China Strikes Right Competitive Chord

In many countries, rich and poor, competitiveness is the new national anthem. And political leaders often sing a similar tune. For example, when President Bush and China’s President Hu Jintao each speak about a vision for their country’s future competitiveness, they strike similar rhetorical notes – innovation, education, investment and emerging technologies.

However, Washington’s rendition is missing a chord: the role of global collaboration. Not so in Beijing. In both policy and practice, global collaboration is central to China’s blueprint for national competitiveness. Other governments should pay attention.

China’s State Council, its most powerful executive body, has just published a national strategy for building an innovative, high-tech society. Its 15-year plan has four pillars: investment in science and technology, a focus on strategic sectors, inflow of talent, and, significantly, resource sharing among universities and industry and government.

Beijing is also pushing Chinese companies and universities to increase their international partnerships. Today, over 750 foreign-funded research and development centers operate in China. Beijing is promoting investment mechanisms that marry Chinese and international venture financing for its start-up technology firms. Chinese collaboration is even bridging historical enmities. An industry consortium, backed by the governments of China, Japan and South Korea, is jointly developing a version of Linux software to rival Microsoft Windows. China’s role in global networks also extends to more nefarious activities such as the international trade in pirated software, music and films.

The forces driving globalization—cheap technology, the Internet, wireless phones and Bluetooth—are producing new avenues of innovation. The Human Genome Project, Wikipedia, the International Campaign to Ban Landmines (a Nobel prize winner), eBay and al-Qa’ida all share something in common. Each represents a network of global collaboration.

The impact of these communities of scientists, activists, software engineers and consumers worldwide highlight the flaw in America’s policy formula for competitiveness. Tax credits and visas are not enough. Innovation has gone global. An “us against them” attitude is destined to fail. Open innovation is the way forward.

US companies have figured it out, building manufacturing facilities, global supply chains, call centers and software development centers around the world. Nothing stops at the water’s edge anymore. All pipelines – whether for oil or innovation – are global.

The convergence of world-class infrastructure, an educated work force, venture capital and cutting-edge science in geographic proximity has always been a winning combination. Silicon Valley remains a private sector powerhouse. Its leaders, however, recognize that the innovation game is evolving. As the CEO of Sun Microsystems recently put it, the crown jewels of competitiveness—knowledge, ideas and processes—must be shared to create tomorrow’s economic opportunities. The scions of Silicon Valley see that collaboration is the key to competing tomorrow. Open innovation is best way to leverage R&D, talent and technology abroad.

Governments everywhere should pay attention. They need to invest boldly in global innovation chains where people, data and devices are shared, not simply imported. They need to ensure that their scientists, laboratories, agencies and universities are intimately linked to them. Predicting the next Big Thing may be impossible. However, it is a good bet that a global network of innovators will create it.