China’s Innovation Problem
Chinese worker in Trinco
Yesterday I wrote something in the Leader about how societies can collapse, including Sri Lanka if it follows the Chinese model, or China itself. “In his study of how complex societies collapse, anthropologist Joseph Tainter found a pattern. Civilizations from the Mayans to the Romans tended to follow a curve of development, a curve that often turns into a cliff. Essentially, they find a good resource and begin to grow. In order to manage this growth, they become more complex. As this resource runs out, that complexity becomes a burden and the society collapses.”
The article then concludes: “If people are given opportunities, however, their innovation can give the country a second wind. There is no more land, the colonials took much of the natural resources, but there are always more people. Indeed, this is what much development along the Chinese model tends to forget. For all of China’s vaunted growth, they are essentially still catching up to the West and haven’t done anything spectacularly new.
In the same way, all the projects were are promoting here have already been done in the West. We get good returns on them now, but those returns will inevitably decline. At some point we will run into the same problems that Western civilizations are running into now, and we may not have a base of innovative people to come up with new solutions. That type of game-changing thinking takes investment in education and free markets and, crucially, an investment in freedom to think and work and live. That freedom is, essentially, the resource that all of this technology we copy came from, and it’s something that Sri Lankans have in increasingly short supply.”
Then, just today I read this in the NYTimes
To continue growing rapidly, China needs to make the next transition, from sweatshop economy to innovation economy. This transition is the one that has often proved difficult elsewhere. Once a country has turned itself into an export factory, it cannot keep growing by repeating the exercise. It can’t move a worker from an inefficient farm to a modern factory more than once. It cannot even retain its industrial might forever. As a country industrializes, workers will demand their share of the bounty, as has started happening in China, and some factories will start moving to poorer countries. Eventually, a rising economy needs to take two crucial steps: manufacture goods that aren’t just cheaper than the competition, but better; and create a thriving domestic market, so that its own consumers can pick up the slack when exports inevitably slow. These steps go hand in hand. Big consumer markets become laboratories where companies know that innovations will be tested and the successful ones richly rewarded. Those products can then expand into countries with less mature consumer markets. Look at the telephone, the personal computer and the iPhone and iPad, all of which were designed in the United States and are now sold around the world.
Today’s China cannot claim any such achievement, a fact that weighs on Chinese policymakers. They worry about the country’s ability to innovate and, in particular, about the quality of its education system.
which is what I’m saying.
Today on the 
Janith has updated 
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Sri Lankan domestics never say anything, they just stop coming. My maid just stopped coming and when I finally pressed her she said I needed to get a washing machine. I was hoping to ride this one out, but I’ve run out of underwear and I have no choice. I finally caved and bought a washing machine, from 
I tell you what. Kill all the chinese people in China, and replace them with white Australians and New Zealanders (the official term for a white New Zealander is ‘pakeha’. Not kidding). They’ll run the country the same way the chinese do. But nobody will say crap like this.
Although I consider myself to be liberal, I must say the concept of personal freedom is a relatively new one, and that innovation is hardly a function of that.
Wiki says otherwise
http://en.wikipedia.org/wiki/List_of_countries_by_patents
although, chinese & indian grad students i have worked with have never impressed me.
I thought innovation was a result of necessity, a means of survival when pushed to a corner, like being faced with shrinking resources or profits. Shouldn’t complexity then encourage innovation?
‘Necessity’ is necessary but not sufficient. The literature on innovation gives the economic arguments for condition for innovation. (See Raphael Kaplinsky, .g.). Nature of the demand, factors of production and firm trajectory are three. Factors of production include the knowledge-base of a firm and the nature of the knowledge.
lol. that looks like econ gobbledygook 101
@Nadula
I don’t think shammi speaks greek. Neither do I.
Interesting. In terms of inventions, some years ago Japan’s MITI (subjectively, of course) identified what it considered to be the most revoluntionary inventions in history and had Great Briton at over 50%, followed by the US on 25% or so. However, much of that it related to the Industrial Revolution and electronics (television etc) in the late 1800′s and early 1900′s. There’s an article about it somewhere, but I can’t find it now. However, the US is now far ahead of any other country in terms of patents filed, which I suppose is a reasonable measure of innovation (http://www.suite101.com/content/most-inventive-countries-a8271).
There’s another, almost uniquely American factor when considering innovation. Jonathan Ive is the lead designer at Apple and, along with Steve Jobs’ brilliance, has created some of the most innovative and uber-design products in the past generation. Yet he’s a Brit, living and working in the States. I’ve heard him talk about the issue before and he has always been pretty consistent. He points out that the freedom to make mistakes, to create for the sake of creating and to be allowed to be radical in design and purpose is a trait very acceptable in American culture, fostered in the education system and in wider business. Americans have been willing to invest in experimental technology in a way perhaps only matched by the Victorians.
It’s a highly complex issue, but from what I have seen and heard of young, brilliant graduates from China, creative freedom is not fostered particularly effectively in their education system.
In any system where conformity is required and dissent is punished, perhaps it is difficult to develop a culture of freedom to innovate, to invest and to be radical? The slow progress of Intellectual Property protection outside of Western countries is also fundamental and a huge issue, especially for skilled Indian artists and coders right now.
Furthermore, how is the wealth created by innovation allocated in countries like China? If I were a young, talented inventor, I’d want to extract maximum personal benefit from the products I create.
@Carasek
Would you look at those stats again, especially patent filings per million population and patent filings per billion $ GDP.
I’d say Japan and South Korea are doing pretty well.
I think most American news stories on China fall broadly into three categories: (1) Beware of the Evil Dragon — basically, “yes they’re good, but all they want to do is conquer Asia and make the Americans their economic slaves, so don’t trust ‘em” (2) Doom & Gloom — “the Chinese are super-efficient, superhuman, super smart superbeings and America is fucked” (3) Sour Grapes — “things are not as good as they look, Chinese are all much shorter than Americans and have small penises, so one day soon they’re gonna collapse”.
What he said.
@Lefroy
Indeed they are and I thought about that when posting. It seems they are significant anomalies, given the other numbers in the table.
I’d posit the explanation that those two particular nations’ specialism in high tech innovation must be large part of the patents. Such specialisation has been a very key part of public policy in both those states for a few generations and success breeds success, plus there has been a huge reduction in the number of independent companies that exist in the consumer electronics and car markets over the past decade or two (these are both primary industries in Japan and S Korea), thereby concentrating new innovation geographically. Impressive stats whatever the reason.
What I had to say about the opportunity advantages in the US almost certainly also applies to those two countries, especially in recent times. Obviously innovation in these two countries has both thrived in a (US?) capitalist model of smart invention and significant investment, whereas the US hasn’t worked out how to re-industrialise and diverts huge expenditure on foreign expeditions.
China’s current strategy in the car and airline industried is to buy foreign technology, and then to build on it. You can see that in the car industry (Volvo etc) and in the airline industry (part of the recent agreement to buy Airbus is that Airbus agreed to share some tech, whereas Boeing would not). The South Koreans did that very successfully, their cars considered crappy (but cheap) only a decade ago, now close to Japanese standards.
However, in total numbers the US is still dominant by a huge margin. Nearly twice as many patents as even the second placed Japan. Despite China’s huge economic might, it doesn’t even figure on the per capita or per GDP table top 15.
@Blacker
I always wondered why you kind of look like a Chinese.
[...] Today China and India are both growing, but it’s not like they’re creating anything especially new. They’re simply reaching western standards. Once they get there, they’ll have to push beyond, otherwise their economic engines will stutter and stall. [...]