National Academies Press: OpenBook

Meeting Global Challenges: German-U.S. Innovation Policy: Summary of a Symposium (2012)

Chapter: Panel II: Competition and Cooperation in a Global Economy

« Previous: Keynote Address--Werner Hoyer
Suggested Citation:"Panel II: Competition and Cooperation in a Global Economy." National Research Council. 2012. Meeting Global Challenges: German-U.S. Innovation Policy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/13488.
×

Panel II

Competition and Cooperation in a Global Economy

Moderator:
Katharina Schlüter
Finance-Magazin

Ms. Schlüter set the tone for the second panel by summarizing some changing features of the global economy. For many decades, she said, Germany and the United States had dominated the world in economic competitiveness, while countries such as China and India had provided cheap labor at the expense of environmental and social standards. She noted the emerging countries’ argument that they had no obligation to slow growth for the sake of lowered global warming, since the problem had been initiated mainly by industrialized countries.

This situation was rapidly changing, she said, as India, and especially China, have emerged as serious global competitors for customers as well as for natural resources. But many people feel that this emergence was propelled by a free-rider mentality, lax intellectual property rules, favorable exchange rates, and trade barriers. She introduced the second panel with a series of interrelated questions: What can German and U.S. companies do to better compete and cooperate in the face of newly competitive countries? What can universities and governments do to support these companies? Is there a way for emerging economies to grow without harming the environment?

Suggested Citation:"Panel II: Competition and Cooperation in a Global Economy." National Research Council. 2012. Meeting Global Challenges: German-U.S. Innovation Policy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/13488.
×

CHINESE AND INDIAN INVESTMENTS AND ECONOMIC STRATEGY

Carl Dahlman
Henry R. Luce Associate Professor
Georgetown University School of Foreign Service
and
Member, U.S. National Academies Committee
on Comparative National Innovation Policies

Dr. Dahlman said he would discuss how the emergence of China and India as economic powers was creating a new global balance. One feature of this change was a period of tremendous uncertainty, he said, including the recent financial crisis that has affected not just developed countries but the whole world. Another feature was a new cast of competitors who are changing the global landscape. He mentioned also several new “binding constraints,” including global climate change and higher costs of capital that are “in the offing.”

One way to measure global change, he said, was in terms of purchasing power parity over the past three decades. The economically advanced countries, he said, had been generating about 64 percent of global GDP in 1980, but this figure had dropped to about 53 percent in 2009. China had risen from earning from 2 percent of GDP to 12.5 percent, and India had rise from 2.24 percent to 5 percent. The EU had lost relative share, dropping from 18.5 percent in 2000 to 15 percent in 2009; it had also lost population while the developing nations rose. The United States had dropped in PPP from 22.5 to 20.5 percent.

The economic crisis that began in 2008 also affected China and India differently. The crisis had the largest impact on the developed economies because it emerged from the financial sector of the United States and Europe, and spread elsewhere from there. GDP growth in developing countries did not turn negative in China and India, but continued to grow at 8 to 9 percent per year; both countries are expected to continue to grow three to four times faster than the rest of the world. Africa is also growing relatively fast, he said, primarily because of an interdependent relationship with China, to which it exports commodities.

As the largest of the emerging economies, China and India are becoming more important not only in terms of trade, but also in activities related to tertiary education, science and engineering, journal articles, patenting, inward and outward foreign investment, and geopolitical policies, many of which place increasing pressures on the global economy and the environment.

Two Millennia of Economic History

Dr. Dahlman reviewed the last two millennia of economic history and the relative dominance of China and India. For the first thousand years, he said,

Suggested Citation:"Panel II: Competition and Cooperation in a Global Economy." National Research Council. 2012. Meeting Global Challenges: German-U.S. Innovation Policy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/13488.
×

China and Indian represented roughly one third and one quarter respectively of the entire world’s economic activity in terms of purchasing power parity. India’s share has declined during most of the second millennium, turning steeply downward around 1700 to only a few percent, while China’s share peaked at around 1820 and then dropped even more steeply to about 5 percent by World War II. Meanwhile the share of Europe, at around 10 percent for the first millennium, began a steady rise around 1000, accelerating during the industrial revolution to about a third of all economic activity by 1870 while the whole global pie expanded. After a 40-year plateau of dominance, Europe began a decline after World War I that continues today. The United States soared from near zero in 1700 to a peak of about 27 percent in 1950, when it, too, began to turn down. Just about then, China’s share was bottoming at around 3-4 percent and it began the rapid reversal that continues today; its share is today about 14 percent as it rises toward the downward paths of the EU and United States.

Warning that projections of economic growth cannot be precise, he said that at least an approximate picture could be drawn for the next decade or so. Citing IMF data for growth rates of the eight largest economies from 2000 to 2010, he discerned “a strong indication that in terms of PPP, China’s economy will be as big as that of the United States around 2016, and then it will become larger.” India’s economy, he said, will move into third place (passing Japan) and continue its own climb at a slightly slower rate than China. These changes would occur slightly more slowly if calculated in nominal exchange rates or adjusted for overvalued currencies, but the trends would be consistent. “Both China and India face big challenges,” he said, “and history is not linear. But both China and India are becoming large players on world scene, and are likely to become larger and more important over time.”

Generous Investments in Education

The trend in both China’s and India’s growth is accompanied by generous investments in education, especially in the case of China, which by 2007 already had more students at the tertiary level (25 million) than the United States (17 million) or India (almost 13 million). China also graduates about seven times as many graduates in science and engineering at the baccalaureate level as the United States. While the quality of graduates at this level is criticized, a similar picture emerges at the PhD level, which is considered generally sound. Using data from the National Academies, he showed that 15 years ago, China produced only about 2,000 science and engineering PhDs; by 2007 this figure had risen eleven-fold to 22,000. In the United States the population of PhD graduates rose from 17,000 to 23,000 in the same period, but the number includes about 11,000 foreign-born PhDs, so it is really only half as large. In addition, Chinese students studying in China are staying in China; Chinese and Indian students in the United States are staying for shorter periods and returning home in greater proportion to well-paying opportunities in companies and university labs.

Suggested Citation:"Panel II: Competition and Cooperation in a Global Economy." National Research Council. 2012. Meeting Global Challenges: German-U.S. Innovation Policy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/13488.
×

One outcome of the expanded pool of Chinese being educated in science and engineering is a larger population of researchers. Between 1995 and 2007, the total number of researchers in the United States rose by 27 percent to 1.4 million, while the number of researchers in China almost nearly tripled to nearly the same total.

Dr. Dahlman then showed a graph plotting R&D spending as a percentage of GDP against R&D researchers per one million people for 2007. The United States was spending the most, with a value of 381, and Japan was second at 143. If the numbers are adjusted for 2010, he said, China would now be the largest. From 15 years ago, China has changed from spending 0.5 percent of GDP on R&D to spending 1.6 percent today; it plans to increase this share to 2 percent in the next few years, and to 2.5 by 2020. “They are not as efficient as the United States yet because they are learning how to improve their management skills,” he said, “but they are investing heavily in that.”

Science and Engineering Outputs

He reviewed some of the outputs resulting from this effort. Between 1988 and 2008, China’s production of science and engineering articles rose from near zero to about 60,000, surpassing Japan and Germany. In patent applications between 1883 and 2008, China has risen from virtually zero in the late 1980s to about 300,000, third after only the United States and Japan.15 In trademark applications, again mapped from 1883 to 2008, German and then Japan were leaders, and then China had soared ahead in domestic applications. “They are making a very big effort,” he said, “going from a focus on imitation, which they have done well, to tapping global knowledge, to beginning to invest on their own account. They still have a long way to go in terms of quality, but in many areas they’re moving to be leaders in scientific and technical publications.”

China is having big impact, because of its larger size, faster growth, greater integration to the international system, and more strategic government, he said. India is still much farther behind, but is catching up and “will have the level of investments China now has in about 10 years. It will be the world’s third-largest economy in PPP by 2014, and fourth-largest in nominal terms by 2021.”

Benefits and Challenges from China and India

The rapid growth of China and India, he said, brings many benefits. China, in about 15 years, has lifted about half a billion people out of poverty. It has created growing markets for goods and services. According to IMF data,

_____________________________

15He cautioned that patent data are uneven because the rules differ by country, with some countries, including China and Japan, allowing patents for “smaller pieces of the pie.”

Suggested Citation:"Panel II: Competition and Cooperation in a Global Economy." National Research Council. 2012. Meeting Global Challenges: German-U.S. Innovation Policy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/13488.
×

more than 50 percent of net world growth between 2008 and 2011 has been generated just by China. “Of course we are happy to see that. That means opportunities for exports of goods and services, and foreign investment. And of course when they produce anything, they create competitive pressures which lower the cost of goods and services they export.” China is also a growing source of capital and direct foreign investment abroad. The country has been an important investor in U.S. treasuries, so that even though China is a poor country in terms of per capita GDP—which is about 1/15th that of the United States—they are a net capital exporter. About three million students are studying outside China at the tertiary level, contributing to the research effort of developed countries. Increasing R&D and innovation help the world to improve the use of resources and address other global issues.

At the same time, their rapid growth brings challenges. Their low-cost dominance of some foreign markets brings economic suffering to domestic U.S. industries. China maintains a market reserve for particular products they manufacture. They demand a great deal of technology sharing, such as source code, from foreign partners in joint ventures; they restrict access to their markets; and they impose government procurement rules and standards, all of which create frictions. IPR piracy continues to drain profits from companies. “What is happening,” he said, “is a gigantic rebalancing of relative wages between these two hungry new entrants and the developed world. The total world labor force has increased by a factor of four between 1980 and now, and a large part of the change is China.”

Putting Pressure on the Environment

Dr. Dahlman turned to the effect of this rapid growth on the environment, showing a graph of the ecological footprint of the 10 largest “users” of the environment in 2007. The ecological footprint is the total area of land and sea used by people, included the area needed to provide resources and absorb wastes, such as CO2 emissions. In 2005 the United States had the biggest footprint; by 2007, when the latest data were compiled, China had the biggest. He said that by one accounting method, China has a net environmental deficit equivalent to 14 percent of the world’s bio-capacity. Europe as a whole has net deficit of 12 percent, the United States of 10 percent, and India of 4 percent; Brazil and Russia have surpluses. “This shows that the way we are doing development is not sustainable,” he said. “And these two countries are putting a lot of pressure on the global system. So we have to rethink our development models toward major investments in innovation. We’re not yet doing enough at a global level.”

One reason for this, he said, is that governance at the global level is not up to the challenges. Each country pursues its own natural advantage at a country level, paying little attention to the global system. “To some extent,” he said, “China has benefited by free-riding in terms of rules of trade, exchange rate, IP, piracy, and now using its very large market to draw technology from the

Suggested Citation:"Panel II: Competition and Cooperation in a Global Economy." National Research Council. 2012. Meeting Global Challenges: German-U.S. Innovation Policy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/13488.
×

rest of the world. We have to discuss how to allocate resources, both physical and human, and provide social safety nets.” He listed a series of topics for which global cooperation is urgently needed:

•     Preparing with pandemics.

•     Improved energy efficiency and alternative energy technologies.

•     CO2 sequestration.

•     Diseases of aging populations.

•     Natural resource technologies.

•     Sustainable development strategies.

Dr. Dahlman concluded that nations now share a “demanding, dynamic, and uncertain global environment” with big new players and many possible uncertainties, from another financial crisis to internal problems disrupting China. “This talk is meant as a stimulus to understand that the world is in tremendous flux, with big challenges, and big constraints. It is an invitation to our North Atlantic alliance to better collaborate in rebalancing our global systems.”

INNOVATION AND TRADE

Alan Wm. Wolff
Dewey & LeBoeuf LLP
and
Chair, U.S. National Academies Committee
on Comparative National Innovation Policies

Ambassador Wolff said he had learned from Professor Dahlman’s talk much about the world economy on the macro scale—a broad view of the global system “from 30,000 feet.” He said he would now offer a closer look at several particular economies, especially those of Taiwan and the People’s Republic of China, “from 10,000 feet,” in order to understand how very organized societies, led by their government, could influence their standing in that same global system.

He said that he had spent years as a trade negotiator with Japan, and that its growth had begun through dependence on a state-industrial partnership, a closed home market, and a form of state-run capitalism. Taiwan was also resource-poor, and decided to adopt much the same strategy—a state-led, market-oriented innovation policy. Part of the strategy was the emulation of the large U.S. research parks, such as Research Triangle Park, Route 128 in Boston, and Silicon Valley. Taiwan assembled its own version, the Industrial Technology Research Institute (ITRI), in 1973, followed by Hsinchu Science Park in 1980 and Southern Taiwan Science Park in the 1990s.

Suggested Citation:"Panel II: Competition and Cooperation in a Global Economy." National Research Council. 2012. Meeting Global Challenges: German-U.S. Innovation Policy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/13488.
×

The Strategy of ITRI

ITRI’s strategy was to invest in infrastructure, with government partnership, through the purchase of common facilities, equipment, and tools for strengthening existing facilities—much as Japan had entered the semiconductor business and began building integrated circuits. Japan pooled the knowledge of the big labs, brought in the six vertically integrated electronics companies, and quickly developed first the 64 DRAM and then the 256 DRAM, overwhelming both European and U.S. competitors.

ITRI propelled local industry by disbursing seed money to universities, other research institutions, and separate projects focused on key technologies and components. Products were moved through 13 ICT research units from incubators into the private sector. Priority fields were identified, including ICT, advanced manufacturing, biomedicine, nanotechnology, materials and chemicals, and energy/environment. A hub linking science parks, universities, and companies in Taiwan’s north, central, and southern zones was established to coordinate the whole innovation system.

70 Percent of the World’s IC Foundries

In 1979, the semiconductor make UMC became ITRI’s first spinoff; TSMC followed eight years later, in 1987. By 2006, TSMC and UMC controlled 70 percent of the world’s IC foundry business. By the Q4 of 2010, Taiwan’s revenue share of the world IC industry was about 18 percent.

Having become largest notebook producer in the world, ITRI went on to pull together 47 of its companies as a Notebook Computer Alliance in 1990 to promote production cooperation. This helped to transform Taiwan into the world’s fourth-largest producer of IT hardware. By 2006, ITRI had sent 17,000 alumni into Taiwan’s workforce, some 5,000 of whom were working at the Hsinchu Science Park where they founded many new companies.

During Taiwan’s transformation into a knowledge-intensive economy, ITRI has continued to focus on its priority areas, which are now:

•     ICT.

•     Electronics and optoelectronics.

•     Materials, chemicals, and nanotechnology.

•     Medical devices and biomedical research.

•     Mechanical systems.

•     Green energy and environment.

China’s Strategy of Indigenous Innovation

The development of China really began in 1978, he said, when Deng Xiaoping opened its economy to the outside world and began a major drive to

Suggested Citation:"Panel II: Competition and Cooperation in a Global Economy." National Research Council. 2012. Meeting Global Challenges: German-U.S. Innovation Policy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/13488.
×

attract foreign direct investment. FDI was originally capital but was gradually supplemented by research and development capacity in the form of returning scientists and engineers of the Chinese Diaspora. China, like Taiwan, also supported indigenous innovation through university R&D, national labs, science and technology parks, and a strong IP environment. China’s strategies and assets included:

•     Very rapid GDP growth.

•     A large domestic market.

•     High penetration of cell phones and Internet.

•     Investment in STEM education, especially in engineering.

•     Welcoming FDI and incentivizing technology transfer.

•     Incentives for indigenous patenting.

•     Ability to fully mobilize national resources, with state planning for huge science parks.

The results of this program emerged rapidly. “In 1988,” he recalled, “you looked across the river from Shanghai to Pudong and saw only fields. If you go there today it’s one of the world’s largest S&T parks, full of high-tech companies from the United States and Europe, all contributing to China’s growth.” Overall, China has 54 state-level economic and technological development zones, and 53 national high-tech development zones. The average size of major science parks in China 10,357 acres; Research Triangle Park (RTP) in North Carolina is 7,000 acres, while the average North American research park is 358 acres. The power of successful parks is considerable; when the RTP was founded in 1950, North Carolina ranked 49th in per capita GDP; currently it ranks in the top 10.

However, Mr. Wolff cautioned, state planning is not always completely successful. “Whenever you launch an industrial policy in a specific direction, you always overshoot.” As examples he cited overproduction of steel, which Europe did, and China did later; and overproduction of solar panels and wind turbines by China. “State planning, with the vestiges of Marxism, can be a mixed blessing when there is little independent thinking,” he said, noting that China’s required courses on Marxism in some engineering schools are unlikely to foster engineering creativity or top-quality graduates. Other drawbacks of the state-run economy include continued dependence on FDI, inadequate protection of IPR, and sometimes heavy-handed attempts to force transfer of technology from foreign joint venture partners.

China’s current leaders, many of whom are engineers, have become more sophisticated. “Achieving indigenous innovation” has become a slogan, and current goals include intensive investments in crucial high-technology products, and the use of policy tools to promote indigenous innovative technologies, increase R&D spending to 2.5 percent of GDP by 2010, and support state projects to generate important strategic products.

Suggested Citation:"Panel II: Competition and Cooperation in a Global Economy." National Research Council. 2012. Meeting Global Challenges: German-U.S. Innovation Policy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/13488.
×

Difficulties for Potential Partners

At the same time, Mr. Wolff continued, the enthusiasm for “made in China” and desire to control joint ventures brings difficulties for potential partners:

•     China delayed the introduction of 3G wireless technology until it could be manufactured domestically.

•     About 80 percent of consumer electronics standards are tweaked just enough to create barriers to selling in China.

•     The use of a Trusted Computing Module (TCM) forces encryption for computers with a domestic standard.

•     Automobiles cannot be more than 49 percent produced by a foreign company, and new rules require that Chinese brands be used.

•     For wind electrical generating equipment, purchases are controlled through the use of standards, skewed procurement, and indigenous innovation. Between 2004 and 2010, wind equipment sales by Vestas, GE, and Suzlon dropped from 70 percent of the market to 13 percent because no large project of the National Development and Reform Commission has resulted in a purchase of any wind equipment from any foreign producer.

•     China planned to have all supercomputer ICs made by indigenous Chinese firms by the end of 2011.

Longer term, the government plans to continue its “make it in China” S&T strategy. Key state projects require almost all technologies, from ICs to aircraft to manned space flight, to use indigenous Chinese components. Other technologies that are restricted to Chinese-made components include:

•     Core electronic components.

•     Extremely large integrated circuits.

•     Broadband.

•     Numerical controlled machine tools.

•     Oil and gas fields.

•     Large nuclear power plants.

•     Gas-cooled reactors.

•     Genetically modified biological species.

•     New drugs.

•     Control and treatment of major contagious diseases.

Mr. Wolff summarized by reviewing the universe of government strategies used to promote innovation, which ranged from “sort of a Washington consensus of a market orientation” to the Beijing strategy of “techno-nationalism.” The Chinese strategy, he said, faced the challenge of achieving indigenous innovation while closing its markets to competitors. “We have much

Suggested Citation:"Panel II: Competition and Cooperation in a Global Economy." National Research Council. 2012. Meeting Global Challenges: German-U.S. Innovation Policy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/13488.
×

to learn from Germany in this range of possibilities,” he concluded. “What we see is that nations do take policy measures to improve their position vis-à-vis each other. We’re suffering everywhere from budget deficits, which puts pressure on federal innovation programs. Yet we must continue to invest in universities, small businesses, research parks and clusters, and new emerging technologies. We must reform immigration to attract and retain the best and brightest. And as we have learned from our partnership with Germany and other EU nations, we must continue our international cooperation on mutual long-term goals and strategic partnerships on specific research issues.”

DISCUSSION

A questioner asked how the panelists would compare immigration policies and brain drain issues in the United States and Germany. Dr. Dahlman said that part of the reason the United States has been so successful in innovation is that it has attracted the best and the brightest from all over the world. It has offered a supportive environment, access to venture capital, and favorable rules and framework conditions. However, he said, since 9/11 the nation has had almost free trade in industrial goods, somewhat constrained trade in agriculture, but no free trade in people, except at the very highest levels. “Now there are very attractive opportunities back in those countries,” he said, “so Chinese and Indian firms are actively recruiting graduates in the United States—not just their own nationals, but other nationalities. So there is a reverse brain flow.” The market for talent is global, he said, and the competition is heating up. Each country wants the most entrepreneurial and inventive people— the core of competitive advantage. So each country’s immigration environment and support policies are important.

Engelbert Beyer, Head of the Directorate for Innovation Strategies, Federal Ministry of Education and Research (BMBF), asked about the U.S.-Chinese bilateral innovation platform, and the content of some general government consultations that had taken place two weeks earlier. He asked what the panelists would suggest as a sound diplomatic strategy for Germany and Europe at this time “in regard to this rising superpower.”

Ambassador Wolff said that the talks had concerned the issue of Chinese “catalogues” of products with Chinese IP that formed the basis for government procurement. Hu Jintao had said the previous January that the Chinese government would no longer be limited to buying products from the “all Chinese” catalogues, but that change was not translated into Chinese, and nothing changed within China. In May, the U.S. treasury secretary and secretary of State, meeting with their opposite Chinese numbers, persuaded them to tell their procurement people about that change and remove the catalogues.

A continuing problem, he added, was that while the Chinese no longer have to “buy Chinese,” can still do so, and they do not need to buy non-Chinese. “Having said for seven years or so that you ought to buy Chinese IP-intensive goods from Chinese companies,” he said, “that habit has sunk in deeply at the

Suggested Citation:"Panel II: Competition and Cooperation in a Global Economy." National Research Council. 2012. Meeting Global Challenges: German-U.S. Innovation Policy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/13488.
×

state-owned enterprises. The fact that formal government procurement might be open some day without the use of these catalogues is a very minimal step. This evolution resembles Japan, which didn’t open its procurement until economic forces induced it to open up.”

On the positive side, he said—in health issues, climate change, and others, where Germany and the United States face common threats—there is room for cooperation. “Non-Chinese companies are betting that China will eventually buy wind equipment from them; otherwise, Vestas and GE and Suzlon would not be doubling their bets in China, which is what they’re doing. Their hope is that things will turn around.”

Dr. Dahlman suggested that “what we need to do in the dialogues is to have very frank, tough talk.” He underlined the problem of the Chinese government’s industrial policy, which includes both requirements of technology transfer and rules that make it difficult for foreign firms to compete. Because the market is so large and fast-growing, he said, the firms continue to go to China for short-term returns, even though they operate at a disadvantage in an uncertain climate.

Charles Ebinger of the Brookings Institution raised several questions about energy. He questioned the fate of the nuclear reactor industry that seemed to rest on a confluence of trends: Germany is discussing the abandonment of nuclear power, the United States is restrained by economic factors from building new nuclear plants, and China plans to become a major vendor in the nuclear marketplace. This, he said, would seem to weaken the opportunities of GE, Siemens, and other traditional vendors. Also, he said, the Chinese, who are heavily dependent on coal, are now building “the best coal plants in the world” and “moving rapidly to prove that sequestration of CO2 can work.”

Ambassador Wolff noted that “China is run by engineers who have a clear conception of problems they face.” As coal represents an increasing proportion of their energy use, they realize its costs in terms of pollution. At the same time, China has the largest wind energy installation to date, and is pressing ahead on its renewable energy infrastructure.

Suggested Citation:"Panel II: Competition and Cooperation in a Global Economy." National Research Council. 2012. Meeting Global Challenges: German-U.S. Innovation Policy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/13488.
×
Page 68
Suggested Citation:"Panel II: Competition and Cooperation in a Global Economy." National Research Council. 2012. Meeting Global Challenges: German-U.S. Innovation Policy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/13488.
×
Page 69
Suggested Citation:"Panel II: Competition and Cooperation in a Global Economy." National Research Council. 2012. Meeting Global Challenges: German-U.S. Innovation Policy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/13488.
×
Page 70
Suggested Citation:"Panel II: Competition and Cooperation in a Global Economy." National Research Council. 2012. Meeting Global Challenges: German-U.S. Innovation Policy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/13488.
×
Page 71
Suggested Citation:"Panel II: Competition and Cooperation in a Global Economy." National Research Council. 2012. Meeting Global Challenges: German-U.S. Innovation Policy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/13488.
×
Page 72
Suggested Citation:"Panel II: Competition and Cooperation in a Global Economy." National Research Council. 2012. Meeting Global Challenges: German-U.S. Innovation Policy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/13488.
×
Page 73
Suggested Citation:"Panel II: Competition and Cooperation in a Global Economy." National Research Council. 2012. Meeting Global Challenges: German-U.S. Innovation Policy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/13488.
×
Page 74
Suggested Citation:"Panel II: Competition and Cooperation in a Global Economy." National Research Council. 2012. Meeting Global Challenges: German-U.S. Innovation Policy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/13488.
×
Page 75
Suggested Citation:"Panel II: Competition and Cooperation in a Global Economy." National Research Council. 2012. Meeting Global Challenges: German-U.S. Innovation Policy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/13488.
×
Page 76
Suggested Citation:"Panel II: Competition and Cooperation in a Global Economy." National Research Council. 2012. Meeting Global Challenges: German-U.S. Innovation Policy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/13488.
×
Page 77
Suggested Citation:"Panel II: Competition and Cooperation in a Global Economy." National Research Council. 2012. Meeting Global Challenges: German-U.S. Innovation Policy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/13488.
×
Page 78
Next: Panel III: Human Resources, Competition for Manpower, and the Internationalization of Labor »
Meeting Global Challenges: German-U.S. Innovation Policy: Summary of a Symposium Get This Book
×
Buy Paperback | $49.00 Buy Ebook | $39.99
MyNAP members save 10% online.
Login or Register to save!
Download Free PDF

While nations have always competed for territory, mineral riches, water, and other physical assets, they compete most vigorously today for technology-based innovations and the value that flows from them. Much of this value is based on creating scientific knowledge and transforming it into new products and services for the market. This process of innovation is complex and interdisciplinary. Sometimes it draws on the genius of individuals, but even then it requires sustained collective effort, often underpinned by significant national investments. Capturing the value of these investments to spur domestic economic growth and employment is a challenge in a world where the outputs of innovation disseminate rapidly. Those equipped to understand, apply, and profit from new knowledge and technical advances are increasingly able to capture the long-term economic benefits of growth and employment.

In response to this new, more distributed innovation paradigm, the National Academies Board on Science, Technology, and Economic Policy (STEP) convened leading academics, business leaders, and senior policymakers from Germany and the United States to examine the strengths and challenges of their innovation systems. More specifically, they met to compare their respective approaches to innovation, to learn from their counterparts about best practices and shared challenges, and to identify cooperative opportunities. The symposium was held in Berlin and organized jointly by the German Institute for Economic Research (DIW) and the U.S. National Academies with support of the German Federal Ministry for Education and Research (BMBF) and the American Embassy in Berlin.

Both U.S. and German participants described common challenges on a wide variety of issues ranging from energy security and climate change to low-emissions transportation, early-stage financing, and workforce training. While recognizing their differences in approach to these challenges, participants on both sides drew out valuable lessons from each other's policies and practices. Participants were also aware of the need to adapt to a new global environment where many countries have focused new policy measures and new resources to support innovative firms and promising industries. Meeting Global Challenges: U.S.-German Innovation Policy reviews the participants meeting and sets goals and recommendations for future policy.

  1. ×

    Welcome to OpenBook!

    You're looking at OpenBook, NAP.edu's online reading room since 1999. Based on feedback from you, our users, we've made some improvements that make it easier than ever to read thousands of publications on our website.

    Do you want to take a quick tour of the OpenBook's features?

    No Thanks Take a Tour »
  2. ×

    Show this book's table of contents, where you can jump to any chapter by name.

    « Back Next »
  3. ×

    ...or use these buttons to go back to the previous chapter or skip to the next one.

    « Back Next »
  4. ×

    Jump up to the previous page or down to the next one. Also, you can type in a page number and press Enter to go directly to that page in the book.

    « Back Next »
  5. ×

    Switch between the Original Pages, where you can read the report as it appeared in print, and Text Pages for the web version, where you can highlight and search the text.

    « Back Next »
  6. ×

    To search the entire text of this book, type in your search term here and press Enter.

    « Back Next »
  7. ×

    Share a link to this book page on your preferred social network or via email.

    « Back Next »
  8. ×

    View our suggested citation for this chapter.

    « Back Next »
  9. ×

    Ready to take your reading offline? Click here to buy this book in print or download it as a free PDF, if available.

    « Back Next »
Stay Connected!