Delta Scan: The Future of Science and Technology, 2005-2055: Growth of Chinese Science and Technology

Key Pages

Category:
Science and Technology

Domain:
Geography of Science

Keywords:
Knowledge, communication & learning - China, globalisation, brain drain, liberalisation

Outlook:
China could emerge as a scientific and technical superpower in the next 20 years if it improves its management of intellectual property and finance, further liberalises its markets, and relaxes political constraints.

Summary Analysis:
Since it embarked on economic liberalisation in the 1980s, China has emerged as a global manufacturing powerhouse. It appears likely that unless there is a domestic crisis or a global economic depression, China's enterprises will move up the value chain in the next decades, from cheap manufacturing to design and systems integration. It is also likely that the country will continue to grow its infrastructure for scientific research and engineering and will continue to attract foreign capital. In the next two decades, it will probably also follow today's emerging scientific powers (such as Singapore and Korea) in competing for world-class, often Western-trained, scientific and engineering talent.

These factors will continue to enable China's scientific and technological advancement:

Educational reform and growth -- China has long been a leading exporter of graduate students. In the last 20 years, domestic training programs in science and technology have grown dramatically. PhD production increased fiftyfold between 1986 and 1999, from less than 200 to more than 7,000 degrees granted annually. By some estimates, China now graduates more engineers than the rest of the world combined. Part of this growth has been driven by an expansion of the Chinese higher education system, a trend that seems certain to continue. More ambitious universities are likely to recruit heavily from abroad.
Foreign investment -- In the 1990s, China began to attract substantial foreign investment in R&D. Today, about 400 of the Fortune 500 have a presence in China, and there are several hundred foreign-funded R&D centres. Many of the early centres were little more than testing facilities established to fulfill state requirements regarding foreign investment; the newer centers, in contrast, are not just engaged in product localisation or supporting manufacturing but are moving into high-quality design and research aimed at global markets.
Innovation structures -- Like the US and EU countries, China has developed new institutions designed to promote the transfer of academic knowledge into the marketplace and to incubate new companies. Beijing's Zhongguancun Science Park is host to thousands of small high-tech companies, some 1,800 of which were started by Chinese expatriates lured home in the late 1990s and 2000s.
State policy -- Both the national Chinese government and individual states have developed programs for attracting foreign investment, incubating new businesses, and promoting innovation. Government funding for basic science doubled between 1995 and 2000, and China aims to increase funding for R&D from 1% to 1.5% of GDP (a figure comparable to the US immediately after World War II). The government's priorities have also shifted: some of its inefficient state institutes, many of them located in the nation's interior, have been closed, while funding for the Chinese space program (which has great symbolic and military value) has been generous.

Western commentators identify significant limits to the growth of Chinese science and technology, however. Intellectual property and patent regimes are still murky, and this is likely to inspire reluctance among Western companies. Concerns about military transfer of new technology, and the degree to which China is pursuing its own technical standards in order to challenge Western companies, may also become more pronounced. If growth in China slows, that is likely to dampen enthusiasm for conducting R&D to localise products. There is also the long-term question of whether China can develop a world-class scientific establishment in the absence of political reform, as authoritarian states have traditionally not welcomed the scepticism and cosmopolitanism of scientific establishments.

Implications:

Expansion of the demand for high-level scientific and engineering talent in China
Potential development of a new model for technological innovation that does not rely on strong intellectual property, patents, and copyright regimes

Early Indicators:

Establishment by a number of British and American universities of campuses in China
Funding by newly wealthy Chinese entrepreneurs of new universities -- some 400 now on the drawing boards, according to informal estimates
Substantial growth in China's scientific and innovative capabilities, as measured by citation studies and patent filings
Establishment by Microsoft of its newest Chinese research facility in Beijing, on a level equal to that of its centers in Seattle and Cambridge

What to Watch:

Puzzling disparities in scienometric indicators like patent filings, citation studies, and R&D expenditures indicate that China is developing a model of R&D significantly different from the West's.
China's space program indicates the nation's ability to develop and manage large-scale technical projects.

Parallels/Precedents:

Competition among American universities in the late 19th century for noted European scientists or European-trained Americans

Enablers/drivers:

Expansion of the Chinese higher education system
Economic liberalisation and growth
Reform of and better financial support for universities, state-owned enterprises, and financial and legal structures

Leaders:

Zhongguancun Science Park
Chinese Academy of Sciences [link]
Smith Institute [link]
Chatham House [link]
British Association for Chinese studies [link]

Figures:

Sources:

Sami Mahroum, "Highly Skilled Globetrotters: The International Migration of Human Capital," OECD Workshop on Science and Technology Labour Markets (1999). [link]
Henry Rowen, "Some Key Factors in China's Remarkable Rise in the Technologies of Information," written testimony before the U.S. China Economic and Security Review Commission, April 21-22, 2005. [link]
AnnaLee Saxenian, "Brain Circulation: How High-Skill Immigration Makes Everyone Better Off," Brookings Review 20 (Winter 2002), 28-31.
Kathleen Walsh, Foreign High-Tech R&D in China: Risks, Rewards, and Implications for U.S.-China Relations. Washington: Henry L. Stimson Center, 2003. [link]
Cox A. and Sepetys K. "Intellectual Property Rights Protection in China: Litigation and Economic Damages." Global Intellectual Property Asset Management Report. January 6 2006 [link]
Harvey B. "The Chinese Space Programme: From Conception to Manned Spaceflight." Springer Praxis Books.
"China to Build 30 New Science and Technology Parks." SciDev.Net. April 19 2006 [link]
"Research Funding: China Gets Big on Big Science." Science. March 2006 [link]
"China and Britain: the Potential Impact of China's Economic Development." Smith Institute. 2005 [link]

At A Glance:
When:
11–20 years

Where:
Global

How Fast:
Years

Likelihood:
Medium-High

Impact:
Medium-Low

Controversy:
Low

Related Outlooks:

About this outlook: An outlook is an internally consistent, plausible view of the future based on the best expertise available. It is not a prediction of the future. The AT-A-GLANCE ratings suggest the scope, scale, and uncertainty associated with this outlook. Each outlook is also a working document, with contributors adding comments and edits to improve the forecast over time. Please see the revision history for earlier versions.

Category:	Science and Technology
Domain:	Geography of Science
Keywords:	Knowledge, communication & learning - China, globalisation, brain drain, liberalisation
Outlook:	China could emerge as a scientific and technical superpower in the next 20 years if it improves its management of intellectual property and finance, further liberalises its markets, and relaxes political constraints.
Summary Analysis:	Since it embarked on economic liberalisation in the 1980s, China has emerged as a global manufacturing powerhouse. It appears likely that unless there is a domestic crisis or a global economic depression, China's enterprises will move up the value chain in the next decades, from cheap manufacturing to design and systems integration. It is also likely that the country will continue to grow its infrastructure for scientific research and engineering and will continue to attract foreign capital. In the next two decades, it will probably also follow today's emerging scientific powers (such as Singapore and Korea) in competing for world-class, often Western-trained, scientific and engineering talent. These factors will continue to enable China's scientific and technological advancement: Educational reform and growth -- China has long been a leading exporter of graduate students. In the last 20 years, domestic training programs in science and technology have grown dramatically. PhD production increased fiftyfold between 1986 and 1999, from less than 200 to more than 7,000 degrees granted annually. By some estimates, China now graduates more engineers than the rest of the world combined. Part of this growth has been driven by an expansion of the Chinese higher education system, a trend that seems certain to continue. More ambitious universities are likely to recruit heavily from abroad. Foreign investment -- In the 1990s, China began to attract substantial foreign investment in R&D. Today, about 400 of the Fortune 500 have a presence in China, and there are several hundred foreign-funded R&D centres. Many of the early centres were little more than testing facilities established to fulfill state requirements regarding foreign investment; the newer centers, in contrast, are not just engaged in product localisation or supporting manufacturing but are moving into high-quality design and research aimed at global markets. Innovation structures -- Like the US and EU countries, China has developed new institutions designed to promote the transfer of academic knowledge into the marketplace and to incubate new companies. Beijing's Zhongguancun Science Park is host to thousands of small high-tech companies, some 1,800 of which were started by Chinese expatriates lured home in the late 1990s and 2000s. State policy -- Both the national Chinese government and individual states have developed programs for attracting foreign investment, incubating new businesses, and promoting innovation. Government funding for basic science doubled between 1995 and 2000, and China aims to increase funding for R&D from 1% to 1.5% of GDP (a figure comparable to the US immediately after World War II). The government's priorities have also shifted: some of its inefficient state institutes, many of them located in the nation's interior, have been closed, while funding for the Chinese space program (which has great symbolic and military value) has been generous. Western commentators identify significant limits to the growth of Chinese science and technology, however. Intellectual property and patent regimes are still murky, and this is likely to inspire reluctance among Western companies. Concerns about military transfer of new technology, and the degree to which China is pursuing its own technical standards in order to challenge Western companies, may also become more pronounced. If growth in China slows, that is likely to dampen enthusiasm for conducting R&D to localise products. There is also the long-term question of whether China can develop a world-class scientific establishment in the absence of political reform, as authoritarian states have traditionally not welcomed the scepticism and cosmopolitanism of scientific establishments.

	Implications:	Expansion of the demand for high-level scientific and engineering talent in China Potential development of a new model for technological innovation that does not rely on strong intellectual property, patents, and copyright regimes
	Early Indicators:	Establishment by a number of British and American universities of campuses in China Funding by newly wealthy Chinese entrepreneurs of new universities -- some 400 now on the drawing boards, according to informal estimates Substantial growth in China's scientific and innovative capabilities, as measured by citation studies and patent filings Establishment by Microsoft of its newest Chinese research facility in Beijing, on a level equal to that of its centers in Seattle and Cambridge
	What to Watch:	Puzzling disparities in scienometric indicators like patent filings, citation studies, and R&D expenditures indicate that China is developing a model of R&D significantly different from the West's. China's space program indicates the nation's ability to develop and manage large-scale technical projects.
	Parallels/Precedents:	Competition among American universities in the late 19th century for noted European scientists or European-trained Americans
	Enablers/drivers:	Expansion of the Chinese higher education system Economic liberalisation and growth Reform of and better financial support for universities, state-owned enterprises, and financial and legal structures
	Leaders:	Zhongguancun Science Park Chinese Academy of Sciences [link] Smith Institute [link] Chatham House [link] British Association for Chinese studies [link]
	Figures:
	Sources:	Sami Mahroum, "Highly Skilled Globetrotters: The International Migration of Human Capital," OECD Workshop on Science and Technology Labour Markets (1999). [link] Henry Rowen, "Some Key Factors in China's Remarkable Rise in the Technologies of Information," written testimony before the U.S. China Economic and Security Review Commission, April 21-22, 2005. [link] AnnaLee Saxenian, "Brain Circulation: How High-Skill Immigration Makes Everyone Better Off," Brookings Review 20 (Winter 2002), 28-31. Kathleen Walsh, Foreign High-Tech R&D in China: Risks, Rewards, and Implications for U.S.-China Relations. Washington: Henry L. Stimson Center, 2003. [link] Cox A. and Sepetys K. "Intellectual Property Rights Protection in China: Litigation and Economic Damages." Global Intellectual Property Asset Management Report. January 6 2006 [link] Harvey B. "The Chinese Space Programme: From Conception to Manned Spaceflight." Springer Praxis Books. "China to Build 30 New Science and Technology Parks." SciDev.Net. April 19 2006 [link] "Research Funding: China Gets Big on Big Science." Science. March 2006 [link] "China and Britain: the Potential Impact of China's Economic Development." Smith Institute. 2005 [link]

At A Glance:	When:	11–20 years
	Where:	Global
	How Fast:	Years
	Likelihood:	Medium-High
	Impact:	Medium-Low
	Controversy:	Low