Silicon China: high-tech innovation on the rise
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Silicon China: high-tech innovation on the rise

America should worry about losing its technological leadership writes Asia Sentinel’s Clyde Prestowitz

America prides itself on technological and innovation leadership and subconsciously assumes it will always be number one because such leadership is uniquely American.

Well, maybe America should guess again, according to a survey by KPMG Consulting. The global questionnaire of 668 top executives worldwide concluded that China will surpass Silicon Valley in high-tech innovation by 2016. That means that in three years we’ll be saying goodbye Google, goodbye Facebook, goodbye Apple and hello Huawei, hello Baidu, and hello names you’ve never heard of.

I’m always a bit skeptical of these kinds of surveys, particularly because there is always a kind of favor the underdog sentiment that expresses itself in responses to the questionnaire. America and Silicon Valley have been on top so long and have bragged about being on top so long that there is a longing in much of the world to see them knocked down a peg or two. Still, I don’t think Silicon Valley is going to blow away in the next three years.

Nevertheless, the weakness of the United States is that it constantly underestimates the efforts and capabilities of its competitors. This means there will be surprises because China is making tremendous efforts and has tremendous talents. Over the past 20y years, its investment in R&D has doubled from .73 percent of GDP to 1.77 percent and the plan is to reach the European level of 2.5 percent by 2020. Just in the past decade, the volume of Chinese investment in R&D has grown by more than 600 percent, according to Professor of Technology and Innovation Management at IMD in Lausanne, Switzerland, and Professor Marc Laperrouza of the Evian Group at IMD, HEC, the University of Lausanne, and the Swiss Federal Institute of Technology. As a result, they say, China will soon go from being the world’s biggest factory to being its biggest laboratory.

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