Helped in huge part by their loose attitude towards intellectual property restrictions. Look at how much innovation occurred in FDM 3D printers after the patents expired. Before then, printers cost $25k and they shipped less than 1k per year. Ten years after the patents expired and they were available for as low as $250 and shipping in the many thousands of units per months.
Just imaging the compounding effects on growth if all of your high cost items dropped in price by 100x, with way more options available to choose from and cheap parts available with two day shipping. Think of how much easier it is to learn mechanical engineering and build prototypes thanks to 3D printers. And then consider that when 3D printers were first invented both IBM and Stratasys had patents - meaning the ideas were understood by multiple parties and would likely have been created without patent protection.
IP restrictions slow down innovation like molasses.
I have a sneaking suspicion that the people who profit from IP law are of course going to tell you that it's the greatest thing since sliced bread and that we couldn't have solved COVID without it. For the sake of discussion I'll concede the point that IP laws are a necessary part of innovation but that brings up a major question -- how much IP law is optimal?
Do we have an optimal amount of IP? Who decides? Why them? What metric do they use? How do we disentangle the conflict of interests between the people telling us we need more IP and the fact that they make gobs of money off of it?
Slight caveat, the ITIF is an industry lobbying group for enterprise companies like IBM, Cisco, Google Cloud, Microsoft, Intel, and Amazon. I am a big supporter for investing in R&D as a nation (I totally stan Vannevar Bush), but this is just one of the various anti-trust submarine pieces that are starting to coming out.
>The last decade was marked by dramatic evolution in China’s innovation capabilities and strategies, much of which was driven by the transition of Chinese Communist Party (CCP) and state leadership from Hu Jintao and Xi Jinping and the introduction of China’s latest major innovation policy framework: Made in China 2025 (MIC).
Reads like a lot of things from Chinese state media these days, which seem obliged to always lead with kudos to Xi.
But to the point, of course China has tons of smart people, and has the raw capacity to innovate all day long. What really stands in the way is the extreme risk aversion that exists at all levels. Management is is extremely risk averse and so is the party. No “innovation policy framework” will change that.
>No “innovation policy framework” will change that.
It absolutely does, nor is CCP risk averse when it comes to science. MIC2025 and precursor Indigenous Innovation Policies, are largely succeeding. Human capita only one part of equation, also need competent state to setup long term infra/academic/s&t/r&d base and with vision to retain and exploit talent, i.e. India got IITs to generate talent but lack rest, hence top Indian talent continues being brain drained for opportunities in west vs PRC talent increasingly "seaturtle" back to PRC, and now many simply never leave. CCP pushing indigenous science capability last 30 years with project 211/985, excellence league, double first class etc was instrumental in PRC breaking innovation index now. Giving credit to Hu/Xi/leadership is state media wank, but state plays huge role in strategy and execution. It's still only 2.5% of GDP (but growing fast) which puts PRC close to 500B by PPP, after US 600B and way ahead of third place JP 170B or IN 160B.
If they can double our capacity, they only need to be half as capable. They could scale to 10x our capacity, only be 15% as capable, and still innovate more than we could hope to match.
Basically. Spam educated STEM talent production to OECD combined, first gen makes shit (all the meme of bad PRC papers), but some wheat from chaff at that scale enables PRC to be 80% competitive, refine a bit by 2nd gen, now PRC reach peer competitiveness, refine a little more and we have PRC leading innovation index. Will take another gen or two to translate through industries (already happening in some sectors). TLDR is chabuduo at PRC scale works when right edge of bell curve is enough to compete with rest of world. Spamming innovation at scale works when it delivers enough gems. Chabuduo is not accident - it's strategy.
I think you'd be surprised by how much hustle culture China has. The notion of them being simply copyists is outdated. It's the same mistake that the US made with Japan in the 1970s.
The Chinese one-party system is a lot more authoritarian than the West's, but it doesn't micromanage everything the way people imagine it does. People at the bottom are entirely capable of innovating. It's true that for a long time they just innovated new, cheaper, better ways to copy, but that was a matter of economic position, not political organization.
They've been improving that for decades. And while there's still a lot of very dull people produced in Chinese universities, there are a lot of people there overall, and the top 0.01% is a huge number.
I don't know if this is a good or bad thing for the world. I've always felt weird that the US should have such a corner on the market for novel design. Despite our back-patting we're not better than everybody else.
I wonder if the top-down mindset can provide some benefits for innovation.
* State backing-- whether it's guaranteed markets or simply R&D on a government budget-- means innovators have a disruption-free space for work. There's less worry about "we've got to ship some garbage before we run out of runway."
* The goals of government research initiatives are also likely to be more broadly palatable than "the shareholders will love this!" Nobody in the Central Committee is saying "we really want to be the world leader in adding annoying subscription features to stuff." Even the grand boogeymen-- surveilance and social credit-- come from a place of trying to improve public safety and quality of life.
The free market is good at making marketable products. Is it good at basic research that's not directly monetizable, or producing things we need but don't want?
Generally speaking, innovation comes from unexpected discoveries, interdisciplinary thinking and massive amounts of failure.
It's like tree roots randomly sampling a surface until they find a crack to grow into. It's easy to trace innovative pathways with top down direction once they're already obvious, but the initial discovery is a random process enhanced by intellectual, economic, and social freedom to operate
Source: I'm doing a postdoc on deep tech innovation policy.
Helped in huge part by their loose attitude towards intellectual property restrictions. Look at how much innovation occurred in FDM 3D printers after the patents expired. Before then, printers cost $25k and they shipped less than 1k per year. Ten years after the patents expired and they were available for as low as $250 and shipping in the many thousands of units per months.
Just imaging the compounding effects on growth if all of your high cost items dropped in price by 100x, with way more options available to choose from and cheap parts available with two day shipping. Think of how much easier it is to learn mechanical engineering and build prototypes thanks to 3D printers. And then consider that when 3D printers were first invented both IBM and Stratasys had patents - meaning the ideas were understood by multiple parties and would likely have been created without patent protection.
IP restrictions slow down innovation like molasses.
See, you say that, but the ITIF has publicly affirmed IP restrictions were critical to solving COVID and other innovations - https://itif.org/publications/2021/04/29/ten-ways-ip-has-ena...
Don't take the ITIF's (or other think tanks) arguments at face value.
I have a sneaking suspicion that the people who profit from IP law are of course going to tell you that it's the greatest thing since sliced bread and that we couldn't have solved COVID without it. For the sake of discussion I'll concede the point that IP laws are a necessary part of innovation but that brings up a major question -- how much IP law is optimal?
Do we have an optimal amount of IP? Who decides? Why them? What metric do they use? How do we disentangle the conflict of interests between the people telling us we need more IP and the fact that they make gobs of money off of it?
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Oh I’m certainly not. But I do think it’s plausible China has overtaken the USA on innovation capacity.
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Slight caveat, the ITIF is an industry lobbying group for enterprise companies like IBM, Cisco, Google Cloud, Microsoft, Intel, and Amazon. I am a big supporter for investing in R&D as a nation (I totally stan Vannevar Bush), but this is just one of the various anti-trust submarine pieces that are starting to coming out.
This clip from "The Thick of It" sums up think tanks on the Hill and Westminister - https://m.youtube.com/watch?v=lADB9Qu53CY
* various submarine pieces OPPOSING antitrust in the tech industry
>The last decade was marked by dramatic evolution in China’s innovation capabilities and strategies, much of which was driven by the transition of Chinese Communist Party (CCP) and state leadership from Hu Jintao and Xi Jinping and the introduction of China’s latest major innovation policy framework: Made in China 2025 (MIC).
Reads like a lot of things from Chinese state media these days, which seem obliged to always lead with kudos to Xi.
But to the point, of course China has tons of smart people, and has the raw capacity to innovate all day long. What really stands in the way is the extreme risk aversion that exists at all levels. Management is is extremely risk averse and so is the party. No “innovation policy framework” will change that.
>No “innovation policy framework” will change that.
It absolutely does, nor is CCP risk averse when it comes to science. MIC2025 and precursor Indigenous Innovation Policies, are largely succeeding. Human capita only one part of equation, also need competent state to setup long term infra/academic/s&t/r&d base and with vision to retain and exploit talent, i.e. India got IITs to generate talent but lack rest, hence top Indian talent continues being brain drained for opportunities in west vs PRC talent increasingly "seaturtle" back to PRC, and now many simply never leave. CCP pushing indigenous science capability last 30 years with project 211/985, excellence league, double first class etc was instrumental in PRC breaking innovation index now. Giving credit to Hu/Xi/leadership is state media wank, but state plays huge role in strategy and execution. It's still only 2.5% of GDP (but growing fast) which puts PRC close to 500B by PPP, after US 600B and way ahead of third place JP 170B or IN 160B.
Another thing that stands in the way is a culture that punishes wrong answers.
You either know the answer for certain or you keep your mouth shut.
Capacity != Capability
If they can double our capacity, they only need to be half as capable. They could scale to 10x our capacity, only be 15% as capable, and still innovate more than we could hope to match.
Basically. Spam educated STEM talent production to OECD combined, first gen makes shit (all the meme of bad PRC papers), but some wheat from chaff at that scale enables PRC to be 80% competitive, refine a bit by 2nd gen, now PRC reach peer competitiveness, refine a little more and we have PRC leading innovation index. Will take another gen or two to translate through industries (already happening in some sectors). TLDR is chabuduo at PRC scale works when right edge of bell curve is enough to compete with rest of world. Spamming innovation at scale works when it delivers enough gems. Chabuduo is not accident - it's strategy.
It's a lot easier to copy something than to build something new.
Without the freedom to fail and the freedom to challenge the existing socio-economic status quo, China will have trouble out innovating the USA.
The best and most valuable innovations generate creative destruction. Change in China is top down not innovation driven.
I think you'd be surprised by how much hustle culture China has. The notion of them being simply copyists is outdated. It's the same mistake that the US made with Japan in the 1970s.
The Chinese one-party system is a lot more authoritarian than the West's, but it doesn't micromanage everything the way people imagine it does. People at the bottom are entirely capable of innovating. It's true that for a long time they just innovated new, cheaper, better ways to copy, but that was a matter of economic position, not political organization.
They've been improving that for decades. And while there's still a lot of very dull people produced in Chinese universities, there are a lot of people there overall, and the top 0.01% is a huge number.
I don't know if this is a good or bad thing for the world. I've always felt weird that the US should have such a corner on the market for novel design. Despite our back-patting we're not better than everybody else.
I wonder if the top-down mindset can provide some benefits for innovation.
* State backing-- whether it's guaranteed markets or simply R&D on a government budget-- means innovators have a disruption-free space for work. There's less worry about "we've got to ship some garbage before we run out of runway."
* The goals of government research initiatives are also likely to be more broadly palatable than "the shareholders will love this!" Nobody in the Central Committee is saying "we really want to be the world leader in adding annoying subscription features to stuff." Even the grand boogeymen-- surveilance and social credit-- come from a place of trying to improve public safety and quality of life.
The free market is good at making marketable products. Is it good at basic research that's not directly monetizable, or producing things we need but don't want?
Generally speaking, innovation comes from unexpected discoveries, interdisciplinary thinking and massive amounts of failure.
It's like tree roots randomly sampling a surface until they find a crack to grow into. It's easy to trace innovative pathways with top down direction once they're already obvious, but the initial discovery is a random process enhanced by intellectual, economic, and social freedom to operate Source: I'm doing a postdoc on deep tech innovation policy.
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