Wednesday, November 02, 2005

REALITY CHECK FOR CHINA: After reading news articles published over the last year, one may conclude that it is only a matter of time before the technical juggernaut that is China will become the dominant innovative force in the world. Just about every business and law firm has been aggressively courting Chinese partnerships and seeking Chinese clients to become a part of this growing movement. And judging from China's recent performance, especially over the last 5 years, they seem well along their way.

However, according to an article written by Guy de Jonquieres from Financial Times, it may be premature to conclude that China's predicted dominance is destiny. While it is given that many of the cited statistics tell only part of the story, some of the extrapolations made from these statistics actually paint a misleading picture.

For one, China produces two-and-a half times more graduates each year than the US. But in proportion to its population, it produces barely half as many - and has only one-eighth as many engineers engaged in research and development. And when this fact is considered in relation to its huge development needs, the country may have too little skilled manpower, and not a glut.

Also, the country's sheer output of technical publications is not as relevent as the significance of the publications, as judged by the number of times the publications are cited by researchers elsewhere. Under this standard, China doesn't fare as well.

Furthermore, there's the issue of Intellectual Property - IP protection is still a very new concept in China, and there are few incentives for Chinese companies to invest subtantially in matters like patent protection. China's apparent awakening to intellectual property (and particularly the exponential increase in the filing of patents), has more to do with the fact that most of the filings are being done by government research centers, rather than privately-owned corporations. This is a potentially damaging policy - in Japan and South Korea, 60 per cent of patents held by government research centers remain unused. And to date, there is little that connects state-funded R&D to commercially successful products.

The article goes on to point out other issues that China must address if they are to continue their spectacular rise in the global market, including reforming VC funding and approaches taken by the government towards national security. But before any of these issues are addressed, no one is in a position to preordain China's dominance: "[i]n truth, the country's race to innovate is a giant experiment. We simply cannot know how it will turn out. Anyone who asserts otherwise deserves a sceptical hearing."

1 Comentário:

Dram Man said...

I can add a couple cents about Korea's experince. A couple months ago the Korean Minstriy of Commerce, Industry, and Energy (the minstry the Korean Intellectual Property Office is under)came out and basicaly said most of the patents Koreans own are worthless. All this is somewhat amusing since it was the MOCIE that gave many grants for these pantents.


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