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The federal government funds a lot of research and development each year, but not all of it – not even most of it. Yet protection of R&D intellectual property from foreign adversaries – that’s a concern for both government and industry. And that raises the question of how far the government should go in trying to secure private R&D. For one answer, Federal Drive with Tom Temin turned to the senior fellow at the Georgetown University’s Center for Security and Emerging Technology, Melissa Flagg.

Interview transcript:

Tom Temin: Dr. Flagg, good to have you on.

Melissa Flagg: Good morning. Great to be here, Tom.

Tom Temin: And your report has outlined how in some sense, smaller role, the federal funding plays in R&D nationally, give us a sense of the numbers and how they’ve changed over the years.

Melissa Flagg: If we were talking back in the 70s, we’d be talking about the federal portion of American R&D being well over two thirds. But today, the federally funded portion of American research and development is like 22% to 23%. Over three quarters is nonfederal, and even in basic research, well over half is not funded by the federal government. So while the federal government’s role is critical, and protecting that is necessary, it’s really not sufficient.

Tom Temin: So there’s basically a dichotomy here: One, the government has an interest in protecting intellectual property, national security, economic benefits of R&D, but most of it is out of the government’s hands. So some of the government’s methodologies have got to somehow accommodate the fact that the aims might be the same for private and federally funded but methodologies might not be the same, or you tell us?

Melissa Flagg: Absolutely. I think that traditionally, because the government played such a large role, most of our approaches to thinking about security, really focused on the funding that came from the federal government. And that tends to be law enforcement approaches, disclosure, making people say if they have a relationship with a foreign government when they receive federal funding, and these are all important approaches. But when you’re talking about nonfederal funding, you now have to almost think about a domestic set of alliances of partnerships, where we really have to start having a conversation with industry, with philanthropies with academic endowments – all of these sources of research funding, and having a conversation about how they’re personally affected by bringing people in who are going to steal not only their intellectual property, their tacit knowledge, but access their networks. And so thinking about public-private partnerships, or even information and data sharing structures that can allow some new conversations to happen are critical.

Tom Temin: And what about the idea of sharing technical expertise and information about hacking methodologies and so on, that might happen between, say, Homeland Security and the R&D sector, similar to what is in theory, at least supposed to be happening between various industrial sectors and Homeland Security?

Melissa Flagg: Absolutely, Tom. In fact, one of the examples we use in this paper is the collaboration that’s happened around cybersecurity. This is a place where completely disclosing what’s happening to you is not good. You don’t want everybody to know where your weaknesses are in your network. But on the flip side, you really do want to lift the security for all of the United States, for all of industry, right? And so being very thoughtful about how we bring sectors together with government, but also with I think, much broader groups of folks like academics, who can help us tackle these problems in creative ways, is really important. But if the government comes in using a punitive approach, it makes it much harder for people to feel bought in to creating the solution together.

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Tom Temin: Sure. And there’s still kind of a basic mistrust in many scientific quarters just for that kind of, any sort of government intervention.

Melissa Flagg: I think it’s reasonable. Historically speaking, we’ve really tried to protect this openness that a bottom-up system like America has benefited from. The ability to take the science wherever it goes, and to be as creative as you are capable of, and not being limited by the ideas from other people who are not experts in what you do. So it makes sense. But on the flip side, we need a culture of security that realizes it’s security for each of us, right? We’re securing our own intellectual property, our own economic security, and that is actually what gives us national security.

Tom Temin: We’re speaking with Dr. Melissa Flagg, she senior fellow at the Georgetown University’s Center for Security and Emerging Technology. A report cites a findings from a group of scientists dating to 2009 and in the ensuing 10, 11 years, 12 years since that report, a lot has changed vis-à-vis the relationship with China, and also what we know about China’s real aims with respect to R&D in the United States. So what are some contemporary ways out of this such that we can protect everybody’s research, and yet many ways, often there are Chinese collaborators in research coming openly to US universities and think tanks.

Melissa Flagg: I think that one way is to really begin to reframe this question through the lens of risk assessment, as opposed to the leaving that you can assess each individual person. Counterintelligence gives us a lot of insight into this, that some of our biggest threats are actually the insider threat, they’re not the foreign threat, right? This is not to diminish the reality that we have an adversary that is stealing our research. So let’s be very clear on that. However, the risk assessment, in my opinion needs to be done in a nuanced way that is in the context of the decision, or the action you are taking. So if you’re hiring someone to come in behind your firewall, and have access to your networks, your tacit knowledge and all of your IP, you are going to have a much higher bar of making sure the folks you hire don’t have ties to foreign governments that may pull that back, patent it without you knowing it in other countries, and use it for military purposes and adversary nations. But if you’re simply collaborating with someone intellectually, and all of that information will be published publicly anyway, within three months, that bar for the threat of engagement is lower. So I would just encourage us to begin a conversation with the private sector that helps them walk through contextualizing their own decisions, and leaning into security as a culture rather than as a punitive thing imposed upon them by the government.

Tom Temin: And that patenting issue is a key one, because recent studies by the Patent and Trademark Office show this burgeoning number of patent applications being filed in China, which may or may not have effect. In other countries, there’s, you know, a system of large countries that share and cooperate on patenting. And the significance there is that even if it’s only good in China, that particular patent, that could leave out American innovators who want access to the Chinese market. So it does have potentially at least pretty grave economic consequences if something is lost to Chinese patenting system, even though it will be open in the market fairly soon – the intellectual property itself.

Melissa Flagg: Absolutely, when you’re looking at areas of research that are much closer to economic conversion, right, to actually coming into a product space, I think it is a very different conversation about collaboration. And actually, we’re working on some research now to look at the variation of percentages of international collaboration across different areas of research. Because it’s not homogenous, and it’s not homogenous across countries. Some countries are much more collaborative across all areas, and other countries have a wide variability. What we find in a preliminary approach to this is that the US and China actually have a pretty wide variation, both between them, and also across different research areas. In engineering, it’s lower than in say, condensed matter physics, right? And so you get very big differences. And that’s okay, that’s good. The patenting question is a really interesting one, because in the US system, we have a large focus on prior art, we have a legal requirement to disclose prior art. So if I know there’s a patent in China already, I have to disclose that on my patent. And that might – may affect even my ability to get a patent here in the US. So we don’t really know what the effects of this increase in patenting in China are going to be. Right now, a lot of these are patent applications. And we don’t know what the rate is for going from an application to an actual granted patent. But this is definitely something that we’re watching and we’re doing active research on at CSET.

Tom Temin: And finally, you have described a cooperation, say with the Office of Science and Technology Policy, a designated agency such as the National Science Foundation, NIST, to cooperate with the National Academies, the American Association for the Advancement of Science, and so on. Lots of institutions here that impinge, that would create some kind of a structure outside of the government. But yet the government could help design it, is that what you’re suggesting?

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Melissa Flagg: [The] feeling is that these institutions have a long history of trust and credibility with the technical community. And so by working with these groups to find a home in a nonprofit sort of, maybe association-affiliated space, or unaffiliated space, where you can have industry at the table, nonprofits at the table, and government as a player at the table, but not as the person in charge, and joint funding, matching funding coming from across these sectors, and data sharing coming from across the sectors – maybe we could get creative and even convince Elsevier or Thomson Reuters to bring some data to the table, right? We could really create some interesting solutions that have all of America in mind, not just the federally funded science.

Tom Temin: And I guess the good thing is that when federal scientists attend scientific conferences, they go as co-equal colleagues and wouldn’t presume to be the leadership. But when you get into law enforcement and FBI and Homeland Security, they kind of want to run the show. So you’ve got clash of cultures here a little bit.

Melissa Flagg: Absolutely a class of cultures. A very different approach to openness, and a very different approach to punishment.

Tom Temin: All right, good thought to think about. Dr. Melissa Flagg is a senior fellow with the Georgetown University’s Center for Security and Emerging Technology (CSET). Thanks so much for joining me.

Melissa Flagg: Thank you.

Tom Temin: We’ll post this interview along with a link to her study at FederalNewsNetwork.com/FederalDrive. Hear the Federal Drive on your schedule, subscribe at Apple Podcasts or wherever you get your shows.

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