07/09/2010 10:20 am ET Updated May 25, 2011

The Smartest Kid in the Class

One of my first conversations at the beginning of a recent trip to China focused on the government's encouragement of a rebirth of Confucianism. When I asked for an explanation, my colleague asked me if I had ever been to the Confucian temple in Beijing and I admitted I had not. He explained that carved into the walls of this important temple were three dynasties worth of names and actual test scores of Jinsi, or advanced scholars (51,000), who had achieved their status as a result of grueling three day tests.

Actually, the process of using tests to pick the Chinese elite has been going on for thousands of years. Historically, the reward for obtaining Jinsi status was a lucrative government job for life as well as fame and in some cases riches for the entire family. Failure was devastating and sometime even resulted in suicide. I reflected on this remarkable and venerable meritocracy as I walked through the gardens of the Summer Palace and then hurried downtown for dinner with two relatives of a friend from Chapel Hill.

Little did I know my dinner companions would be modern-day Jinsi. I didn't see an official copy of their transcripts but they are clearly members of China's intellectual elite. One is a lawyer (as is her father) and a graduate of one of the two most elite universities in China. The other is a banker and also a graduate of two elite universities. They suggested an opulent restaurant that celebrated Chinese calligraphy from Confucian times, so the venue was loosely akin to the Temple with the engraved names. We sat in a chamber in the middle of the room surrounded by curtains for privacy, and the four of us were attended to by at least four wait staff. As visiting professors who were considerably older we were treated with a kind of deference not seen in our own country (thank goodness).

After discussing a Chinese economy still on fire and all the opportunities such growth creates for people such as them, the lawyer mentioned she hoped to get an advanced law degree in the United States. As I enthusiastically commented on how valuable she would be when she returned to China she said she might not. Real estate prices were lower in the United States and the opportunities for intellectual superstars were greater. She recited the example of a cousin who was a physician and researcher in nanotechnology and a brother-in-law who was an investment banker to prove her point. Her husband who began his career as a management consultant and was now buried in the bureaucracy of a regional bank echoed her point of view. Both had come from middle class families. With a shiny new BMW, a comfortable apartment and a substantial amount of expendable income by Chinese standards they had already achieved the upper middle class Chinese dream before the age of 30, but the United States still loomed large for the smartest kids in the class.

The remainder of my trip re-enforced this notion. One university we visited for the fourth time had a change in policy and was now interested in developing a student exchange program that would involve internships in high-tech companies in the United States and China. Another university was willing to pay our recent graduates $30,000 a year tax free to come to Beijing to teach English. On a Saturday evening trip on the Beijing subway most of the riders were under 25 and all seemed to be dressed like Americans their age -- the same t-shirts, the same jeans and the same footwear. The Nike store celebrating the World Cup and the three story high jumbotron in the new Armani store involved the latest in western marketing, and Kobe Bryant is everywhere. For most Chinese, all they can hope for is a taste of the USA in the form of clothing or music, and as they race to the middle class they are taking advantage of the opportunity. But for the smartest kids in the class, much more is possible. They want to visit or even immigrate for the same reasons that people from all over the world have come to America for centuries.

The Jinsi of China are not unique. University officials report a flood of interest among top foreign students from all over the world and interest would be greater if not for restrictive immigration policies that make even temporary student visas more difficult than ever. In addition, the elite universities in the United States are literally besieged with interest from sister institutions interested in exchange programs and other forms of collaboration. Such arrangements are not limited merely to short term residencies but often result in long term cooperation. Inventive configurations have resulted in virtual chemistry labs functioning 24/7 as projects are handed off among teams located in different time zones. Such arrangements result in more than just a continuous work environment. By bringing together top minds from multiple continents cultural diversity is injected into the mix and top scientists and innovators tell me this results in both better academic science and greater impact on critical world problems. More often than not, international collaboration is driven by a research university located in the United States.

If the top thinkers in the world are attracted to the United States and its elite institutions of higher learning, either as a permanent resident or as a source of collaboration, how do we build on this enviable position? First, both the public and private sectors must recognize research universities as the crown jewels of our society and as a superior long term investment. Not only do they engage the world's greatest thinkers, but they also have unparalleled facilities, they are surrounded by an eco-system tailored to innovation, they already have a substantial capital base and they are here to stay. Of the eighty-five institutions in existence since 1522 (including the British Parliament and the Catholic church) seventy are universities. Second, universities must recommit to a mission of impacting the world's biggest problems. Policy makers, funding sources and citizens all over the world look to research universities as major centers of innovation and these institutions must step-up to the responsibility that has been placed, voluntarily or involuntarily, upon them. Third, U.S. immigration policy must encourage temporary and permanent residency by the Jinsi of the world. It should be no more difficult for an intellectual super star to live in the United States than a star athlete.

Data shows these people, in addition to making discoveries and creating new knowledge, also start companies and create jobs. By increasing the diversity of the communities that surround our great universities we are increasing the one competitive advantage almost all agree resides with the United States -- our ability to innovate and apply innovations to real world problems. Fourth, we can't take the foot off the peddle that drives research and development. Studies undertaken by Stanford, MIT, and UC-Santa Barbara suggest that research dollars come back in the form of economic development. Again, universities must meet funding sources half-way by re-committing to high impact results from the funding they receive.

Lastly, tax policy must encourage the high-tech start ups that help translate new knowledge into high impact innovation. There is no reason why the world class innovation engines that exist in Palo Alto and Boston cannot be replicated around scores of U.S. research universities, but high tech start ups are a crucial part of the equation. Encouraging investment in what are admittedly high risk, high reward ventures are an essential element in creating settings where the world's great innovators prosper.

There is little doubt that the world must view its biggest problems as opportunities, that innovators and entrepreneurs will play a central role in doing so, and that American culture in general, and specifically its research universities, are well suited to lead the way since many of the world's great minds are attracted to both. Our challenge is to create a sustainable competitive advantage from the remarkable hand we have been dealt.

To learn more about innovation and higher education and to join the conversation go to