Building the 21st Century U.S.-China Cooperation on Science, Technology, and Innovation (2011) / Chapter Skim
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I INTRODUCTION
I INTRODUCTION
Pages 1-32
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From page 3... ...
While the United States has long been the world leader in science and new technologies, the National Academy of Sciences, in its 2007 report, Rising Above the Gathering Storm, warned of an abrupt loss of U.S. global leadership in science, technology, and 1 On March 15, 2007, Chinese President Wen Jiabao in a press conference following the National People's Congress described China's economic model as "unstable, unbalanced, uncoordinated, and unsustainable." The remarks have been interpreted to mean that China's economy depends too heavily on fixed investment, manufacturing, and exports rather than private consumption and social equity.
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While the United States and China are the world's top two spenders on research and development, they are also by far the world's two biggest emitters of greenhouse gasses.5 And aging populations in both countries struggle with cancer and other chronic diseases. Indeed, a key premise of the symposium was that these and other global challenges require innovative breakthroughs, which in turn would 3 The report notes that "We fear the abruptness with which a lead in science and technology can be lost -- and the difficulty of recovering a lead once lost, if indeed it can be regained at all." See The National Academy of Sciences/National Academy of Engineering/Institute of Medicine, Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future, Washington, DC: The National Academies Press, 2007.
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cooperation in science and technology at the commercial levels and increasingly at the university level, Deputy Assistant Secretary of State Anna Borg noted in her symposium presentation that "the United States and China are, in every sense, building a global partnership."She also identified a number of areas for closer cooperation between the two governments. Ren Weimin of China's National Development and Reform Commission agreed.
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. 11 The Chinese policy for indigenous innovation, zizhu chuangxin, was introduced in a 2006 state-issued report, "Guidelines on National Medium- and Long-Term Program for Science and Technology Development." Some Chinese sources describe the policy as encouraging research institutes and universities to conduct innovative research and create new intellectual property to meet
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sales of some high-performance computers, advanced semiconductor manufacturing equipment, and numerically controlled machine tools to China.14 They noted that these curbs have, for example, prevented Chinese companies from buying national demands and to build up China's innovation capacity. Many foreign firms operating in China however believe that the policy would seek to transfer their patents and other intellectual property to China in order to compete for technology and equipment procurement by the Chinese government.
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"Without the rapid development of science and technology it will become impossible to build the national economy," Deng declared.17 More recently, in a report to the 17th National Congress of the Communist Party of China, President Hu Jintao stated that "Innovation is the core of our national development strategy and a crucial link in enhancing the overall national strength." This high level commitment has been backed by a sharp rise in China's commitment to R&D spending -- from a six percent share of global R&D spending in 1999 to an estimated 12.2 percent share in 2010.18 Over the past 15 years, China has launched many initiatives to boost science, develop high-tech industries, and reduce its dependence on 15 The text in this section provides a brief historical background on the evolution and current challenges facing China's innovation system. While not directly based on the discussions held at the symposium, the text here provides additional context to the conference discussions.
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The Torch Program, meanwhile, promotes development of high-technology industrial zones.21 "Indigenous innovation" has become a top priority in the past five years. As "guiding principles for science and technology undertakings," China's National Medium- and Long-Term Program for Science and Technology Development for 2006 to 2020 lists "indigenous innovation, leapfrogging in priority fields, enabling development, and leading the future."22 The document says that "in areas critical to the national economy and security, core technologies cannot be purchased," and that China must "master core technologies in some critical areas, own proprietary intellectual property rights, and build a number of internationally competitive enterprises." The plan calls for boosting China's gross R&D spending to 2.5 percent of GDP by 2020, for science 19 For a comprehensive review of China's innovation policies, see Micah Springut et al., "China's Program for Science and Technology Modernization: Implications for American Competitiveness." Prepared for the U.S.-China Economic and Security Review Commission.
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26 A survey of nearly 300,000 of industrial enterprises found 53 percent of large enterprises, 86 percent of medium-sized, and 96 percent of small in 2004 through 2006 did not have continuous research and development. As a result, they don't own core technologies and rely 23 State Council of China, "National Medium- and Long-Term Program for Science and Technology Development, 2006-2020," ( |
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They include weak intellectual property protection, shortages of capable and skilled personnel, an over-emphasis on export manufacturing of commodity goods, and weak linkages between government-funded research institutions and the private sector.28 China's Innovation Agenda Speaking at the conference, some Chinese officials said that they were aware of these shortcomings. In his presentation, Yang Xianyu of the Ministry of Science and Technology said that Chinese businesses have been slow to invest in R&D and that "a key challenge is to transform China's economic development pattern so that it is driven by innovation." To spur investment in innovation, the government is offering generous tax incentives to companies in "high-priority" sectors and that meet certain R&D investment benchmarks, Mr.
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The United States also still produces many high-technology start-ups, many of which like Google and Microsoft have rapidly grown to become world leaders. As the National Academies' 2007 report, Rising Above the Gathering Storm30 explained, however, there is mounting concern that America's global competitiveness is eroding, largely due to underinvestment in scientific research, falling math and science skills, and engineering talent shortages.
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COOPERATION ON RENEWABLE ENERGY INNOVATION China's Renewable Energy Imperative Speaking at the symposium, Ren Weimin of the National Development and Reform Commission and Kristina Johnson, then Under Secretary at the Department of Energy, described how both nations can gain through collaboration in renewable energy innovation. Renewable energy innovation is one area where both China and the United States stand to gain from collaboration.
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China has ambitious targets for clean energy. Beijing wants non-fossil fuels to account for 15 percent of consumption by 2020, 20 percent by 2030, and one-third by 2050.34 That compares to 8.3 percent now.
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While the United States wants to demonstrate global leadership in energy science and technology, its approach to innovation will be "open and collaborative," "By working together, we can leverage our comparative advantages in innovation and address this global climate challenge," she said. Some 70 percent of U.S.
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The U.S.-China Clean Energy Research and Development Center, announced in July, shows how close the relationship is becoming. Each nation will invest $75 million over five years for joint research on energy-efficient buildings, vehicles, and carbon capture and sequestration for coal.38 Collaborating on Renewable Energy Research and Commercialization The National Renewable Energy Laboratories (NREL)
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Comparing Policies on Innovation Parks and Clusters Research parks are increasingly seen as an effective tool to create dynamic clusters of research, manufacturing, and services that encourage innovation and foster economic growth.39 U.S. and Chinese speakers at the conference offered contrasting approaches to the development of these innovation clusters.
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agencies had been operating in "silos," Ms. Lew noted that a key feature of the Obama Administration's strategy is to coordinate programs of various federal agencies to support "holistic, integrated solutions to building regional economies." Initiatives launched in the United States over the past year include the Energy Regional Innovation Clusters (ERIC)
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(See Box A.) Yang Xianwu of the Ministry of Science and Technology noted in his symposium remarks that the Chinese government is supporting the development of innovation clusters by financing the establishment of laboratories, engineering centers and large science facilities.
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NOTE: "Average North American Research Park" data are from "Characteristics and Trends in North American Research Parks: 21st Century Directions," commissioned by AURP and prepared by Battelle, October 2007; "Average IASP Member Park" data are from the International Association of Science Parks annual survey, published in the 2005-2006 International Association of Science Parks directory. China has made rapid progress in higher education, Carl Dahlman of Georgetown University observed.
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Universities produce more than one-third of Chinese patents for inventions and 60 percent of published science and engineering papers. Other key elements of this ecosystem are the Chinese Academy of Sciences, the Chinese Academy of Social Sciences, research institutes specializing in economics and social development, and the Chinese research organizations of multinationals such as IBM and Cisco.
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Vernon Ruttan has noted that nearly all the major world innovation waves of the second half of the 20th century were characterized by government initiated linkages across the innovation system. See, Vernon W
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Nor were some of America's most important innovation clusters, such as Silicon Valley or Boston's Route 128. The question now is how to adapt the U.S.
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He cited a World Bank study that concluded a 10 percentage point increase in broadband penetration rates can increase economic growth by 1.3 percentage points in developing nations and by 1.2 percent in advanced nations.46 Over the next five years, ICT is expected to create $5 trillion in new economic activity. China's Broadband Strategy China views broadband infrastructure as a catalyst for new growth industries such as software, logistical services, information technology outsourcing, and a wide range of digital devices.
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The Recovery Act earmarked $7.2 billion in grants to stimulate broadband deployment throughout the U.S and required the Federal Communication Commission to develop a National Broadband Plan.48 The plan's "extraordinarily ambitious" goals cover not only broadband access but also its use in everything from health care to managing household energy consumption. The plan calls for affordable access with download speeds of at least 100 Mbps to 100 million U.S.
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The Department of Agriculture is spending $2.5 billion to deploy broadband in rural areas. The aim is to make it feasible for every home to connect to high-speed Internet, he said, "along the lines of what the United States did in the 1930s, when it determined it was a priority to get telecommunications distributed throughout the U.S." These investments are part of a larger strategy to use broadband infrastructure to promote economic growth and achieve national priorities.
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Joint research by the National Cancer Institute and Chinese scientists began in the 1970s with seminal studies of cancers related to certain environments, such as near tin mines or in textile mills. Many of these studies led to worldwide regulation, Dr.
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Chinese researchers were among the first to identify the SARS genome. The National Cancer Institute is working with Chinese institutes on an ambitious project to sequence genomes of all cancers.
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technology export curbs and visa policies are also significant obstacles to closer collaboration.52 Intellectual Property Protection Ms. Borg also noted that some Chinese practices hurt innovation, such as weak protection of intellectual property rights.
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He acknowledged that China's innovation system "cannot be separated from the rest of the world." He noted that China has signed science and technology cooperation relationships with 152 nations and regions, sent science diplomats to 45 nations, and has joined 350 different international science and academic organizations, in which 265 Chinese scientists hold posts. China has participated in the Human Genome Project and European Galileo Program, which is developing a satellite for geo-positioning systems.
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Chamber of Commerce has called the regulatory environment in China increasingly difficult for foreign companies citing government procurement rules that favor local companies, a postal law that excludes foreign suppliers such as FedEx Corp. and curbs on rare-earth exports.
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Nations with state-led innovation systems "are all trying to work their way to the bottom," observed the University of Maryland's Mote, "while the United States is trying to work its way to the top." Which mix of innovation policies and investments proves most effective in tackling enormous global challenges such as climate change, energy, and medical care for aging populations remains to be seen. As we see in the proceedings, summarized in the next chapter, the participants in this workshop highlighted a variety of areas where cooperation between China and the United States can help address these global challenges.
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