China is investing
more money into research and development, helping it become a superpower in
innovation. Image: REUTERS/Kim
Kyung-Hoon
07 Feb 2018
Formative Content
Last
year President Xi Jinping outlined his vision to make China the global
leader in political, economic, military and environmental issues over the next
three decades.
Now,
comprehensive data from the National Science Foundation reveals
that China is already well on its way to becoming a superpower in the key areas
of science and innovation.
China
is the second-largest spender on research and development (R&D) after the
US, accounting for 21% of the world’s total of nearly $2 trillion in 2015.
China’s
spending on R&D grew by an average of 18% per year between 2010 and 2015 –
more than four times faster than US spending.
And,
although the US still spends more on R&D, China’s rapid growth means it is
likely to take the lead within the next five to 10 years.
The light pink line
shows China’s sharp increase in R&D spending.
Image: National
Science Foundation
Research
and development is an indicator of investment in technology and future
capabilities, and therefore plays a critical role in the innovation process and
the creation of new products, processes and services.
Student
power
Another
key measure of innovation and technological advances is the number of students
studying science and technology. Here too, China is excelling and has already
overtaken the US, partly because of the size of its population.
Between
2000 and 2014, the annual number of Chinese graduates in science and
engineering went from about 359,000 to 1.65 million. Over the same period, the
comparable number of US graduates went from about 483,000 to 742,000.
The orange line shows
that China has more science and engineering graduates than anywhere else. Image: National
Science Foundation
An
innovative, knowledge-based economy requires a workforce with high levels of
science and engineering skills and an education system that can produce these
workers in sufficient numbers, according to the National Science Board’s
report.
China’s
new generation of scientists is also venturing into more demanding and
high-tech areas, such as supercomputers and smaller jetliners, as well as its
more traditional expertise in assembling sophisticated components made
elsewhere.
Turning
innovation into reality
There
are two other key measures of innovation: patents – which show the number of
inventions; and venture capital – which provides the financial backing to turn
those inventions into products.
In
both these areas, China is gaining ground, although still lagging behind the
US.
The patent market is
dominated by the US, Japan and the EU. Image: National
Science Foundation
The
US Patent and Trademark Office grants patents to inventors worldwide, with over
300,000 patents granted in 2016, primarily to the US, Japan and the EU.
But
US patents to inventors from developing countries have risen from under 1% in
2000 to 6% in 2016, with China (4%) and India (1%) accounting for the bulk of
these.
China’s share of
venture capitalist funds is growing, while the US share is in decline.
Image: National
Science Foundation
Access
to finance – through venture capital investment – is the last piece of the
jigsaw needed to spur innovation.
The
US attracted slightly more than half of the $131bn of the venture capital funds
available worldwide. Nevertheless, its share of the pot is in decline while
China’s share continues to rise sharply.
Investment
in China rose from a low base between 2006 and 2013, and then leapt from $3bn
to $34bn in 2016. This means that China’s global share of venture capital funds
has now risen to 27%.
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