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Why American Innovation Will Beat Out China's

Author: Adam Segal, Maurice R. Greenberg Senior Fellow for China Studies
March 10, 2011
cnn.com

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Editor's Note: Dr. Adam Segal is the Ira A. Lipman Senior Fellow at the Council on Foreign Relations and author of Advantage: How American Innovation Can Overcome the Asian Challenge.

Sometime this year, the Chinese government will announce a new initiative to lure ten scientific superstars to research labs throughout China.  The government hopes that if it offers a $23 million dollar award to Nobel Prize winners and other luminaries, they will relocate and raise the quality and prestige of Chinese research and development.

The program is part of a larger strategic push to shift from “made in China” to “innovated in China.”

The Chinese have great ambitions, but can they be met?

Spending on research and development as a percentage of China's GDP has tripled over the past fifteen years from half a percent to 1.5%.  By 2020, about 2.5% of China's mammoth GDP will likely go to R&D.

A 2006 Chinese planning document introduces 17 megaprojects in areas such as high-end generic chips, manned aerospace and moon exploration, developmental biology, and nanotechnology.

In 2010, China passed the United States and Japan as the world's largest filer of patent applications.

But as with other announcements, anecdotes, and data sets that appear to herald the inevitable rise of China, they mask significant weaknesses.

There are serious shortcomings within China's innovation system.

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