China is narrowing the innovation gap with the US, but the loss of talented graduates to richer countries, red tape at its universities and other issues are seen as challenging its effort to become a global innovation leader, China Daily's Michael Barris reports from New York.

It was an unforgettable moment for China - and for space exploration.

Shortly after 8 am EST last Dec 14, Chang'e-3, a robotic moon mission by the China National Space Administration, left its orbit around the Earth's only natural satellite, and began to descend toward the lunar surface. Within 12 minutes, the spacecraft became the first vehicle since the Soviet Union's Luna 24 probe 37 years ago to land softly on the moon.

"This is a great day for lunar science," said Clive Neal of the University of Notre Dame's Department of Civil and Environmental Engineering and Earth Sciences. In a congratulatory message, China's cabinet, the State Council, and the Central Military Commission hailed the mission as a "milestone" in the development of China's space program.

The exploration phase of the mission, conducted through Chang'e-3's instrument-laden Yutu rover, was not only expected to gather new data about the dusty lunar soil that would unlock the moon's and the Earth's geological mysteries in the months ahead.

The testing of new technology in the project was seen as possibly paving the way for a future Chinese manned moon mission. Zhang Yuhua, deputy general director and deputy general designer of the probe system, hinted as much when he said: "Chinese aerospace researchers are working on setting up a lunar base," according to the People's Daily newspaper.

The moon landing. The soaring number of technology patents held by China's Huawei Technologies Co, the Shenzhen-based networking and telecommunications equipment supplier and Lenovo Group Ltd, the Beijing-headquartered computer, smartphone and software maker. The surging number of Chinese PhDs in technical fields graduating each year. The success of China's Internet companies such as Alibaba Group, the electronic commerce concern, and Tencent Holdings Ltd, mobile and online investments company.

Reaping benefits

Those accomplishments speak to China's growing prowess as a nation of innovation. As its leadership puts a high priority on, in the words of Cornell University innovation expert Stuart Hart, developing its ability to "blend science and creativity to generate new ideas and new artifacts and merge the inventions with human needs", the move is reaping dividends.

Already known for giving the world gunpowder, the compass, the waterwheel, paper money, long-distance banking, the civil service and merit promotion, China is making strides to narrow the gap with the US, the long-time global innovation powerhouse that has brought the world such breakthroughs as the assembly line, the transistor and the Internet.

As China, its economy growing steadily, pours money into improving its education system and R&D capability while US R&D spending grows only modestly in moribund economic times, the question invariably arises: Can China someday overtake the US as a global innovation leader?

The question is important as China's leadership shifts the economy away from the manufacturing-driven, export-led model that has produced much of the country's recent economic prosperity. In its place, the government is embracing a paradigm that emphasizes domestic consumption and services. In the years ahead, innovation will be the main way China achieves the increased production of goods and services it needs to get wealthier and maintain robust economic health, experts said.

"History long-term and recent - particularly recent - tells us, don't underestimate China," Jim Cook, a Michigan-based technology management consultant who lived and worked in China from 1999 to 2003, told China Daily in an interview. "As you think about innovation, don't make a mistake of thinking they will 'never' anything."

The factors that affect an innovation's adoption by a broad swath of a society - such as Thomas Edison's invention of a practical long-lasting light bulb and the system for distributing electricity to millions - are complex. Politics, personalities, money, commercial demand, the dominance of an existing design, religious traditions and luck all play a part in an invention's widespread acceptance by users, according to Scott Berkun's 2007 book, The Myths of Innovation.

A report last month by the National Science Board, the policy-making body of the US government's National Science Foundation, suggested that China's proficiency in game-changing science and technology is increasing as the US' predominance in the field is eroding. During the last decade, the report said, China performed nearly as much of the world's high-tech manufacturing as the US. Signaling the end of US, Japan and Europe's monopolization of global R&D, several Asian nations - particularly China and South Korea - conducted a larger share of global R&D than the US, according to the report.

The US's share of global R&D since 2001 dropped to 30 percent from 37 percent, the report said. China's share grew to 15 percent from 4 percent. Europe's share of global R&D fell to 22 percent from 26 percent . China also tripled its pool of researchers from 1995 to 2008, according to the report.

In a Feb 6 conference call to launch the report, NSB Chairman Dan Arvizu was quoted in Foreign Affairs, a magazine published by the Council on Foreign Relations, the nonprofit, nonpartisan US foreign policy think tank, as saying "it's possible China will overtake the US" in high-tech productivity "in the near future".

Emerging economies "understand the role science and innovation play in the global marketplace and in economic competitiveness and have increasingly placed a priority on building their capacity in science and technology", Arvizu said in a comment included in the report. Illustrating China's innovation commitment, the government's 12th Five-Year Plan, announced in March 2011, has set a goal of 3.3 patents per 10,000 people.

China's edge

The NSB report also cited China's edge over the US in awarding higher education diplomas. The number of Chinese graduating from a university swelled to nearly 7 million by 2013 from fewer than 1 million in 1999, according to the report. China also held an advantage over the US in the production of "first university degrees", or programs that open the gate into advanced research programs or jobs, the report said.

Suggesting that China's edge in graduates is not merely due to its four times larger population, the report said 31 percent of undergraduates in China leave with degrees in engineering, compared with just 5 percent of US undergrads.

These statistics notwithstanding, numerous issues are seen as challenging China in its quest to become a global innovation leader.

First, the US still stands atop the world in terms of high-tech industry as a percentage of gross domestic product - 40 percent. And overall R&D funding in the US has returned to 2008 levels, when adjusted for inflation, despite plunging during the recent recession, according to the NSB report.

China also needs to manage institutional problems that threaten to disrupt the fostering of an innovation culture, according to a Harvard Business Review blog.

A major concern is keeping talented graduates from leaving the country to study or conduct research in other more affluent countries. Despite a plethora of incentives aimed at keeping China's brightest minds in the country - including offers of research funding, lab space, a housing allowance, employment for spouses and admission to top schools for children - the number of Chinese studying abroad rose to about 400,000 in 2013 from fewer than 120,000 in 2003. By 2012, only 1.09 million of 2.64 million Chinese studying overseas since 1978 - 41 percent - had returned, according to the Center for China & Globalization, a Beijing think tank that advises the government on recruitment of talent.

"The longer these talented individuals stay overseas, the less willing they are to come back," center director Wang Yaohui told China Daily in an October interview. "Many of them fear that they may have to start all over again when they return."

A September report by a publishing affiliate of the Chinese Academy of Social Sciences said Chinese people with a PhD who have lived overseas for three to five years seldom choose to return.

Bureaucratic red tape in China's universities also is seen as deterring innovation.

Huang Dekuan, Anhui University's president for a decade before becoming its Party secretary three years ago, has said some local governments have turned universities into bureaucratic institutions to the extent that "headcount, selection and appointment of university officials and even the decommissioning of laboratory equipment all need approval from local governments," according to the South China Morning Post. "But how much do they know what sort of personnel our schools need?"

About 2,000 colleges and universities in China are locally run, with regional government financing. Some 70 higher learning institutions, generally in cities designated as intellectual centers, receive funding from Beijing. Big cities such as Beijing and Shanghai have been designated as national intellectual centers, housing the top universities and the students deemed most deserving of higher education.

Huang was quoted as saying that bureaucracy and financial constraints have compromised the quality of teaching in China and could derail the nation in its goal to provide quality education. Tight money also hampers efforts to improve the quality of teaching and research and acquire sophisticated laboratory equipment, he was quoted as saying.

Innovation in China also is hurt by intellectual dishonesty in universities. In a 2010 article the New York Times reported that some scholars complain about the dishonest practices that permeate society, including students who cheat on college entrance exams and scholars who promote fake or unoriginal research.

In one notorious case of fakery, Tang Jun, the millionaire former head of Microsoft China, was found to have falsely claimed to have received a doctorate from the California Institute of Technology.

Scholars in China and abroad have said a lack of integrity among researchers could harm collaboration between Chinese scholars and their international counterparts.

Cornell University's Hart, professor emeritus of management and organizations with the Samuel Curtis Johnson Graduate School of Management in Ithaca, New York, said cheating tends to be more prevalent "in places where there is tremendous pressure to perform", especially on standardized tests.

"When there is extreme competition for a limited number of slots in prestigious schools, it ups the likelihood that those kind of things can happen," he said.

Rote learning

The Chinese education system's emphasis on rote learning also raises questions about the nation's ability to produce innovative minds.

Lee Kai-Fu, one of China's best-known venture capitalists and former president of Google China, was quoted in the Harvard Business Review blog as saying: "The Chinese education system makes people hardworking, teaches people strong fundamentals, and makes them very good at rote learning. It doesn't make them creative, original thinkers."

NSB Vice-Chairman Kelvin K. Droegemeier said "China is able to produce a lot of very smart people, but they are challenged substantially" when it comes to turning discoveries into useful new product, the hallmark of innovation, Foreign Affairs magazine reported.

Hart said China's culture "clearly has to shift away from simply memorization and rote learning" to become an innovation leader. "It's all about dot-connecting and creative thinking and being able to pattern-recognize," Hart said. "Those are entirely different skills than memorization and rote learning."

Although great standardized test takers often gain admission to the most prestigious schools, "there isn't necessarily a strong correlation between strong standardized test takers and innovation and creativity", Hart said.

To some, however, these issues lack the power to stop China from reaching the pinnacle as an innovation nation.

Erik Gordon, a professor with the Ross School of Business and School of Law at the University of Michigan, said "China and any other country that emphasizes innovation can overtake the US".

There is "no natural right or advantage with respect to innovation," Gordon said. "The US doesn't own a deep secret to innovation. Any country that wants to challenge the US on innovation can and should challenge the US. Everyone, including the US, would be better for it."

Gordon downplayed the cost to China of losing top college graduates to other countries - noting that while "losing them doesn't help, especially in technology and medicine", college graduates "aren't the only source of innovation".

Red-tape maze

China, he said, should view its red-tape maze as an opportunity. "The most innovative American universities are the ones that leave room within their bureaucracies for innovators," Gordon said, adding that most universities in most countries are "mazes of red tape and nearly impenetrable bureaucracy".

More important, he said, is the reality that "much of what universities think is innovative is a decade behind what industry actually practices".

As for the claim that China's emphasis on rote learning undermines creativity, Gordon said rote learning "isn't the problem". The issue is "the lack of companion emphasis on creativity and innovation", he said. "Undisciplined, untrained people occasionally but rarely are the most innovative."

Gordon said that while the money and other resources China invests in R&D are important, where the resources go is equally important.

The key is to have "significant resources available to the innovative researchers who want to challenge the status quo of understanding and who ignore the supposed boundaries of what is acceptable to the mainstream research elite who control resources such as money, research journals and academic appointments", the professor said.

Hart said one big edge the US holds over China is that the infrastructure is set up to encourage innovative interplay between academia and industry.

"It's really part of organization culture - and culture is one of the hardest things to intentionally create quickly," Hart said. "Culture has to evolve over time. Can that happen in China? Absolutely. But I wouldn't say this is an overnight thing."

Although he said he thinks China could eventually surpass the US as an innovator, "I wouldn't see that happening any time soon," he added.

R&D money

China's pouring money into R&D will not necessarily result in a stream of major innovations, Hart said. "You can't buy an innovation culture. Just throwing money at it isn't going to get it done. You can spend a lot of money on training people to be really good test takers and efficiently execute things in a laboratory and conduct studies quickly but that isn't necessarily going to produce an innovation culture."

Funding, he said, can "create the potential for creativity to emerge. But you have to have the right culture, the right kind of training and development, and mentors who model that behavior".

The US has an edge over China in that innovation "has been going on for some period of time so there are probably more role models in terms of scientists and researchers and senior faculty who are built that way - and it takes time to get there."

China's hidden strength may be its big population. If it were to start tapping the wisdom of the crowd through social media, it would have access to a huge potential pool of ideas.

"It's just that many more brains," Hart said. "It's a little bit like money in that the more raw potential you have in the form of actual human beings and their brains and the money that's behind it to support that sort of activity, then the likelihood (of innovation) goes up. You connect all that through social media and then you've just increased the likelihood in a substantial way."

Whether China ultimately surpasses the US as an international innovation leader may come down to its determination to follow through on a goal, according to Jim Cook, something it did in the moon landing.

"When Chinese decide to do something," Cook said, "they actually do it."

(Source: China Daily)

2014-04-11