The push for industrial policy is welcome and this chart pack makes it easier to explain to people. As far as I know there is always a missing piece in industrial policy. For example, 6 or the 7 Darpa technologies are the foundation of the massive valuation gain for Google, Facebook, Microsoft, Apple, Salesforce, Airbnb, DropBox, Amazon, etc. over the past 20 years. A thousand years ago, when land was the foundation of wealth, taxes were collected on that wealth. Every year.
We need to do the same. And for those who celebrate balanced budgets, we get those too.
Interesting idea. These tech giants are reaping disproportionately large profits from technologies initially funded by public money. This situation definitely warrants a closer look
Great piece. I wonder if it is worth noting that the same needs exist for R&D on faster and more universally effective education and training technologies. In many sectors, from power grid operators to company trainers, higher competence and great numbers of trained personnel are needed.
Absolutely, the need for advanced R&D in education and training technologies is critical, especially considering the lack of suitable workforce for many of the projects spurred by these new industrial policies.
Tiny bits of that advanced R&D are happening. For example, I consult on a small-business contract from the US Dept of Energy to build intelligent training systems for power grid operators. However, because the effort is not systematic, the Government doesn't have an overall sense of what it is supporting and how that might fit into an overall R&D plan for workforce development.
Interesting read and will be looking forward to the next part. Another approach that the US government used in the last years is to assume the role of Strategic Investor in promising technologies / products in their infancy through In-Q-Tel (focusing mainly in national security). This is another form of catalytic government, sending signals to providers of patient capital on where the next big opportunities are. Perhaps something similar could be created for environmental sustainability.
industrial intellectual property sharing requirements for market access by China combined with infant industry protection for nascent industries has been a key factor in their technological ascendency
1. Are there specific technologies where China now leads the world because of their innovation investment strategy?
For example, we read a lot about China’s investments in the battery supply chain - all the way from mining to manufacturing and the final deployment in products like autos. For example, in this case, does China now have better batteries than the rest of the world?
2a. Did you also come across data about the relative efficiency of public funding of research and development vs private funding of these and the possible reasons for that? (Efficiency = dollar invested per parent; dollar invested per patent-based product(s); dollar invested for revenue generated from these products/services
2b. Similarly, is there any data that compares the relative efficiency of investments in innovation between a China and the rest of the developed world and potential reasons for this?
For 2a) There are metrics like you mention however they often don't capture the strengths of public research - foundational knowledge that enables other commercial technologies to be built.
For 2b) I haven't seen any patent/research spend measures I trust - one of the criticisms of China's patent output (which is high) is that it does gauge quality.
The push for industrial policy is welcome and this chart pack makes it easier to explain to people. As far as I know there is always a missing piece in industrial policy. For example, 6 or the 7 Darpa technologies are the foundation of the massive valuation gain for Google, Facebook, Microsoft, Apple, Salesforce, Airbnb, DropBox, Amazon, etc. over the past 20 years. A thousand years ago, when land was the foundation of wealth, taxes were collected on that wealth. Every year.
We need to do the same. And for those who celebrate balanced budgets, we get those too.
Interesting idea. These tech giants are reaping disproportionately large profits from technologies initially funded by public money. This situation definitely warrants a closer look
Great piece. I wonder if it is worth noting that the same needs exist for R&D on faster and more universally effective education and training technologies. In many sectors, from power grid operators to company trainers, higher competence and great numbers of trained personnel are needed.
Absolutely, the need for advanced R&D in education and training technologies is critical, especially considering the lack of suitable workforce for many of the projects spurred by these new industrial policies.
Tiny bits of that advanced R&D are happening. For example, I consult on a small-business contract from the US Dept of Energy to build intelligent training systems for power grid operators. However, because the effort is not systematic, the Government doesn't have an overall sense of what it is supporting and how that might fit into an overall R&D plan for workforce development.
Interesting read and will be looking forward to the next part. Another approach that the US government used in the last years is to assume the role of Strategic Investor in promising technologies / products in their infancy through In-Q-Tel (focusing mainly in national security). This is another form of catalytic government, sending signals to providers of patient capital on where the next big opportunities are. Perhaps something similar could be created for environmental sustainability.
industrial intellectual property sharing requirements for market access by China combined with infant industry protection for nascent industries has been a key factor in their technological ascendency
This is rich analysis. Thanks for sharing.
1. Are there specific technologies where China now leads the world because of their innovation investment strategy?
For example, we read a lot about China’s investments in the battery supply chain - all the way from mining to manufacturing and the final deployment in products like autos. For example, in this case, does China now have better batteries than the rest of the world?
2a. Did you also come across data about the relative efficiency of public funding of research and development vs private funding of these and the possible reasons for that? (Efficiency = dollar invested per parent; dollar invested per patent-based product(s); dollar invested for revenue generated from these products/services
2b. Similarly, is there any data that compares the relative efficiency of investments in innovation between a China and the rest of the developed world and potential reasons for this?
Glad you enjoyed!
For 1) this is something we plan to highlight in Part 2. China leads the world in research on many critical technologies: https://www.aspi.org.au/report/critical-technology-tracker (their metric is high impact research)
For 2a) There are metrics like you mention however they often don't capture the strengths of public research - foundational knowledge that enables other commercial technologies to be built.
For 2b) I haven't seen any patent/research spend measures I trust - one of the criticisms of China's patent output (which is high) is that it does gauge quality.
You might enjoy pt2. of our Chartpack on China's economic destiny where we take a brief look at their research vs the US: https://www.exponentialview.co/p/chartpack-china-economy-2
Thanks, Nathan