Growth in Research & Development (R&D) in China is even faster than its economy. The R&D contribution to China’s GDP was 1.5% in 2008; two years later it nearly touched 2%. Given the outstanding GDP’s performance over the last years, investments in R&D have been very impressive.
Today, China accounts for 12% of world spending in the field, more, in absolute terms, than Japan and EU. In the US, 30% of science and engineering PhD graduates were born in China. Still hunting the US’s leadership – mainly the fruitful marriage between universities and industry – China reached some other records. Every year, some 2 million new graduates are turned out by the Universities geared toward innovation and scientific progress.
Full of symbolism was the Huawei Technologies’s record. The IT giant was the “world biggest inventor” (more patents registered) in 2008 and 2nd the following year. One conclusion is easily reached: the backbone of the industry is rapidly changing. The endless manufacturing process is now coupled with a more sophisticated knowledge economy. Beijing is happy for this long encouraged marriage. Its initial efforts aimed at financing R&D are now being replaced by private and state owned companies which account for 60% of the total spending. Furthermore, multinational companies’ (MNCs’) old model of manufacturing in China and selling at home seems now inadequate. Consumption is on the rise in emerging markets and it is weakening in industrialized countries. In addition, high selling products are no longer the same in both markets. New goods and services must be tailored according to local tastes and habits.
If Asia and China want to spend more and differently, innovation is the crucial challenge. Research, its prerequisite, can be transferred too. MNC’s have already established 1.500 R&D centers in China. They may invest on new and ambitious talents. The Paris-based OECD has recently launched a competition among international students to detect their competency in math and science. Shanghai’s high schools outperformed students from 65 countries. The result is a continuation of an Asian leadership, already reached by Japanese, South-koreans, Singaporians geniuses. The next challenge will be to free a creative talent, mainly in China. It will take time and resources, because the process involves different fields from the economy and the education. It will need stimulus more than control, fantasy rather than discipline.