The Logic of Strategic Assets: From Oil to AI

What resources and technologies are strategic? Policy and theoretical debates often focus on this question, since the “strategic” designation yields valuable resources and elevated attention. The ambiguity of the very concept, however, frustrates these conversations. We offer a theory of when decision makers should designate assets as strategic based on the presence of important rivalrous externalities for which firms or military organizations will not produce socially optimal behavior on their own. We distill three forms of these externalities, which involve cumulative-, infrastructure-, and dependency-strategic logics. Although our framework cannot resolve debates about strategic assets, it provides a theoretically grounded conceptual vocabulary to make these debates more productive. To illustrate the analytic value of our framework for thinking about strategic technologies, we examine the US-Japan technology rivalry in the late 1980s and current policy discussions about artificial intelligence.