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.”


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

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