The fitness industry is in the midst of a digital transformation. Fitness, like just about every industry from transportation to leisure, has witnessed the emergence of digital as a force for change, and brick and mortar gyms are having a tough time keeping pace. Entire companies have been successfully launched to capitalize on the rise in digital fitness, as evidenced by the popularity of companies such as MIRROR Home Fitness, Peloton, FiiT, and SWEAT. These are just a few fitness providers that have leveraged digital technology to engage audiences that are looking for customized fitness experiences that meet their individual schedules and routines.

We have Jane Fonda to thank for bringing fitness into the home back in the ’80s with her Original Workout video on VHS that went on to become the biggest selling video of all time. Fast forward 40 years, and we can thank technological innovation for taking home fitness to a new level.

But there is another factor at play which speaks to the preferences of Generation Y/millennials and Generation Z, who account for almost 50% of all health club members: These consumers have a preference for on-demand services and are less attracted to locking in annual membership fees. Remember, it was the recurring annuity stream of yearly membership fees that attracted private equity to brick and mortar gyms, which need stable and predictable cash flow to service debt and to cover high operating expenses. Working out at home or in private sessions with a personal trainer (in-person or virtual) doesn’t require an annual membership.

Paying as you go is where the market is moving. Facilitating this trend is the emergence of mobile apps that provide fitness trainers and coaches with a business-in-a-box so professionals in all aspects of fitness, but who are not necessarily astute in how to run a business, can manage scheduling, client on-boarding, invoicing, payment processing, and communication. The many thousands of certified trainers who have been laid off from gyms are now empowered to run their businesses thanks to cloud-hosted back offices and video conferencing capabilities that provide real-time delivery of services.

Disruption creates winners and losers in any industry. Sometimes disruption is a gradual process, and the eventual losers don’t detect the shifting landscape for periods that can extend for years. Think of Kodak and digital photography or Sony and its inability to capitalize on the success of the Walkman, thereby allowing Apple to become the dominant player in digital music. Disruption has been underway in the fitness industry for several years, but until recently, it has been a slow and steady disruption.

COVID-19 accelerated the pace of disruption in fitness, and studios and clubs, both small and large, are increasingly vulnerable. 24-Hour Fitness recently filed for bankruptcy, citing Coronavirus-related causes. With 420 clubs in the US, 24-Hour Fitness is the second largest fitness chain after LA Fitness. With the filing, the company announced it would permanently shut down 100 of its gyms, leaving roughly one million members to find a new place to exercise. Also, Town Sports, owner of Boston Sports Club, and several other club brands announced they would likely file for bankruptcy in the coming weeks. Gold’s Gym filed for bankruptcy in May.

Demand for fitness isn’t going anywhere but up. The $30 billion fitness industry has been growing 3 – 4% annually for the last ten years. How it is delivered, however, is changing before our eyes. The often-quoted expression “Never let a good crisis go to waste” speaks perfectly to the opportunity in the industry today.

Stuck at home, trainers and consumers have had to adapt and get creative about how they think about fitness. Many have also discovered a new meaning of community through virtual experiences that were never seriously considered just 12 months ago. No surprise that MIRROR and Peloton have experienced record sales during the pandemic because they provide consumers a workout experience that feels pretty close to being in a room surrounded by fellow workout enthusiasts. And now that they have gotten into the routine of working out from home, either with a trainer or on-demand through an app, many will never go back to a traditional gym.
​
The implications of COVID on the fitness industry offer insights into the way several industries will shift as a result of the shelter in place orders. Restaurants will get more creative about take-out options that engage the diner with the preparation, travel experiences may turn to staycations, and the beauty industry may have to move to home services or even more training than doing for their customers. The winners in every case will be the ones that are agile and ready to adapt to the change.

​The coronavirus pandemic has forced everyone to get creative. 

Whether through Zoom meetings, online fitness classes, or take-out cocktails, companies in nearly every industry are pivoting to get through the crisis. 

But beyond short-term fixes, many innovative new strategies and business models have emerged that are likely to stick, even as many jurisdictions begin to reopen in some capacity. 

In many cases, these transformations are thanks to the increased adoption of technology and the digitization of businesses. Many of these changes were underway pre-coronavirus; the pandemic has just accelerated them. 

“What’s important to customers has changed,” John Roese, Dell Technologies chief technology officer, said. “We’ve broken through a bunch of psychological or sociological obstacles to embrace technologies such as video, bots, drones, and AI.”

Here are a few of the business concepts that have gained traction over the past several months thanks to the pandemic. 

People may be sheltering in place, but they haven’t stopped looking for love. Dating apps have reported an uptick in usage during the pandemic, including a 26% increase in the messages sent on Bumble. 

One appropriately named app, “Quarantine Together,” was created specifically for the COVID-19 Age. It asks users to verify that they’ve washed their hands that day before they can connect with someone. After 15 minutes of texting, matched users can choose to switch to video chatting. 

“Bumble users are increasingly taking advantage of video calling, and audio chat features to get to know each other better and build deeper relationships, rather than engaging in more regular, casual flings,” says Bumble CEO Whitney Wolfe Herd. 

She said she expects the behavior will continue, even after people return to in-person dating. 

As the coronavirus pandemic escalated, restaurants across the United States became delivery-only almost overnight.

Most are eager to get back to serving customers in-house. But some find the prospect of operating a kitchen without a dining room an attractive opportunity. 

So, diners may begin to see a growing number of “ghost kitchens” (also known as virtual kitchens), according to Aayush Gupta, a senior associate at Create venture studio in New York City. 

Ghost kitchens have normal branding and menus online and offer delivery, but they aren’t attached to a brick-and-mortar restaurant where people can sit and eat. Gupta said such restaurants are likely to manage better as uncertainty from the coronavirus continues because they don’t have to pay rent on a dining room space or hire wait staff. 

“Younger restaurants, if they don’t have a front-of-house, they’re likely getting through this a lot better, because they don’t have the fixed costs that they have to try to recover,” Gupta said. 

Some customers have noticed the phenomenon lately. A GrubHub user in Phoenixville, Pennsylvania, was surprised when the food she ordered from a restaurant called Pasqually’s Pizza & Wings tasted eerily familiar to food from Chuck E. Cheese. And no wonder – it was sort of. A Chuck E. Cheese spokesperson told CNN that Pasqually’s is a “delivery-only brand operating on its own, leveraging the operational infrastructure of Chuck E. Cheese kitchens across the nation.” 

The trend may also provide opportunities for startups like CloudKitchens, Uber Founder Travis Kalanick’s new venture that operates shared commercial kitchen spaces, and rents them out to delivery-only restaurants. 
After a few highly anticipated movie premieres were canceled this spring, some studios decided to forgo theaters altogether in favor of direct-to-consumer debuts. And it turns out that some people may not care to get out of their PJs and off their couch to catch a new flick on the big screen. 

Theater chains don’t love this – many want to preserve their exclusive rights to premiere movies, to give people an incentive to go out.

But consumers are into it. “Trolls World Tour” was an on-demand success, earning nearly $100 million in rental fees in the United States during the first two weeks after its release. And while studios and theaters typically split a film’s box office grosses about 50-50, studios make about 80% of the sales on digital releases.
​
Movie theaters aren’t going by the wayside just yet (release dates for major films such as Disney’s Mulan were moved so they can head to the big screen first), the trend of at-home premieres could continue, at least for certain genres. The latest test of the concept is the adult comedy film, “The King of Staten Island.” 
“Comedy has not really been a strong genre at the box office lately, so if ‘Staten Island’ is a digital hit maybe that sends a signal to the studios that this genre is better suited for the small screen in the future,” said Paul Dergarabedian, senior media analyst at Comscore.

No one disputes that cars, trucks, and SUVs will become increasingly connected over the next decade. From Amazon Alexa compatibility to navigation-linked speed limiters, the list of internet-powered features you’ll one day use during your commute grows every year.

Some technologies will make driving more convenient, especially when it becomes a tedious task. That, however, is just the start. Your car might save your life by becoming a doctor – no medical school training required.

In a recent interview, Steve Surhigh, the vice president and general manager of automotive cloud services for Samsung-owned Harman, explained how a car could monitor the driver’s health.

Eyes On The Driver. Keeping an eye on the driver is nothing new; millions of cars already do it. Mercedes-Benz inaugurated Attention Assist technology on the 2009 E-Class, and the on-going race toward autonomy has created vehicles that literally look you right in the eyes.

Cadillac’s Super Cruise system relies on a driver-facing camera to tell whether the driver is paying attention. If it notices you’re looking down at a smartphone or looking nowhere because you’re dozing off, it emits visual and audible warnings prompting you to stay focused and wake up. In some cases, the automated system might even take control.

Surhigh says Harman can build wellness monitoring technology on these foundations.

Teledoctors. “Some carmakers are talking about a teledoctor-type service. So, if there is a system that monitors the driver’s vital signs, and it detects something is noticeably wrong, having a teledoctor available could be part of the vehicle’s connectivity package,” Surhigh explained. “Not only can you monitor vitals, but you can also be proactive in terms of responding to an issue, whether that’s something that would be heart rate-based or based on blood sugar levels.”

Are you curious about how your car can monitor your heart rate? Look no further than the nearest gym. Sensors in the steering wheel, similar to those found on treadmills or stationary bikes, could track your pulse. Alternatively, Surhigh says, your car could receive this information from wearable devices, like smartwatches and fitness trackers. Data could be shared via Bluetooth or in-car 5G. Ford has even floated the idea of burying six pulse sensors in the driver’s seat.

“Carmakers are already integrating technology that monitors driver attentiveness. Once you get some of those foundational use cases built, the incremental costs of being able to do other things are very manageable. At that point, it’s more of a software type of build than one related to hardware,” explained Surhigh.

The possibilities don’t end at being able to track the driver’s heart rate. It’s not far-fetched to imagine mandatory breathalyzer-based ignitions for motorists who have a long history of driving under the influence, for example.

Whether you’ll tick the “heart rate monitor” box on an options list depends on your profile. If you’re a 24-year old buying a Volkswagen GTI, there’s a good chance you’re more interested in a surround-sound system and Amazon Alexa compatibility. If you’re an 84-year old in the market for a Ford Expedition? Well, I’m not going to generalize, but there’s a better chance you’ll be concerned about your pulse than someone born 60 years after you.

Although pulse tracking isn’t for everyone, it’s one of several dozen functions car companies are looking at integrating into their infotainment systems.
​
“The digital experience is replacing a lot of what previously differentiated carmakers, whether it was horsepower or some other vehicle experience linked to the engine, the braking system, or other components,” Surhigh said. “Now, they’re largely looking at the car’s digital components for differentiation.”

The US House of Representatives approved the Moving Forward Act this week, a $1.5 trillion infrastructure bill that puts $100 billion toward bringing high-speed broadband to underserved areas. The ambitious bill also allocates funds toward transportation and clean energy initiatives, like $500 billion for rebuilding highways, bridges and rail, and $70 billion for promoting renewable energy.

The main objective of the broadband portion of the bill is to bring high-speed internet to “unserved and underserved rural, suburban, and urban communities,” as well as adequate support for it, according to a Moving Forward Act fact sheet from the Department of Transportation. It prioritizes remote learning for children by providing digital equipment and outfitting school buses and school libraries with Wi-Fi. The bill also provides broadband payment support for low-income households and the recently unemployed.

The full version of the Moving Forward Act isn’t likely to pass in the Republican-controlled Senate. However, the broadband-related amendments may still have a chance, said Matt Wood, President of Policy and General Counsel at Free Press Action, a media advocacy group. “People in cities and rural areas alike need better broadband at better prices, no matter their party or politics,” Wood said.
​
The bill is just one of many recent efforts by the government to close the “digital divide.” In February 2019, President Donald Trump unveiled the American Broadband Initiative aimed at bringing broadband to rural America. Earlier this year, the Federal Communications Commission committed $20.4 billion to the same end.

One of my favorite training assets is ScreenCastsOnline from Mac pioneer Don McAllister. Each week they produce a full tutorial and a shorter tip video on Mac software and services.

This week, the main tutorial was on a free online service called xkpasswd. This open-source service will produce incredibly secure passwords. There are five settings that you can customize, and based on these settings, the site will generate several passwords from which you may pick one that you like.

The five settings include:
         • Words: set the max number of letters and the number of words
         • Transformations: use the lower and upper case letters on words
         • Separator: a randomly chosen character to separate words
         • Padding Digits: any number of digits before and after the words
         • Padding Symbols: any number of symbols added to the front and back of the password.

After generating several passwords, the site will evaluate the level of safeness of the results. When the strength of the password is good or better, the numbers are shown in green. Less secure results display in red. This immediate assessment gives you the data you need to know that the password you select will be safe and extremely difficult to hack.

The site also has generated several configurations of the above five settings for specific uses. One configuration is designed for Apple ID passwords specifically. The values set are designed to respect the prerequisites that Apple places on Apple ID passwords. But, it also limits the symbols found on the iOS letter and number keyboards, so entering the password is easier.

One other configuration is called SECURITYQ and is designed to create answers to those pesky security questions such as the first name of the maid of honor at your wedding or your mother’s maiden name. Answering these questions with something other than the truth is really important since today’s hackers are getting very good at researching information about their prey. This configuration will help generate good answers to these questions without any relationship to reality.

The site is free, but they do note that the server that is running the application is not free, and they welcome donations.
​
Remember that all of these passwords need to be kept secure with good password management software such as 1Password, LastPass, and Dashlane.

Zoom has reversed its controversial decision to restrict access to end-to-end encryption (E2EE) for some users and will now offer the feature to customers of both its free and premium services.

The video conferencing app said it had consulted with rights groups, child safety advocates, government representatives, encryption experts, and its security council to gather feedback.

“We are also pleased to share that we have identified a path forward that balances the legitimate right of all users to privacy and the safety of users on our platform,” the firm’s CEO Eric Yuan said in a recent blog post.
“This will enable us to offer E2EE as an advanced add-on feature for all of our users around the globe – free and paid – while maintaining the ability to prevent and fight abuse on our platform.”

Users of the free service will be required to authenticate in a one-off process with information such as their phone number, for the platform to “reduce the mass creation of abusive accounts,” Yuan added.

The news came as rights groups, tech firms, and internet users petitioned the firm to reverse its policy on E2EE.

They argued that E2EE is too essential to be a premium feature, especially in the context of global protests against racial injustice and government oppression. The technology protects activists, journalists, and other vulnerable parts of the population from government repression and surveillance, as well as from cyber-criminals, they said.

Mozilla welcomed the news. The tech non-profit, which wrote an open letter to Zoom earlier in the week signed by tens of thousands of internet users, argued that E2EE should always be the default setting, not a luxury.

“We’re heartened that Zoom listened to consumers, especially at a time when millions of people are relying on the platform to stay connected amid the pandemic and to organize in support of Black lives,” it said in a statement.
​
“Zoom’s decision is part of an emerging trend: Consumers are demanding more of the technology products and services they use every day. And companies are changing their products to meet these demands.”

From predicting outbreaks to devising treatments, doctors are turning to AI to combat the COVID-19 pandemic.

Why It Matters. While machine learning algorithms were already becoming a part of health care, COVID-19 is likely to accelerate their adoption. But lack of data and testing time could hinder their effectiveness – for this pandemic, at least.

What's Happening. With millions of cases and outbreaks in every corner of the world, speed is of the essence when it comes to diagnosing and treating COVID-19. So it's no surprise doctors were quick to employ AI tools to get ahead of what could be the worst pandemic in a century.

• HealthMap, a web service run by Boston Children's Hospital that uses AI to scan social media and other reports for signals of disease outbreaks, spotted some of the first signs of what would become the COVID-19 outbreak. This was days before the WHO formally alerted the rest of the world.
• Early in the epidemic, the Chinese tech company Alibaba released an AI algorithm that uses CT scans of possible coronavirus patients and can diagnose cases automatically in a matter of seconds.
• In New York, Mount Sinai Health System and NYU Langone Health have developed AI algorithms that can predict whether a COVID-19 patient is likely to suffer adverse events soon and determine when patients will be ready to be discharged. Such systems can help overburdened hospitals better manage the flow of supplies and personnel during a medical crisis. 

The Big Picture. Even before COVID-19, AI was already becoming a more significant part of modern health care. Nearly $2 billion was invested in companies involved in health care AI in 2019, and in the first quarter of 2020, investments hit $635 million – more than four times the amount seen in the same period of 2019, according to digital health technology funder Rock Health.

• The advance of AI is partially a result of the rapid increase in data, the lifeblood of any machine learning system. The amount of medical data in the world is estimated to double every two months.
• Engineer and entrepreneur Peter Diamandis told Wired an estimated 200 million physicians, scientists, technologists, and engineers are now working on COVID-19, generating and sharing data "with transparency and at speeds we've never seen before."
• "We understand who is at risk and how they're at risk, and then we can get the right treatment to them," says Zeeshan Syed, the CEO of Health[at]Scale, an AI health care startup.

In Trials. AI has demonstrated in recent trials a decent record of success, especially when it comes to rapidly diagnosing COVID-19 by interpreting medical scans.

• A study published in Nature Medicine in May found an AI system was more accurate than a radiologist in diagnosing COVID-19 patients using CT scans – X-ray images of lungs – combined with clinical symptoms. 
• A systematic review of preprint and published studies of AI diagnostic systems for COVID-19 published in the British Medical Journal in April noted the models reported "good to excellent predictive performance." However, they cautioned the data was still limited for real-world applications and at high risk for bias.

The Catch. That's the perennial challenge for AI systems in any field. Experts worry models that perform well in an experiment may not be able to replicate that success in a hospital under stress.

• "There is a lot of promise in using algorithms, but the data in the biomedical space can be really difficult to deal with," says Gabe Musso, the chief science officer at BioSymetrics. This biomedical AI company uses machine learning for simulation-based drug discovery. Genetic data, imaging data, and data from electronic health records are often unstructured and rarely share a common format, complicating efforts to feed the information into an algorithm.
• Many of the AI diagnostic systems being rushed into the fight against COVID-19 were developed before the pandemic and thus were trained on other respiratory diseases like tuberculosis. That reduces their accuracy – especially if their training datasets don't match the gender or age of typical COVID-19 patients.
• As a result, pioneering computer scientist Kai-fu Lee wrote recently, "I would give [AI] a B-minus at best" for its performance during the pandemic.

The Bottom Line. As both the size and quality of medical data on COVID-19 improves, so should the AI systems that draw from it. But that will take time.

The very first contact tracing app powered by Google and Apple's exposure notification APIs has gone live in Switzerland.

As announced on Twitter by EPFL yesterday, 'SwissCovid' is now undertaking a large scale pilot, with hopes that it will pave the way for public availability by mid-June.

As of today, employees at @EPFL, @ETH_en, @vbs_ddps, and some hospitals and cantonal administrations can download the digital proximity tracing application #SwissCovid. This large-scale pilot paves the way for public availability by mid-June. https://t.co/E9hl43g8Ca #COVID19 #DP3T

In an announcement the institute stated:

Several thousand people in Switzerland can now download "SwissCovid," the official application for tracing contacts at risk of transmission of COVID-19 if they wish. "This is the first time that the operating system updates from Google and Apple enable its deployment and testing on such a large scale," says Professor Edouard Bugnion, Vice-President for Information Systems at EPFL. He was at the heart of discussions with Google and Apple to have them adopt the "DP3T" protocol led by the two Swiss Federal Institutes of Technology. Alfredo Sanchez, project manager, notes that "this gives great responsibility to the Swiss testers, as many other countries intend to adopt the same protocol later on."

One important footnote is that while the pilot is ongoing, the Swiss parliament will deliberate revisions to the law on epidemics. MPs must debate and approve the scheme before it is offered to the public, however recent research has suggested that as many as 70% of Swiss residents support the program.

This is the first large-scale testing of an app that uses Apple and Google's exposure notification technology. As per the two companies' stipulations, the operation is also decentralized:
​
SwissCovid operates in a "decentralized" way, which means that the operations that are essential from a privacy point of view are not carried out on a centralized server, but on each phone. The app uses Bluetooth to exchange and record the ephemeral proximity identifiers of other phones in the vicinity. These identifiers are kept on the phone unless a person is tested positive for COVID-19. In that case, their doctor will give them a single-use code that allows them to voluntarily share the ephemeral keys on their own phone that correspond to the days when the person was contagious. These keys are sent to a server managed by the Swiss administration.

The potential jurors popped onto the screen one by one. They confirmed their names and told the judge how they were connecting to the court: on laptops, tablets, and iPhones.

There were some wireless issues and camera problems. Still, eventually, 26 Texans in separate boxes raised their hands for the judge and together swore the juror’s oath, beginning the experiment of conducting a civil jury trial entirely over Zoom.

The coronavirus pandemic has crippled courts nationwide, putting many cases on indefinite hold and leaving judges trying to manage some hearings via videoconferencing. The delays have kept some defendants in jail longer, exposing them to possible outbreaks. And the virus even upended how the Supreme Court operates, with the justices hearing oral arguments by phone for the first time in the court’s history.

The test jury-trial-by-video that was held in suburban Dallas recently could reveal a possible path forward in which jurors are kept safely distanced. At the same time, cases are allowed to proceed until the coronavirus threat has receded enough to resume some semblance of normal life.

It also raises complex questions about security, a person’s right to a fair trial, and whether virtual deliberation might prevent 12 people from forming the bonds needed to hash out justice.

“No one is saying tomorrow we’re going to start trying serious felonies over Zoom,” said District Judge Emily Miskel, who coordinated the technology for the trial. “But I think there are many civil trials where parties might agree that this is a good way to resolve it given the uncertainty of when you’re ever going to get an in-person civil jury trial.”

The Collin County court held the so-called summary trial – a one-day civil proceeding with a non-binding verdict – on Monday as an experiment in restarting parts of the justice system that ground to a halt because of the coronavirus. It was over a disputed insurance claim that was originally set to be heard in-person in March. According to the National Center for State Courts, which has tracked court functions during the pandemic, it’s the first remote jury trial ever in the United States.

Those involved seemed pleased with the process.

Jury selection was streamed live on YouTube, but most of the rest was private because summary trials are confidential civil proceedings meant to give the parties the option of settling before an actual trial.

During jury selection, lawyers for both sides asked people on the call to raise their hands in response to questions about potential bias. When a hand popped onto the screen, the lawyers would ask follow-ups or note the juror’s number.

Matthew Pearson, a San Antonio lawyer for the plaintiff, said the comfort of their homes seemed to make the jurors more responsive to questions. They were attentive as he presented evidence by sharing his computer screen over Zoom, Pearson said, and his firm saved money because it didn’t have to fly in an expert witness from Minneapolis.

“Overall, it was a better experience than I was expecting,” he said.

Deliberation proved a little more tricky.

The jurors were broken into two groups of six and put in separate virtual rooms where they could talk privately and look at the evidence in Dropbox folders. They ultimately returned two verdicts meant to give the parties more information to assess whether to go to trial.

At one point, things were delayed a few minutes when a juror who’d stepped away to make a phone call during a break couldn’t hear the judge calling him back to his computer. The same type of thing happens in the courthouse, Keith Dean, the retired judge who presided over the trial, told the others.

Miskel, the other judge, joined the deliberation “rooms” a few times to help jurors access evidence, which she said would normally cause attorneys to “freak out.” Typically, jurors send notes asking the judge for help, and a member of the staff goes into the jury room with pieces of evidence.

But lawyers worry that virtual deliberation cuts out the casual interaction among jurors that some see as essential to building group trust. And defense attorneys are especially skeptical of e-court for criminal cases, where they already struggle to speak privately with their clients during routine hearings held remotely.

“It would just be too difficult, too many constitutional hurdles to clear for a defendant to be brought to a virtual trial,” said Randy Gioia of Massachusetts’ public defender agency. “There is no substitute for an in-person, face-to-face three dimensional hearing with a judge.”

Security is a concern too. As tens of millions of people have turned to video conferencing to stay connected during the pandemic, hackers have derailed many calls with threats, bigoted comments, and pornographic images.

If more courts turn to video trials, ensuring people with poor or no wireless could serve as jurors would also be a challenge. Rare cases that require juries to be sequestered might have to take place in-person.

Even when cases do return to the courthouse, the virus may have changed things. Cross examinations will be different if attorneys and witnesses are wearing masks. And Miskel suggested courts might blend in-person and online – doing trials over video but bringing jurors to court to deliberate.

Dean reminded jurors at the start of the proceedings that the online setting made their duties no less important.
​
“The courthouse came to you,” he said.

This week, Senate Democratic Leader Chuck Schumer (D-NY), Sen. Todd Young (R-IN), Rep. Ro Khanna (D-CA), and Rep. Mike Gallagher (R-WI) unveiled the Endless Frontier Act (EFA).

This newsletter doesn’t usually cover new legislation, much less proposed bills. But EFA is an exception since it seeks to turbocharge American “discovery, creation, and commercialization of critical tech.” By that, the lawmakers mean every technology you read about in this newsletter. 

EFA’s core proposals. There are three principal parts to the proposed bill:

• Restructure the National Science Foundation into the National Science and Technology Foundation (NSTF)
• In the NSTF, stand up a Technology Directorate that receives $100 billion over five years and operates like DARPA
• Hand the Commerce Department $10 billion to invest across 10-15 regional tech hubs over five years

This is great news for U.S. universities and businesses because EFA would pad R&D budgets, establish new scholarships, and create cutting-edge labs and fabrication plants. 

What’s driving the frontier mindset? The private sector overtook Washington in R&D investment four decades ago. EFA’s sponsors want to expand the pool of capital so that all of Washington’s tech priorities are advanced in the U.S.

The other reason for EFA, which its sponsors explicitly call out: China. While Beijing’s bid for tech supremacy is better described as a “slow burn” rather than a “Sputnik moment,” the country’s tech industrial base is now a genuine contender with the U.S. There’s more to come: 

• China plans to invest $1.4 trillion in emerging tech over the next six years. 
• Chinese chipmaker SMIC recently announced a $2 billion investment from state-backed funds. 
• Tencent will spend $70 billion on tech infrastructure over the next five years. 
  ​
  

“The U.S. needs to pursue with all-of-the-above strategy and intensify efforts,” a person familiar with the legislation said in a recent interview.

As Bill of Schoolhouse Rock’s “I’m Just a Bill” could tell you, EFA may never see the light of day. But adding $$$ to tech R&D and accelerating the U.S.-China tech decoupling are bipartisan priorities.