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Study: China Rivals U.S. in Driving Global Economy and Leading Technological Innovation

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Study: China Rivals U.S. in Driving Global Economy and Leading Technological Innovation

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A study tracking worldwide technological competitiveness suggests China will soon be a principal driver of the world’s economy—rivaling the United States in its ability to develop and globally market high-technology products.

Titled High Tech Indicators – Technology-based Competitiveness of 33 Nations 2007, the study was produced by Atlanta’s Georgia Institute of Technology. Its purpose was to forecast who would be “the next Japan” in leading the world in technological competitiveness. It documents China’s dramatic move from “the weeds” to being a rival for technological leadership in only 15 years.

It is believed that China will soon surpass the United States in high-tech research (in fields such as electronics, nanotechnology, digital media and biotechnology, etc.), turning those developments into products and services, and effectively marketing them to the world. This is contrary to the preconceived notion that China produces only low-cost manufactured goods.

“Since World War II, the United States has been the main driver of the global economy,” said Nils Newman, a co-author of the study. “Now we have a situation in which technology products are going to be appearing in the marketplace that were not developed or commercialized here. We won’t have had any involvement with them and may not even know they are coming.”

The researchers used four “input” criteria to determine a nation’s overall technological competitiveness—

  • National Orientation: evidence that a nation is directly working to increase technological competitiveness on government, business and cultural levels, or any combination of the three

  • Socioeconomic Structure: the social and economic institutions that allow jobs and living conditions conducive to maintaining a modern, technology-based nation

  • Technological Infrastructure: institutions and resources that contribute directly to a nation’s ability to develop, produce and market new technology

  • Productive Capacity: the amount of qualified personnel devoted to manufacturing products

The opinions of experts from the 33 nations studied were also used.

In 2007, China scored 82.8, compared to 76.1 for the United States, 66.8 for Germany and 66.0 for Japan. Eleven years ago, China’s score was 22.5.

“We are seeing consistent gains for China across all criteria we measure,” said Mr. Newman. “As a percentage mover relative to everyone else, we have not seen a stumble for China. The gains have been dramatic, and there is no real sense that any kind of leveling off is occurring.”

However, China is still behind the United States in socioeconomic structure, technological infrastructure and productive capacity.

China has climbed the technology export ladder by focusing increasing amounts of time and funding on research and development, as well as training new scientists and engineers. The U.S., however, has seen the training of scientists and engineers lag, and international professionals are not being brought in as quickly due to post 9/11-restrictions.

The study points out that both the U.S. and Japan have fallen in technological standing, largely because of the sudden rise of China and the “Asian Tigers”—South Korea, Singapore and Taiwan. Before these newcomers to high technology arrived, the U.S. and Japan had little competition. Further competition comes from the increasingly integrated European Union, which would surpass the U.S. if it were considered one entity rather than 27.

Mr. Newman noted that China has half the amount of scientists and engineers than the U.S., but has “a lot more growing room.”

“It would be much more difficult for the United States to get much better in this area,” he said, “and it would be very easy for us to get worse. It would be very easy for the Chinese to get better because they have more room to maneuver.”

“China has really changed the world economic landscape in technology,” said Alan Porter, co-author and co-director of the Georgia Tech Technology Policy and Assessment Center. “When you take China’s low-cost manufacturing and focus on technology, then combine them with the increasing emphasis on research and development, the result ultimately won’t leave much room for other countries.”

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