TBED101: Distinguishing critical and emerging technologies in policy

Note: TBED101 is a new, occasional series for Digest readers visiting and revisiting fundamental topics for nurturing strong regional innovation economies. SSTI is introducing this series, with EDA support, as the field has entered one of its most significant periods of disruption and change in its 45-year history. Separately, SSTI members will be able to participate in more in-depth explorations of the issues in the coming months as part of their membership. Consider joining here.

In public policy discussions and popular media, the terms “critical technologies” and “emerging technologies” are frequently invoked—but their meanings are often conflated. For policymakers, clearly distinguishing between the two is essential, as each category carries distinct policy imperatives for funding, regulation, and national security.

Emerging technologies are primarily defined by their novelty and developmental stage. They represent the scientific and technological frontier—innovations that are currently under development or are anticipated to achieve significant impact within the next five to 15 years. These often happen at the intersection of existing sectors or disciplines but also as a result of disruptive scientific discoveries or technological breakthroughs. The key characteristics of emerging technologies include:

• High Uncertainty: Capabilities, market viability, and long-term impact are often not fully understood. Development paths are unpredictable and many may fail to achieve scale or practical adoption.

• Rapid Evolution: These technologies advance quickly and often unpredictably.
• Disruptive Potential: Capable of transforming existing industries, creating new markets, and redefining military functions.

• Nascent Ecosystems: The industries, supply chains, talent pipelines, and regulatory frameworks surrounding them are often underdeveloped or non-existent.

Current examples include large-scale quantum computing, advanced neuro-technologies, novel synthetic biology applications, and certain forms of artificial general intelligence (AGI). The focus is on potential and newness.

Critical technologies, by contrast, are defined by their strategic importance to national interests. They are technologies deemed essential for a nation's economic prosperity, national security, and overall societal well-being. Their key characteristics include:

• Indispensability: A nation's economic security, military power, or societal resilience relies on access to or dominance in these technologies and related inputs.

• Maturity: They can be either emerging or well-established. While generative Artificial Intelligence (AI) is both emerging and critical, semiconductors are largely established yet remain fundamentally critical.
• Geopolitical Significance: They are often at the heart of international competition and cooperation, influencing global power dynamics.

• Supply Chain Vulnerabilities: Breaks, scarcity or disruptions in supply chains and critical material inputs create strategic vulnerabilities across sourcing, manufacturing, and deployment.

The U.S. government’s Critical and Emerging Technologies (CET) list exemplifies this concept, including subcategories within areas such as AI, quantum information science, biotechnology, hypersonics, semiconductors, and advanced energy. The focus here is on necessity and impact.

The core distinction lies in how the technologies are defined: “emerging” refers to when and how developed a technology is, while “critical” refers to how strategically important it is. For instance, advanced GPS is critical but no longer emerging. Conversely, neuromorphic computing may be emerging but is not yet critical. Frequently, however, technologies are both, as the disruptive potential of emerging tech often makes it inherently critical. As a case in point, the U.S. Department of Defense List of Critical Technologies includes a group of technologies—biotechnology, quantum science, advanced materials, and future-generation wireless technology—under the heading Seed Areas of Emerging Opportunity. Nonetheless, the distinction between emerging and critical carries implications for policymakers. 

For emerging technologies, the primary goal is to foster innovation without prematurely picking winners or stifling exploration. Possible policy interventions include broad-based R&D grants that fund discovery and basic research, encouraging public-private research consortia, and fostering high-risk innovation finance availability. Of course, emerging fields also require new skills, necessitating investment in STEM education at all K-16 levels, the creation of specialized postgraduate programs, and the implementation of workforce retraining initiatives. New technologies may also come with potential ethical, social, and security risks before they are fully mature and widespread. This time gap may require regulatory frameworks to adapt even before technologies have evolved, addressing potential issues such as bias in AI systems or ethics of gene editing before widespread deployment.

In the area of critical technologies, the focus shifts to securing supply chains, preventing control by adversaries, and maintaining a competitive edge. New industrial policies, including large federal investments such as the CHIPS and Science Act, may be considered, along with incentives to encourage domestic manufacturing and stockpiling of critical materials and cybersecurity mandates for critical infrastructure. Critical technologies also may warrant targeted government procurement of innovations deemed vital to national goals and accelerating their commercialization and adoption. Of course, many critical technologies have both civilian and military applications, requiring a careful balance between economic promotion and security restrictions.

Policymakers face a complex landscape where the technologies of tomorrow (emerging) intersect with the necessities of today (critical) and legacy industries of regional economic importance. An effective regional innovation strategy requires a three-pronged approach: 1) a broad, forward-looking stance that nurtures a diverse set of emerging technologies; 2) a focused, security-conscious strategy that protects and advances critical technologies, 3) and tactical redevelopment or transition strategy for legacy sectors likely to be significantly disrupted or made obsolete as the economy evolves. Failure to distinguish between emerging and critical—or to have elements addressing all three communities—can lead to misallocated resources or less than optimal outcomes. Risks include chasing every new innovation without strategic focus, neglecting early-stage technologies that may become critical, or finding unexpected mass layoffs or tax revenue loss from major plant closures. 

Long-term success demands an agile ecosystem that allows emerging technologies to thrive while ensuring the resilience and strategic control of those technologies most critical to national prosperity and security while keeping your existing business and industrial bases up to date.