China Stakes its Claim as U.S. Rival in Innovation

Jeremy Hsu

Date: 11 November 2010 Time: 02:44 AM ET

China's breathless pursuit of science, technology and innovation can leave other countries looking a bit flat-footed. The world's second-largest economy became the second most prolific publisher of articles in international science journals a year ago, and it is expected to pass Japan and the United States in the number of patent filings by 2011.

That doesn't necessarily mean the United States or other countries are slowing down their efforts to boost science and technology. Instead, China seems to have hit its stride after sprinting over the last few decades to catch up — and much evidence shows it is still trying to translate the sheer quantity of published papers and patent filings into quality products and services.

China will get strong results by continuing to train scientists and engineers, improving its universities and supporting private research and development, said Diana Hicks, a Georgia Tech professor who is chairwoman of its School of Public Policy. But, she added, it is premature for the United States to panic about its own competitiveness.

"The Chinese are starting from a low base, so that's why you see high growth rates," Hicks said. "We still have a more mature, sophisticated system here. But we're looking over our shoulder at them."

Published science papers, patent filings and R&D spending serve as rough benchmarks for countries to measure themselves against one another. But they do not represent direct measures of innovation, which is defined as a good or service that makes an impact on an economic sector, or a process that improves how businesses operate.

"Innovation is a very complex phenomenon that doesn't boil down to a single number," said Mark Boroush, a senior analyst at the National Science Foundation.

Publishing frenzy

Crude, indirect measures of progress in Chinese innovation look impressive at first glance. For instance, China produced more than 120,000 research articles last year, compared with just 20,000 in 1998, said Jonathan Adams, director of research evaluation at Thomson Reuters, in an article written for New Scientist. Only the United States, with 350,000, produced more articles last year.

But Hicks said the dramatic increase could be influenced by the fact that more Chinese journals are now being tracked by databases such as Thomson Reuters' Web of Science and Elsevier's SCOPUS. She added that Chinese journals may publish research articles at much faster rates than Western journals.

At home, China still struggles with the problem of quantity over quality. About a third of the estimated 5,000 Chinese-language journals exist only for graduate students and professors to publish for career advancement, according to Nature News. It quoted one Chinese cardiologist who described 85 to 90 percent of Chinese journals as "information pollution."

Concerns also exist regarding the originality of material. A Chinese journal director reported in September that plagiarized material represented a "staggering" 31 percent of all papers submitted to the Journal of Zhejiang University-Science — a key academic journal under China's National Natural Science Foundation.

Still, China's ability to conduct world-class research as measured by international standards has clearly grown. A 2009 study by the journal Nature China found that the number of Chinese articles published in prestigious international journals tripled over the last decade. Those journals included Cell, the Lancet, Nature, the New England Journal of Medicine, and Science.

Patented in China

Meanwhile, Chinese inventors and entrepreneurs have not been idle in applying for patents to protect their ideas. China is now set to become the world leader by 2011 in the number of filings to its patent office, according to a Thomson Reuters report titled "Patented in China: The Present and Future State of Innovation in China," which came out last month.

That would put China ahead of the current patent-filing leader, Japan, and runner-up, the United States. Such patent activity reflects a boost in China's domestic inventions as well as the growing number of foreigners applying for Chinese patents, the report stated.

The number of Chinese patents granted has risen slowly over the course of 2000-06 to 40 percent of patent filings. At the same time, U.S. patent-granting rates have steadily decreased to somewhere above 50 percent.

Again, such numbers disguise a more complex story. Each country also has its own pace for granting patents, a pace that depends upon the number of patent examiners and the size of the office's budget, Hicks said. Furthermore, each country may issue different types of patents that make it harder or easier for inventors to file.

"Japan has more patents than the U.S., and we haven't freaked out about that," Hicks pointed out. "They issue smaller patents on more-trivial inventions, so we don't really worry about their volume being higher than our volume."

China's idea machine

China similarly issues "utility patents," which are meant to be "relatively inexpensive, quick, easy to obtain, and suited to inventions having a short commercial life," according to the report.

Those patents can be approved quickly without the examination required for so-called invention patents, which makes it easier for more Chinese to file patents. The U.S. Patent and Trademark Office has no equivalent patent (despite confusingly calling its invention patents "utility patents").

A better measure of China's innovation-related activities may come from tracking the rise in U.S. patents granted to Chinese inventors. That number has steadily grown, from 119 patents in 2000 to 1,655 in 2009 — a possible sign that the Chinese have become more active in getting higher-quality patents.

Tricky and deceptive comparisons aside, patents may still serve as a useful indicator, said Boroush. His work at the National Science Foundation focuses on collecting and measuring the statistics of innovation.

"We're measuring patents because it's systematically available data, and because it clearly has something to do with innovation," Boroush explained. "It's an important input even though not all patents become significant innovations down the line."

Spending to the top

Even if the measures of China’s progress come with caveats, one cannot deny the rapid growth of China's research-and-development spending on science and technology. Its R&D spending in comparison to its gross domestic product (a country's economic output) exploded from just 0.6 percent in 1996 to 1.5 percent in 2007, according to figures tracked by the Organization for Economic Cooperation and Development.

The United States' R&D spending compared to GDP in 2007 was a respectable 2.7 percent, which ranked behind smaller developed economics such as Japan and South Korea. National R&D spending in the U.S. has seen a largely uninterrupted increase since 1953, as reported in the NSF's Science and Engineering Indicators 2010.

The U.S. also still remains unbeaten in terms of spending R&D dollars — its $373 billion made up more than a third of the world's total R&D spending in 2007. China spent the equivalent of $102 billion, which put it in third place behind the U.S. and Japan.

But that could change if China continues accelerating its R&D spending. Its growth in such spending averaged just above 19 percent in inflation-adjusted dollars over the past decade, compared with 3.3 percent growth in the United States.

"We certainly can't get complacent about our own R&D effort, because the whole world is chasing us and they'll overtake us if we don't get our head in the game," Hicks said.

Better measures of innovation

No easy answers may exist for figuring out which country has the competitive edge for innovation. But governments and private corporations desperately want to find out, and they have recently begun figuring out ways to measure it.

European countries already track innovation based on indicators recommended by the Organization for Economic Cooperation and Development. Now the National Science Foundation has begun to do the same; it released preliminary statistics from its 2008 Business R&D and Innovation Survey in an online brief last month.

That survey asked 1.5 million for-profit companies in the United States whether they had introduced a good or service that was new or that significantly improved their marketplace, or a process that improved operations.

The vast majority of nonmanufacturing companies (92 percent) reported very low levels of innovation, a finding that Boroush attributed in part to the idea that the hotel, retail and entertainment industries may not need much innovation to be economically successful.

By contrast, innovation stood out among manufacturing companies such as in the information sector, where 30 percent of companies reported product innovations and 20 percent reported process innovations.

But even these statistics don't gauge the market impact of a particular innovation, Boroush cautioned. Getting that data will require measuring the marketplace effect over time — a tougher set of questions for businesses to answer.

Until the surveys get better data, analysts will continue to eye the publication and patent count — as well as R&D dollars — to try to figure out who is ahead in the 21st-century race for innovation.

"They're all part of the big picture," Boroush said of those indicators, "and all have to be firing in the right ways to produce the economic results we want."