In the first tier are the emerging economic powers. We looked at China and India in some depth. Both nations have charted ambitious innovation agendas for improving living standards and moving well beyond labor-intensive manufacturing and low-skill services to high-tech and knowledge-intensive industries. They are leveraging their large domestic markets and low-cost workforces to attract foreign investment in next-tier industries and are developing globally competitive corporations. They also are making strategic choices about technologies that address domestic needs and in which they are best positioned to compete globally in the future.
In the second tier are the more mature newly industrialized economies. We focus on Singapore and Taiwan, which have extraordinarily well-educated populations and have attained world standards in industries such as high-tech electronics, biotechnology research, and chemicals. They are striving to develop innovation ecosystems that will allow them to rank among the world’s richest nations and compete head-to-head with the West and Japan in next-generation industries.
The third tier represents mature industrialized nations. We devote special attention to Germany because of that nation’s ability to remain globally competitive in advanced manufacturing exports despite wages and other costs that are higher than in the United States. Our case studies also include Japan, Finland, Canada, and the Flanders region of Belgium. Each of these nations has revamped their national innovation strategies in order to increase R&D spending, collaboration between industry and academia, and new technology start-ups.
In most cases, it is too early to offer a full assessment of whether the strategies and policy tools selected by other nations will achieve their stated targets. What’s more, not all of these policy options are appropriate for America. Yet they offer many valuable lessons for U.S. policymakers and present a picture of the changing global context as America prepares for 21st century competition.
After achieving decades of astonishing growth led by export manufacturing and heavy capital investment, China’s leadership stresses that the nation’s future as a global power rests on its ability to build an innovation-led economy.2 China has pursued that goal with substantial investment and
2 Government pronouncements on the importance of innovation began earlier. For example, thenPresident Jiang Zemin declared in the keynote address to the National Innovation Technology Conference on Aug. 23, 1999, that “the core of each country’s competitive strength in intellectual