China Gains Tech Trophy; Wake-up Call to the West

China now leads the U.S. for technological leadership. I'm not the only one saying this is a leading edge trend that needs attention from our top policy makers and businesses. Now, a study by the Georgia Institute of Technology affirms it.

Ranking 33 nations on technology competitiveness, infrastructure, socioeconomic factors and productivity, the researchers conclude that China has moved from "in the weeds" to world technological leadership over the past 15 years. Once it was Japan that threatened to be the major rival to the U.S. Now that trophy goes to China and its rapid climb from a low-cost producer to a high-tech inventive nation. This trend has bubbled to the surface by China's emphasis on training of scientists and engineers and focus on basic research and development.

Is this a wake-up call for the West? You bet. Technology forecaster and Stanford University teacher Paul Saffo says that Silicon Valley is "aging and slightly out of shape." Venture capitalist Kevin Fong compares China's entrepreneurial spirit to what was the Valley was like "pre-2000."

Certainly, it can't be ignored that bright, young Chinese talent, who were largely educated and trained in the U.S., have returned home to follow through on Deng Xiao Peng's famous quote, "To get rich is glorious." At the same time, in the post 9/11 era, the U.S. has put up immigration barriers, blocking the very people who helped to create our tech titans from working in the country.

Bill Tai, a venture investor in both China and the U.S., has chased more than one entrepreneurial dream. His latest discovery is a Chinese inventor of an advanced web browser called Maxthon, which already has 150 million downloads and counting. Created by a geeky software developer in Beijing named Jeff Chen, Maxthon is "built on passion," says Tai.

While entrepreneurs in the West take time out on weekends to go biking, surfing, camping or whatever, their Chinese counterparts are glued to their PCs writing code for new breakthroughs. It's not a hobby for most, but Chen says he can't help but do it. His own dream is to make people's surfing live (online) better and better all the time. See this recent interview I recently conducted with Chen at his Beijing startup:

As China rises, Silicon Valley is resting on its great heritage as the world's innovative hub. Saffo says it best, "Silicon Valley is built on the rubbish of economic failures. Silicon Valley has wipe-outs and creates space for others to come in and build the next generation of companies."

China's own entrepreneurial development is still too young to share this history. But with most experts predicting that the next Steve Jobs will come from China, it won't be long before the country has its own chapters of both tech success and failures -- all breeding more innovations.

Comments

[wonderingstar]

Rebecca - thanks for this very interesting report.

Conventional wisdom says that innovation only occurs with strong intellectual property right protection. The opposing view is that IP rights protections confer monopoly profit rights to the owners that stifle innovation. See "Creation Myths" http://www.reason.com/news/show/28703.html

China is often criticized for lack of IP rights protection. Yet this report shows that there is a lot of innovation there.

Assuming your report is true, this would suggest that either (a) China does have sufficient IP rights protection since there is innovation or (b) conventional wisdom is wrong.

The "passion" you observe in the innovators seems to cut against conventional wisdom. In an idealized socialist society (like in a idealized Christian society), people are encouraged to do things for the good of others whether or not you get monopoly profit. Your description of Chen's dream "to make people's surfing live (online) better and better all the time" illustrates this ideal. Innovators will do their thing whether or not they are given monopoly profit incentive.

On the other hand, China has already put in place laws on IP rights, but enforcement is generally weak but improving. Is the current IP rights regime "just right" for promoting innovation? It would be interesting to hear a future report on this.

Thanks again.

[RobinSeattle]

HuffPost's Pick

Part of he U.S. technological sloth is due to a lack of competition in some major tech sectors. It isn't just China and Japan we are behind, we are way behind South Korea in broadband speeds, for example, and those countries, which all currently have stronger currencies than the U.S., are paying less for it..

An illustration of how that gets perpetuated can be seen in my area. Our available providers are Comcast, QWEST and AT&T. Qwest is under federal indictment every ten minutes, so people are hesitant to deal with them.

AT&T seems to hate its customers and is the biggest collaborator in helping the White House erode privacy rights.

That leaves Comcast as the lesser of three evils, though their service sucks and they are plenty evil enough. They get the lions share of the market because the other two are so inept and thus really no competition at all. They all give us Model T connection speeds while South Koreans are driving Ferraris, so to speak.

Verizon's FiOS service isn't available here yet. And even that isn't nearly as fast as what you can get cheaply in Seoul.

The reason is that there is more competition in those three Asian countries is because the governments dictated such while our government is composed of monopolists. We have become infrastructurally and technologically degraded thanks to Bush and his enablers. Most Americans don't care because they don't know what is out there.

[Cathexis]

I'd say that, in addition to those good points, US Business seems to have decided (about 20 - 30 years ago) that the best way to grow profits was to reduce costs -- in fact, that seems to be one of the ONLY focuses of businesses, these days.

Innovation, of course, was a "cost."

People are "costs."

What is happening, I believe, is that while the US has been single-mindedly pursuing this short-term strategy, other countries have been working towards longer-term goals -- that include innovation and developing people as assets (versus downsizing them as costs).

Back when I was a kid, "Made in Japan" was a derisive comment about cheapness to the point of affecting quality. Now ... "Made in the USA" seems to be vying for that ignominity.

And we gave multi-million packages to CEOs to put us down this path?!? the Business World *is*, indeed, full of idiots.