or will the the openness and the decentralization of uh bitcoin or ethereum or any other blockchain based uh currency ultimately went out over a centralized state-based uh uh digital currency a great question so um so china is you know as always it's a little bit of an enigma to understand what's really going on there but i think they're interesting because you know at the level of xi jinping right they've they've been talking about uh about smart contracts and about you know about the you know being learning you know china it's a priority for them to understand this this technology and uh and move it forward um and they've been experimenting with a digital yuan that um that can only be spent for certain goods right so so something like a food stamps uh but that's that's you know sort of this uh digital currency that they're they're they're playing with um and i think you're absolutely right they want to use it for surveillance for control uh et cetera um the the the kicking out of the the miners uh you know that i don't know that exactly what signal that sends like that doesn't i think that they could just be thinking that they don't on one hand it seems like one possible interpretation of that is that they don't think that mining specifically is a valuable industry for them to be uh involved in uh in terms of uh the amount of resources that it uses you know their of their electrical grid and so on um so that that could be um that could be one interpretation of it and the the other interpretation is that they don't want to have anything to do with with these with any open blockchain i don't think that that is correct i think that they i think they want to keep tabs on the open block chains as well um so so you know we'll see if they actually shut down the other aspects of cryptocurrency um but but ultimately you know network effects in in payment rails are pretty strong in terms of you know uh there's there's hundreds of currencies around the world but there's how many credit card networks like many fewer right and so so payment rails have very strong network effects and i think uh people are going to want to be on the on on sort of the big ones right there people are going to want to be on on on bitcoin on ethereum and on maybe a handful of others so um so i i think you know the idea of you know china creating their own blockchain system i think is i think they're gonna they're gonna struggle to do that and they they have the advantage of being able to just coerce people to to do that but but you know sort of in a natural state uh where people have a choice of what to adopt it's it's going to be it's going to be very challenging great well i think we hit on a lot of the um uh technology topics that uh i picked out from your uh writings and postings that i think are pertinent uh uh to our audience here at the intersection of national security and technology anything you think i've missed on or any other uh uh points you think we should hit on before we wrap up here um no that's it's uh yeah it's been it's been great to chat great well listen uh eli thank you so much for joining us at the intersection uh it's been another fantastic uh uh uh conversation here uh i think you mentioned your uh url earlier uh uh your personal url earlier in uh uh uh the broadcast here but do you want to also uh let people know what uh your twitter account is if people want to get inspired by our conversation wanna go follow you on twitter sure yeah so you can follow me on on twitter at eli dorado and on the on the web at elijah.com and uh some other stuff at the cgo.org for the center for growth and opportunity great well thank you so much eli we really appreciate you once again join us in the intersection and we'll be back in a couple weeks with our next fantastic guest thank you very much everybody [Music] you