The United States has long been a global leader in military, economic, and technological strength. Yet, in the rapidly evolving 21st century, power depends less on traditional resources and more on knowledge, technology, and innovation. The U.S. is facing significant challenges in each of these areas, which threatens its position as a global powerhouse. To understand these shifts and address them, U.S. policymakers and institutions must recognize that the nation’s strength now rests on a foundation that is showing signs of strain.
Knowledge: The New Global Currency of Power
For centuries, nations built power through tangible resources such as armies, territory, and natural resources. However, today, power lies increasingly in knowledge and technology. These assets fuel economic growth, scientific discovery, and military might, making them as essential as traditional resources were in the past. Artificial intelligence (AI), biotechnology, and cybersecurity are prime examples of knowledge-based assets that contribute to a country’s influence on the world stage. They not only enable economic advancement but also empower nations to protect their interests and project their influence across borders.
However, unlike traditional resources, knowledge is difficult to control. Algorithms, scientific discoveries, and technological breakthroughs can easily spread globally and quickly fall into the hands of allies and adversaries alike. For example, the U.S. can no longer simply retrieve information or technology that has “escaped” into other nations, as it could once demand the return of downed military equipment. Knowledge itself has become a kind of “portable weapon,” challenging the ability of any government to regulate it effectively.
Rising Competition in the Knowledge Economy
The U.S. is no longer unrivaled in knowledge and innovation. Many countries have made substantial progress in closing the knowledge gap. China, for instance, has become a formidable competitor. In 2022, Chinese scientists published more highly cited research papers than U.S. scientists, marking a shift in global scientific leadership. Countries in Europe and Asia, including South Korea, Singapore, and Germany, now rank at or near the top in fields critical to technological advancement, such as AI, quantum computing, and biotechnology.
A country’s ability to innovate depends significantly on the quality of its education system, especially in the fields of science, technology, engineering, and mathematics (STEM). Here, too, the United States is facing mounting challenges. International assessments reveal that U.S. students consistently lag behind their counterparts in countries like China, Singapore, and Finland in math and science. This educational deficit poses a serious risk to the United States’ future innovation capacity and, consequently, its economic and national security.
Educational Weaknesses Threaten Innovation Capacity
The quality of U.S. education, particularly in K–12, is at an all-time low. National assessments show that American students are performing worse than they have in decades. In 2023, national reading and math scores for 13-year-olds hit their lowest levels in decades, with nearly half of U.S. students unable to meet state proficiency standards. These issues are not new; the decline in performance began well before the COVID-19 pandemic and has only worsened over time.
On an international level, the United States ranks poorly in essential STEM skills. In 2022, the Program for International Student Assessment (PISA) ranked the U.S. 34th in mathematics proficiency, placing it below countries like Vietnam and Slovenia. This deficiency is not merely an educational concern but a strategic vulnerability, as math and science skills underpin technological advancements that are essential for national competitiveness. For instance, only 7% of American students scored at the highest level of math proficiency, compared to 23% in South Korea.
Even high-achieving U.S. students often fall short compared to international standards. Massachusetts, which ranks as the top-performing U.S. state in mathematics, would rank only 16th if it were a country. Lower-performing states, such as New Mexico, lag even further behind and are comparable to countries like Kazakhstan. These disparities illustrate a widening gap in the U.S. educational system that, if left unaddressed, could undercut the country’s ability to compete globally in technology and innovation.
Higher Education: From World Leader to Global Competitor
American universities, once the gold standard in higher education, now face increasing competition from institutions abroad. Many students from countries with advanced STEM education systems, like China, come to the U.S. for higher education. However, outdated immigration policies make it difficult for these highly trained graduates to stay and contribute to the American economy. Consequently, the U.S. spends considerable resources training foreign students only to send them back to compete against American companies and researchers. In 2022, only 32% of doctorates in computer science and electrical engineering from American universities were awarded to U.S. citizens or permanent residents, down from 78% in 1980.
The global appeal of U.S. higher education is also weakening. Foreign universities have improved significantly, providing strong alternatives to U.S. institutions. Consequently, more international students, particularly from China, are opting to study in Asia or Europe. The result is a diminishing talent pool in the United States, which could impact future research and innovation capacity.
Private Sector Gains Versus Public Sector Losses
The private sector has always played a crucial role in U.S. technological advancement, but its influence is now creating a paradox. Large technology firms like Google, Microsoft, and Meta are driving rapid progress in AI and other technologies, but they do so with an eye toward profitability rather than national security. The lure of private-sector salaries and resources is drawing top researchers away from academia, where they might otherwise contribute to foundational scientific research. This shift is having profound effects on academia and national interests, especially as AI Ph.D. graduates overwhelmingly choose industry over academic research, limiting the pool of qualified faculty and mentors for future generations.
This brain drain from academia to industry has severe implications for U.S. innovation. In some top U.S. computer science departments, up to half of the senior AI faculty have transitioned to industry positions. Consequently, basic research—the type of long-term, exploratory research that often yields breakthrough technologies—is underfunded and understaffed. Without a strong academic foundation, the U.S. risks losing its edge in future technological developments.
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Decreasing Federal Investment in Research
Federal funding for basic research, which fuels the country’s long-term innovation engine, has steadily declined. During the mid-20th century, the U.S. government made significant investments in research that led to foundational technologies such as the internet, GPS, and medical advancements. However, federal research funding as a percentage of GDP has fallen from a peak of 1.9% in 1964 to just 0.7% in 2020. By comparison, China spent 1.3% of its GDP on research in 2017, and its investment has continued to grow.
The CHIPS and Science Act, passed in 2022, was supposed to reverse some of this underinvestment by allocating billions of dollars to science and engineering research. However, much of this funding was later removed during budget negotiations. This underfunding of basic research limits the potential for breakthroughs that could secure America’s technological and economic future.
The National Security Implications of Educational and Research Decline
As education and innovation stagnate, the implications for national security are profound. The U.S. military has long depended on a steady stream of technological advancements to maintain its superiority. However, bureaucratic inefficiencies and budget issues have stymied the Department of Defense’s ability to develop and deploy new technologies. A significant portion of the defense budget goes toward maintaining outdated systems rather than investing in new, cost-effective solutions. This outdated approach hinders the development of advanced technologies, putting the U.S. at a disadvantage in a rapidly evolving security landscape.
Moreover, the nation’s intelligence agencies are now faced with the task of assessing both traditional military threats and the implications of emerging technologies, such as AI and quantum computing, on global power dynamics. This shift requires a new set of intelligence capabilities and a closer relationship between the government, private sector, and academic institutions to ensure that the United States can anticipate and respond to technological threats.
A New Strategy for Knowledge Power
To regain its edge in knowledge power, the United States must prioritize several key initiatives. First, establishing a national computational reserve would enable academic researchers to access high-performance computing resources, essential for cutting-edge AI research. Currently, only a handful of large companies can afford the computational power needed to develop advanced AI models. By providing this infrastructure to public researchers, the government could level the playing field and encourage innovation that serves the public interest rather than just private profit.
Second, reforming the U.S. immigration system to allow more international students to remain in the country after graduation would secure a steady influx of talent. Immigrants have long been critical to American innovation, founding nearly half of Fortune 500 companies, including industry leaders like Google and SpaceX. Adjusting visa policies to retain these individuals could bolster the talent pool in critical STEM fields, which is increasingly essential to U.S. competitiveness.
Finally, Congress and the Department of Defense must streamline the defense budget process to ensure more funding for innovation. Shifting focus away from outdated military systems and investing in new technologies would enable the U.S. to respond to emerging threats more effectively. Additionally, by reforming teacher pay structures and incentivizing top talent to teach in underserved areas, the U.S. can address the educational weaknesses that threaten its long-term stability.
Conclusion
As the 21st-century global landscape evolves, so too must the U.S. approach to power. The erosion of America’s educational and technological base is a silent but growing threat to its national security and economic future. Without immediate action to strengthen its knowledge infrastructure, invest in basic research, and address educational disparities, the United
States risks ceding its leadership to competitors who are better prepared to thrive in a knowledge-driven world. By recognizing knowledge as the bedrock of modern power, the United States can rebuild its foundations and secure a prosperous, resilient future.
