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Europe must evangelise for a cosmopolitan, open and outward-facing model of innovation… The Atlas of Ideas Europe and Asia in the new geography of science and innovation Charles Leadbeater Simon O’Connor James Wilsdon Kirsten Bound Molly Webb

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The Atlas of Ideas Europe and Asia in the new geography of science and innovation Charles Leadbeater Simon O’Connor James Wilsdon Kirsten Bound Molly Webb

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Contents

The authors

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Acknowledgements

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1.

What is at stake?

11

2.

China: the next science superpower?

20

3.

India: the uneven innovator

33

4.

South Korea: mass innovation comes of age

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Eight forces in the new geography of science

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Next people, next places

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Where Europe stands

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Notes

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The authors

Charles Leadbeater is a senior visiting fellow at the National Endowment for Science, Technology and the Arts, a visiting fellow at the Said Business School, Oxford University, a long-standing Demos senior associate and a co-founder of Participle, the public service innovation agency. A former industrial editor of the Financial Times, he drafted the British government’s 1998 white paper Building the Knowledge Driven Economy, and has advised governments and organisations around the world on innovation strategy. His books include Britain: The California of Europe (Demos, 1998); Living on Thin Air: The new economy (Penguin, 1999); Surfing the Long Wave: Knowledge entrepreneurs in the UK (Demos, 2001); The Pro-Am Revolution (Demos, 2005); and Ten Habits of Mass Innovation (Nesta, 2006). His latest book, We-Think: The power of mass creativity, is available in draft online at www.charlesleadbeater.net and will be published in 2007 by Profile. Simon O’Connor works at The Centre, the Brussels-based thinkdo tank, where he focuses on issues related to competitiveness and innovation. He is also editor of the bimonthly magazine on European affairs, E!Sharp. In 2004, he worked closely with Will Hutton and the former Dutch Prime Minister Wim Kok on the drafting of Facing the Challenge, the report of the High Level Group on the Lisbon Strategy. Simon has spent over eight years working on EU public policy in Brussels and has written and lectured widely on EU affairs. Demos

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James Wilsdon is head of science and innovation at Demos and a senior research fellow at the Institute for Advanced Studies at Lancaster University. His research interests include science and innovation policy, emerging technologies, sustainability and globalisation. He regularly advises government agencies, companies and NGOs on these topics. Together with Charles Leadbeater, he is the coordinator of The Atlas of Ideas project. His recent publications include China: The next science superpower? (with J Keeley, Demos, 2007); Governing at the Nanoscale (with M Kearnes and P Macnaghten, Demos, 2006); The Public Value of Science (with B Wynne and J Stilgoe, Demos, 2005); and See-through Science (with R Willis, Demos, 2004). Kirsten Bound is a senior researcher at Demos, where she has worked since 2004. Her work focuses on democracy and innovation and developing Demos’s international research relationships. Kirsten led the India stream of The Atlas of Ideas research and authored the report India: The uneven innovator (Demos, 2007). Her other publications include Community Participation: Who benefits? (Joseph Rowntree Foundation, 2006). She is currently leading research into talent attraction and qualities of place in Scotland. Molly Webb is a researcher at Demos. Her work focuses on science, technology, innovation and the environment and her publications include South Korea: Mass innovation comes of age (Demos, 2007). Prior to joining Demos, Molly worked on e-commerce and content websites in Japan and the US, most recently as director of interactive production at Oxygen Media in New York. Molly recently worked with Headshift to create the new Demos website, which won the Prospect Magazine Best Think Tank Website of the Year award in 2006.

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Acknowledgements

This pamphlet forms part of The Atlas of Ideas project. For copies of our other reports, visit www.atlasofideas.org We are very grateful to our three funders – AstraZeneca, BT and Qualcomm – for enabling us to extend our analysis to a European level. Particular thanks to Frances Charlesworth, Isabella de Michelis di Slonghello and Robin Pauley for their input and support. Thanks also to the funding consortium for our initial UK-focused research on which this report draws. We are indebted to the policy-makers, scientists, research and development managers and other experts whom we interviewed over the course of the project, in particular Patrick Brenier, Pierrick FillonAshida, Bjarne Kirsebom, Robert Krengel, Vincent McGovern, Antonia Mochan, Callum Searle, Ben Turner, Upton van der Vliet, Philippe Vialatte and Michaela Wright. Finally at Demos, thanks to Kirsten Bound and Molly Webb; and at The Centre, thanks to Martin Porter, Paul Adamson and Jutta Buyse. Charles Leadbeater Simon O’Connor James Wilsdon Kirsten Bound Molly Webb May 2007 Demos

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1. What is at stake?

On the outskirts of Shanghai, 1000 researchers are working in a state of the art Intel research facility that was built from scratch in just five months. By 2012 there could be 10,000 spread over two sites. In Beijing, engineers at Ericsson’s research centre are developing routers for mobile phone systems at a third of the cost of those in Europe. On the edge of Delhi, among the call centres and new shopping malls, Ranbaxy, the Indian drug company, has opened a research and development (R&D) centre with 2000 scientists, modelled on a Bristol Myers Squibb facility in the US. In Daejon in South Korea, geneticists equipped with the latest gene sequencing machines are generating world-class stomach cancer research after just three years. The knowledge parks and high-tech zones springing up across Asia are demolishing the barriers to entry into scientific innovation. Flowing through the airports that serve Asia’s innovation hotspots are the people who make this shiny hardware work: research scientists, corporate innovation managers and serial entrepreneurs, flooding back mainly from the US and carrying with them western management methods, money, contacts and ambition. They are attracted by a potent cocktail: fast-growing markets; plentiful state funding for research; and middle-class lifestyles in increasingly cosmopolitan cities that they can call home. Demos

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The reverse migration of these nomadic innovators heralds a new phase of globalisation, one in which ideas and innovation will flow from many more sources. In the last 30 years, global supply chains have transformed how we make products. Our pensions, savings and bank accounts now depend on seamlessly connected global markets. Something similar is about to happen to the way we develop and apply ideas. Innovation will emerge from global networks that link research, testing, development and application. We used to expect new ideas to come from the universities and research laboratories of major companies in the US and Europe. Technology flowed from this innovative core to the technologically dependent periphery. No more. The core and periphery are being scrambled up. Places that were on the margins of innovation ten years ago – Bangalore (Bengalooru) and Pune in India, Daejon in Korea, Shanghai and Shenzen in China – are now essential stopping-off points in the continuous flow of people, ideas and technologies around the world. The rise of China, India and South Korea will remake the innovation landscape. The centre of gravity for science-based innovation is starting to shift from West to East. This report explains what is happening and how the European Union should respond. Europe’s innovation challenge The past decade has seen European policy-makers grow increasingly anxious about the continent’s ability to compete globally in research, science and innovation. With notable exceptions such as Sweden and Finland, Europe often struggles to convert its R&D into innovative and marketable products. There has been no shortage of headline-grabbing initiatives and expert reports addressing this issue. At the height of the dotcom boom in March 2000, EU leaders launched the Lisbon strategy. At its heart was a bold commitment to make Europe ‘the most competitive and dynamic knowledge-based economy in the world’ by 2010. Two years later in Barcelona, a similarly ambitious target was set for R&D expenditure: by 2010, the aim was to reach an EU-wide average of 12

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3 per cent of GDP, of which two-thirds was to come from the private sector. But by the time the high-level group chaired by former Dutch Prime Minister Wim Kok presented its report on the future of the Lisbon strategy in November 2004, it was clear that these targets would not be met. The Kok report – Facing the Challenge – said that ‘one of the most disappointing aspects of the Lisbon strategy to date is that the importance of R&D remains so little understood and that so little progress has been made’.1 Kok highlighted an array of factors holding back Europe’s performance in research and innovation. These included administrative obstacles to the mobility of researchers within the EU; an inability on the part of the EU to attract and retain world-class researchers; insufficient funding for universities and uncompetitive remuneration packages for researchers; and the absence of a low-cost legal framework for the protection of intellectual property rights. In January 2006, it was the turn of another former prime minister, Finland’s Esko Aho, to present his own set of remedies aimed at creating an innovative Europe. The central recommendation of the Aho report was for a ‘pact for research and innovation’, which would require a ‘huge act of will and commitment from political, business and social leaders’.2 Aho echoed many of the points made by Kok a year earlier, calling for Europe to provide an innovation-friendly environment for its businesses, with action on regulation, standards, public procurement, intellectual property and broader support for a culture that ‘celebrates innovation’. He urged greater investment in ‘excellent science, industrial R&D and the science–industry nexus’ and issued a blunt warning: ‘Europe and its citizens should realise that their way of life is under threat but also that the path to prosperity through research and innovation is open if large-scale action is taken now by their leaders before it is too late.’ Nonetheless, the steady rise of R&D and innovation as political priorities at the EU level has had a galvanising effect on the performance of individual European countries. While there was Demos

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probably never any real chance of hitting the 3 per cent target for R&D spending by 2010, its existence has encouraged member states to move faster towards that goal. If all EU countries enact the commitments they have made and hit the targets they have individually set themselves, spending should reach an EU-wide average of 2.6 per cent by 2010. This would still represent real progress – and as the Aho report points out, such an input target should be seen as only one indicator of an innovative Europe, not as an end in itself. The European Commission recognises the importance of this agenda, and has embarked on various initiatives to promote a more innovative Europe.3 The latest round of the ever-tortuous EU budget negotiations in 2005 saw the Commission successfully argue for a substantial increase in real terms in the funding available for EUsupported R&D. The Seventh Framework Programme for Research and Technological Development (FP7), which was launched at the beginning of 2007 and will run through to 2013, has a budget of €53.2 billion, an increase of around 50 per cent on FP6. One of the criticisms often levelled at the Framework Programmes is that the application procedures are excessively bureaucratic, to the extent that some world-class research teams are deterred from applying. To overcome this, the applications process under FP7 is designed to be more user-friendly. Another development – and one of the key recommendations of the Kok report – is the creation of a European Research Council (ERC), which will provide over €1 billion per annum in grants for frontier research in fields ranging from social sciences to engineering. Crucially, the ERC will not require applicants to form multi-country consortia, as is the case with most FP7 funding. Grants will be awarded purely on the basis of excellence, as judged by panels of independent, high-level scientists and scholars. Both the scientific and business communities have high hopes that the ERC will boost Europe’s performance at the top end of the scientific league tables. Between 1980 and 2003, Europe produced 68 Nobel prize winners in medicine, physics and chemistry, against 154 in the US. 14

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What is at stake?

But a separate initiative put forward by the Commission – for the establishment of a European Institute of Technology (EIT) – has failed to win the consensus support enjoyed by the ERC. Unlike the ERC, which had been under discussion for several years, the idea of an EIT emerged suddenly and was inserted at a late stage into the Commission’s 2005 spring report on the progress of the Lisbon strategy. Many member states, once they overcame their surprise, questioned the value of such an initiative, arguing that Europe would do better to increase support for existing centres of research excellence. The Commission’s response was that the EIT would create synergies rather than duplicating work already under way in existing institutions. Following these discussions, the proposal has now evolved into a means of promoting cooperation between existing institutions, with a focus on research-based innovation. The EIT will have a light central structure and will act as a focal point for a series of decentralised ‘Knowledge and Innovation Communities’, joint ventures to be established by universities, research organisations and businesses. The Commission hopes the EIT will be up and running by 2009, although only around 10 per cent of the €2.4 billion, which the Commission estimates will be needed for the EIT over its first five years, has so far been secured. Barriers persist One priority for further reform is the protection of intellectual property. There is widespread agreement that the procedures for applying for Europe-wide patent protection are cumbersome, costly and act as a deterrent to innovation. Yet attempts to address this situation have consistently foundered on opposition from member states. The Community Patent proposal has been languishing in the long grass since 2004, beaten down by national governments’ refusal to compromise on narrow national concerns, most notably related to language, in favour of the wider European interest. More recently, the European Commission proposed that the EU sign up to the European Patent Office’s European Patent Litigation Demos

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Agreement (EPLA), intended to cut the costs of patent litigation and revocation costs for patent holders and third parties. But the EPLA proposal also became deadlocked in the Council of Ministers. In April 2007 the Commission put forward a compromise proposal to attempt to bridge the differences between member states. Yet positions remain polarised and, given past experience, it is hard to be optimistic that a solution will be found soon. The European institutions continue to snatch at particular aspects of intellectual property rights, such as patent ambushes or standardisation, without tackling the key issues that would drive efficiency and simplicity in patent filings and enforcement. Further challenges confront Europe’s university sector. The picture varies considerably across the continent, with countries like Austria, Denmark, the Netherlands and the UK having significantly improved the way their universities are run. But in general, European universities remain underfunded, lacking in autonomy and with insufficient links to the business community. The EU has around 2000 universities, compared with over 3000 in the US. But whereas most of Europe’s higher education institutions are engaged in postgraduate research, in the US only about 100 are. (And the US’s National Science Fund, America’s main public source of research funding, channels most of its cash into only around 35 of those 100.) Politically explosive issues such as selection and tuition fees have held back many governments from taking the radical action needed to inject some dynamism into their universities. Yet the sector is in desperate need of consolidation and strategic focus. Otherwise, Europe will struggle to create world-class centres of excellence that can compete with the innovation clusters that have grown up around Stanford or MIT in the US, and which are now emerging in the new hubs of Asia. Learning to look east At the start of this decade, when Europe’s leaders signed up to the Lisbon strategy, innovation performance was benchmarked primarily against the US. Today, China and India have become common points 16

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What is at stake?

of reference alongside the US. And there is a growing awareness among policy-makers in Brussels of South Korea, Singapore and other Asian nations as important centres for innovation. Commission officials describe science and technology as a ‘key pillar’ of EU–China cooperation. The Commission has had a science and technology counsellor at its delegation in Beijing for over a decade and an EU–China Science and Technology Agreement was signed in 1998 and renewed in 2004. China was also one of the largest non-EU participants in FP6, with 376 participating organisations involved in 198 projects. Around €32 million of European funding went to these Chinese partners, enabling their participation in projects worth €844 million. Interest in India as a research partner is a more recent phenomenon in Brussels, but is rapidly increasing. At times, the EU can find it difficult to provide appropriate policy responses to India’s emergence as an economic powerhouse, given the fact that it remains a developing country with significant levels of poverty. But officials in the Commission overseeing science and technology cooperation do now recognise India’s huge potential. There has been a science and technology counsellor at the Commission delegation in Delhi only since 2005, but a Science and Technology Agreement was signed in 2001 aimed at facilitating joint research. India was also a significant participant in FP6, with 133 organisations involved in 90 projects; €11 million of European funding went to these Indian partners, enabling their participation in projects worth €239 million. South Korea of course occupies quite a different position in the hierarchy of the emerging economies. Whereas both China and India are more than double the size of the entire EU, and far poorer in terms of GDP per capita, South Korea is roughly the size of Italy with GDP per capita roughly equivalent to Slovenia. Its R&D spending is approaching 3 per cent of GDP and it competes head-on with European companies in sectors ranging from automotive to consumer electronics. South Korea is looked on with admiration in Brussels for its levels of broadband penetration and the IT literacy of its population. EU-level science and technology cooperation with Demos

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South Korea is at a less advanced stage than with China and India, but a Science and Technology Agreement was signed in November 2006. Under FP6, 19 Korean organisations participated in 17 projects. Potential partners from Asia should find it even easier to access EU funding under FP7. There will no longer be a separate pool of money available for international cooperation; instead, organisations in socalled ‘third countries’ will be able to join together with EU partners to apply for funding under each of the programme’s ten thematic priorities. At the same time, specific priorities for third countries are to be integrated into many calls for proposals. The way ahead Yet however much enthusiasm there may be in Brussels for increased cooperation with Asia, the risk remains that the rise of innovation from China, India and South Korea will feed a climate of anxiety in many European countries. Europe must avoid making two big mistakes. First, it must wake up, to what is unfolding in countries like China, India and Korea, and not respond with too little too late. Second, it must work to prevent a defensive retreat into techno-nationalism – whether in Asia or in Europe – and instead evangelise for a cosmopolitan, open and outward-facing model of innovation. The rise of Asia will inevitably challenge Europe’s position in knowledge-based industries. More knowledge jobs will go offshore. Research and development will become more international. In the long run, China, India and South Korea will start to earn more from exploiting their own intellectual property, and Europe’s share of income from intellectual property may decline. However, it would be extremely short-sighted to view these developments purely as a competitive threat. Europe can prosper in the new geography of science and innovation, but only if it chooses not to isolate itself from global flows of knowledge. The European Union needs to act decisively to make itself central to global innovation networks, based on a longerterm view of what is at stake both for it and the rest of the world. 18

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Innovation in Asia may accelerate development and raise incomes, creating a larger market for British services. The resources India and China are devoting to innovation are large, but still feeble when set against the challenges of poverty they face. In India, 390 million people live on less than US$1 a day,4 often without clean water and electricity. Some of China’s poorest regions have a standard of living on a par with the poorer parts of Africa. These countries need innovation to deliver tangible social improvements. The more successful they are, the more opportunities there will be for the EU to trade with them. Innovators in Europe may also be more productive if they can collaborate with Asian partners with complementary skills, for example in the application and development of technology. European hubs of scientific innovation like Cambridge, Munich and Helsinki should attract inflows of talent from around the world, just as the City of London has with financial services. The European Commission has consistently argued that cooperation coordinated at the EU level can offer benefits to partners that bilateral agreements with individual member states could not. Already, China, India and South Korea are participating in two of the EU’s flagship research projects: the ITER thermonuclear reactor under development in Cadarache in the south of France and the Galileo satellite navigation system. The attraction of such projects for third countries is that they treat them with respect as equal partners and can provide access to far broader networks of research. They have also succeeded because they enabled the EU to speak with one voice and negotiate more effectively with new partners. Such models of successful cooperation need to be developed and applied elsewhere, particularly in tackling the global challenges that confront us all: from low-carbon innovation to vaccines against pandemics. More brains, working on more ideas, in more places around the world has to be good news for innovation.

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2. China: the next science superpower? 5

By the end of 2020 . . . China will achieve more science and technological breakthroughs of great world influence, qualifying it to join the ranks of the world’s most innovative countries. President Hu Jintao, 9 Jan 2006 China in 2007 is the world’s largest technocracy: a country ruled by scientists and engineers who believe in the power of new technologies to deliver social and economic progress. The Chinese science and innovation system has its weaknesses but one thing it excels at is the rapid mobilisation of resources. Right now, the country is at an early stage in the most ambitious programme of research investment since John F Kennedy embarked on the moon race. The headline numbers are enough to make anyone pause for thought. Since 1999, China’s spending on R&D has increased by more than 20 per cent each year. In 2005, it reached 1.3 per cent of gross domestic product (GDP), up from 0.7 per cent in 1998. In December 2006, the Organisation for Economic Co-operation and Development (OECD) surprised policy-makers by announcing that China had moved ahead of Japan for the first time, to become the world’s second highest R&D investor after the US.6 Janez Potocnik, the EU’s research commissioner, admits: ‘The Chinese trend is extremely clear . . . they will catch us up in 2009 or 2010.’7 It is when you roll these numbers forward that the sheer scale of 20

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what is under way becomes more apparent. In January 2006, China’s Science and Technology Congress met for three days to approve a new Medium to Long Term Science and Technology Development Programme. This identifies priorities for the next 15 years and confirms the aim of boosting investment to 2 per cent of GDP by 2010 and 2.5 per cent by 2020. Reaching these targets will require investment in 2020 to be six times what it is today (see table 1).8 The plan says that advances in science and technology should eventually account for 60 per cent of economic growth, and that China should aim to be among the top five countries worldwide in terms of patents and scientific citations. In his keynote speech to the Congress on 9 January 2006, President Hu Jintao called on China to become an ‘innovation-oriented society’.9 China’s long boom, in which growth has averaged 9 per cent a year for over a decade, has been propelled by a combination of low-cost manufacturing, imported technology and substantial flows of foreign investment. Such is the success of this model that China now produces 70 per cent of the world’s photocopiers, 55 per cent of its DVD players and 25 per cent of its washing machines. But the new 15-year plan starts by acknowledging that while manufacturing remains crucial, it will not be sufficient to carry China through the next stage in its development. The plan mentions a series of ‘acute challenges’, including the availability of energy and resources, levels of environmental pollution, and weak capabilities for innovation. These can be overcome only through a new focus on ‘independent innovation’ (zizhu chuangxin). Certain slogans and concepts have defined different periods in China’s history: ‘serve the people’ in Mao’s time; ‘reform and opening’ and ‘the four modernisations’ during the Deng Xiaoping period; ‘the three represents’ of Jiang Zemin; and under Hu Jintao phrases like ‘the peaceful rise’ and ‘the harmonious society’. Zizhu chuangxin looks set to become another period-defining mantra. Policy-makers have decided that independent innovation is what China needs. It is no longer enough to import or copy high-end technologies from the US and Europe. If China is to find the place it wants in the world Demos

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economy it needs to create its own technologies that can support future waves of economic growth. Ready for take-off? Drafting the new plan was a serious project in itself. Two thousand scientists spent three years debating the proposals, with the final decisions referred to a committee chaired by Prime Minister Wen Jiabao. The plan was presented as the most significant for several decades, and implicit parallels were drawn with its 1956 forerunner, which created many of China’s research institutions and gave rise to its first atom bomb and satellite. Like many such documents, the plan is long on aspiration and short on specifics.10 But to what extent does it represent a landmark in Chinese policy? Seasoned observers stress the need to place the plan in the context of a wider set of reforms to the Chinese innovation system that are now reaching a tipping point. Denis Simon, a US expert with 25 years’ experience of these debates, says: It is clear to me that China has entered an important watershed period in terms of the operation and performance of its science and technology system. . . . [It] is positioned for an important take-off – the question is no longer if this will happen but rather when.11 Simon offers four reasons for this upbeat assessment. First, Chinese policy is becoming more sophisticated and outward-facing, as the government starts to think in terms of an integrated national system of innovation. Second, traditional forms of state planning and control are being replaced by a lighter touch, enabling frameworks, including new funding structures and performance measures, and a far greater role for enterprise and private sector R&D. Third, there has been a marked improvement in the university sector, both in terms of the quantity of graduates, with around 350,000 IT graduates in 2004, and also the quality of degrees and PhDs. Finally, China has stepped up the internationalisation of its research system, with extensive networks of collaboration across Europe, Japan and the US, and a 22

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more visible presence in international journals and conferences. Yet despite progress across all these fronts, it would be wrong to underplay the challenges that China must confront as it seeks to become an ‘innovation-oriented society’. Richard P Suttmeier, professor of political science at the University of Oregon, is another veteran of these debates. Borrowing from Dickens, he suggests that Chinese science is experiencing ‘the best of times and the worst of times’.12 Contrary to notions of a technological juggernaut, the Chinese system suffers from several structural vulnerabilities, the greatest of which is what he terms the ‘technology trap’. So much of China’s growth and development has relied on imported technologies that only 0.03 per cent of Chinese firms own the intellectual property rights of the core technologies they use. This acts as a serious constraint on profitability. Universities and research institutes are becoming more productive, but Chinese enterprises still lag behind in terms of R&D intensity and patenting, spending on average only 0.56 per cent of turnover on R&D expenditure. Even in large firms this rises to just 0.71 per cent.13 The gears are grinding You don’t need an MBA from Harvard Business School to spot a potential weakness in the government’s approach. China’s success over the past 20 years has relied on the architecture of bureaucracy and central planning. Can the same approach be used now to encourage innovation, experimentation and change? One person who is well aware of these contradictions is Ze Zhang, the vice president of Beijing University of Technology. We met him when he had just returned from the general assembly of the Chinese Association for Science and Technology (CAST): Everyone there was talking constantly of innovation. But I think we are only just beginning to understand what this word really means. It’s like gears grinding against one another. There’s a lot of tension between the push for innovation and the capacity of the political system to deliver it.14 Demos

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A political high-flier since his youth, Professor Zhang is now approaching retirement, and is not afraid to voice a few criticisms of government policy. On the wall of his office there is a gilt-framed photograph of his class from the Party School. Proudly, he points out his colleagues: ‘One became mayor of Shanghai, another is a viceminister. These are the people who are running China.’ For five years, Zhang himself played a central role in the machinery of science policy, as general secretary of CAST. He took the job in the hope of introducing reforms, but found it an uphill struggle. ‘I made a few changes, but it was very hard. I tried to resign twice but my resignation was refused.’ Zhang argues that the biggest obstacles are in the private sector: Probably the greatest challenge is to get Chinese companies to become more innovative. . . . Reform is needed here, especially in state-owned enterprises, where the bosses are still chosen by the Party. It’s not like shareholders who have the company’s best interests at heart. Another problem that has worsened in the past five years is plagiarism and research misconduct: Again, it’s the result of politics getting mixed up with science. . . . There are policies to encourage people to generate publications and patents and prizes. You get a score and if you are an ‘A’, you get 25 per cent more salary. It’s easy to understand why this leads people to plagiarise results. Every university has this problem. I’ve suffered from it myself. Some ex-students of mine took my data and published it in Science. This happened only five months ago. Zhang worries that this upsurge in plagiarism is having a corrosive effect on research cultures within universities and institutes. ‘Collaboration becomes very difficult. You can’t trust people not to steal your work. Everyone works with the door closed, in secret. This 24

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is very bad for innovation.’ However, he is cautiously optimistic that things may improve in response to recent science scandals: Now misconduct has really started to attract attention. Since the Hwang case in South Korea, people are more alert to the problem, and there will be more effort to solve it. But it’s not clear how easy it will be to root out. A wider debate The readiness of scientists such as Ze Zhang to speak out perhaps reflects a more open climate of debate over how the new plan should be implemented. Adam Segal, a China expert at the Council on Foreign Relations, a US think tank, detects a new tone in recent interactions between Chinese and international experts on innovation: There is a growing and refreshing scepticism among policymakers in China about how much policy and planning can actually deliver in relation to innovation. . . . There’s no longer a simple dichotomy between top-down and bottom-up.15 Yet while there are some encouraging signs of reform and openness within the Chinese innovation system, there is also a growing undercurrent of techno-nationalism.16 The roots of this go back to the nineteenth century and are intimately bound up with China’s anxieties over falling behind the West during the industrial revolution. After the founding of the People’s Republic of China (PRC) in 1949, China’s reliance on Soviet technology also gave rise to calls for greater self-reliance. Today, techno-nationalism finds expression in efforts to set new technological standards, and in the desire for a Chinese scientist to win a Nobel Prize. Aspects of techno-nationalism are also reflected in a range of trophy projects. One example is China’s growing ambitions in space. On 17 October 2005, after a five-day voyage, the astronauts Fei Junlong and Nie Hasheng landed safely on the remote steppes of Demos

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Inner Mongolia. This was China’s second successful human space flight, after an initial mission in 2003. The government described it as a technological breakthrough, and announced it was planning its first space walk for 2007. ‘Let us raise a welcoming toast to our heroes,’ declared the Xinhua news agency. ‘At this moment, history is returning dignity and sanctity to the Chinese nation.’17 These sentiments are not restricted to science and technology policy. Alongside talk of a ‘peaceful rise’ and ‘good neighbourliness’, popular forms of nationalism are increasingly evident in Chinese culture and politics. Occasionally, these spill over into something more visceral, as with the anti-Japanese demonstrations of 2005, but usually they are benign. Over the next decade, as China’s science and innovation capabilities grow rapidly, a central question is whether techno-nationalism will gather momentum, or whether the countervailing impulse towards global collaboration and exchange of new ideas – what we term in this report ‘cosmopolitan innovation’ – will prove stronger. In this context, it is interesting to reflect again on the phrase zizhu chuangxin, which features so prominently in the 15year plan. Professor Bai Chunli, the vice president of CAS, explains the phrase in terms of three linked aims: first, for China to produce original innovations in science and technology; second, for ‘integrated innovation . . . a process in which many technological innovations are integrated, culminating in the production of a new product’; and third, for ‘re-innovation on the basis of acquiring and absorbing imported technologies’.18 Aspects of this definition have raised some eyebrows inside multinational companies and foreign embassies, where there are worries about the intellectual property implications of a drive to ‘absorb’ foreign technologies. But among Chinese scientists, too, there are unanswered questions about what this might mean. Will it lead to a reduction in support for international collaboration? And in the context of global R&D networks, how will ‘independence’ be defined? Might research teams eventually be penalised for involving foreign scientists or Chinese based overseas?

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A gathering storm? Speaking at a science policy forum in New York in August 2006, Shang Yong, China’s vice minister for science was keen to emphasise that zizhu chuangxin posed no threat to the US or other countries, but would ‘boost the global economy . . . and bring opportunities to global industrial restructuring and upgrading as well as sustainable development, thus benefiting the whole world’.19 Nonetheless, there clearly are tensions here that will take some years to play out. Science and technology is one of a number of arenas in which China faces choices about how proactively to engage with international projects, networks and institutions. Europe needs to strengthen both the political case and the practical mechanisms to underpin closer collaboration with China, to the benefit of both sides. The alternative is to turn inwards. And it is important to recognise that this is not only a danger for China, but also for Europe and the US, where the speed of economic and social change under globalisation can breed fear and suspicion of new rivals as much as it encourages collaboration. In this scenario, techno-nationalisms become mutually reinforcing: European or US over-reaction to China’s perceived self-interest may fuel a more aggressive cycle of competition or protectionism. There are hints of this in the 2005 report from the US National Academies of Science, Rising Above the Gathering Storm, which warns that ‘for the cost of one chemist or engineer in the US, a company can hire about five chemists in China or 11 engineers in India’. As a result, the US ‘could soon lose its privileged position’ in science, with new competitors just a ‘mouseclick away’.20 In Europe, the tone may differ, but there is no disguising the existence of similar concerns. Knowledge is power Science is caught up in a bigger unfolding debate about the pace, scale and direction of China’s economic and political reforms. Given the levels of investment and ambition represented by the new 15-year plan, there can be little doubt that China will be a growing force in Demos

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global science and innovation over the next decade and beyond. But a lot still depends on the playing out of a complicated set of tensions: between the planned economy and the market; national and global priorities; the hardware of research infrastructure and the software of culture and ethics; and the skills and creativity of the scientific workforce and the entrepreneurialism and networks of returnees. In charting possible futures for Chinese science, we must resist the temptation to ask only ‘how much? or ‘how fast?’, and instead start to consider ‘which direction?’, ‘says who?’ and ‘why?’21 Following a decade of chaos and destruction during the Cultural Revolution, China’s innovation system had to be rebuilt from scratch. To have come so far, so fast in just 30 years is little short of astonishing. Looking ahead, as China begins to tackle a fresh set of daunting social and environmental challenges, the big unknown is whether it might choose to direct its growing capabilities for innovation towards an alternative vision of development, more sustainable than our own. Adding it all up Table 1 summarises some of the headline measurements of science and innovation in China. But gathering accurate data in a country the size of China is never easy. Writing in the Financial Times, Guy de Jonquieres likens the challenge confronting China’s economic managers to ‘piloting a speeding jumbo jet half-blindfolded, relying on wildly inaccurate instruments and controls that respond sluggishly, if at all’.22 Entire chapters could be written on the subtleties and potential interpretations of each of the statistics in this table. Whether in relation to publications and citations or levels of investment in cutting-edge science, the aggregate numbers now coming out of China are impressive. But they still tell us only part of the story. There is no straightforward path from quantity to quality. Alongside excellence, there is unevenness: in certain areas of science, done in particular places, China is world class, even while the rest of the system lags behind. Raising overall performance across the innovation system will require sustained efforts to link the hardware of investment and infrastructure to the software of culture, values and creativity. 28

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Table 1 Headline statistics Quantity

Year

Source

GDP growth rate

9.9%

2005

National Bureau of Statistics, China/MOST

% GDP spent on R&D

1.3%

2005

GDP total

18,232 billion RMB

2005

Government R&D budget

71.6 billion RMB

2005

Annual rate of growth in government R&D budget

19.2%

2005

S&T workforce

2.25 million scientists and engineers

2004

1.15 million person years spent on R&D

2004

Enrolment in tertiary education

15 million

2004

Enrolment in postgraduate programmes

820,000

2004

Number of science, medicine 6,508,541 and engineering undergraduates

2004

Number of science, medicine and engineering postgraduates

2004

502,303

National Bureau of Statistics, China

Ministry of Education

Key MOST, Ministry of Science and Technology; S&T, science and technology

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Table 1 continued Quantity

Year

Source

PhDs awarded

23,500 (70% in sciencerelated subjects)

2004


Number of students studying abroad (1978–2003)

700,000

1978– 2003

Number of overseas students returned to China (by 2003)

170,000

2003

Number of colleges and universities

1731

2004

Number of graduate schools/ research institutes

769

2004

Number of universities in global 6 (Beijing, 14; 2006 top 200 (university, position) Tsinghua, 28; Fudan, 116; China University of Science and Technology, 165; Shanghai Jiao Tong, 179; Nanjing, 180) Number of universities in global top 100 for science (university, position)

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5 (Beijing, 12; 2006 China University of Science and Technology, 32; Tsinghua, 41; Fudan, 63; Nanjing, 70)


Times Higher Education Supplement


Table 1 continued ICT uptake

Quantity

Year

Source

390 million mobile phone users

2005

Economist

111 million internet users

2005

Number of scientific publications 13,500 (in SCI) 46,000

1995

Share of world citations

0.92%

1995

3.78%

2004

Evidence Ltd

2004

Applications for invention patents

130,000 2005 (around half from multinationals)

Growth rate of invention patent applications

23% annually since 2000

2005

Share of total applications for invention patents

Foreign companies: 86%

2005

SIPO

Chinese companies: 18% Chinese enterprises that have never applied for patents

99%

2005

National share of international patents filed with WIPO

1.4%

2005

WIPO

Key ICT, information and communications technology; SCI, Science Citation Index; SIPO, State Intellectual Property Office of China; WIPO, World Intellectual Property Organization

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Year

Source

US patents granted to Chinese applicants

424

2003

USPTO

Inflows of foreign direct investment

US$72.6 billion 2005

UNCTAD World Investment Report

Multinational R&D centres in China

750 (of which 2005 c.200 doing high-level R&D?)

Chinese Ministry of Commerce

Chinese companies in top 500 global companies by R&D investment (company, position)

4 (PetroChina, 2006 185; China Petroleum, 260; ZTE, 298; Lenovo, 356)

UK DTI Global scoreboard

Key UK DTI, UK Department of Trade and Industry; UNCTAD, United Nations Conference on Trade and Development; USPTO, US Patent and Trademark Office

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3. India: the uneven innovator 23

Guru Ganesan brandishes a copy of the San Jose Mercury News with the headline: ‘The valley didn’t die, it moved to Bangalore’. Ganesan runs the Indian research centre of ARM, the UK designer of semiconductors. This lab is a carbon copy of a sister facility in Austin, Texas, and does research of an identical quality, according to its managing director. Ganesan is one of the new generation of globally networked, technological elites who are driving India’s emergence as a source of innovation. All around Bangalore, recently renamed Bengalooru by the government, ‘little Americas’ are springing up, as they are in other fast-growing cities such as Hyderabad and Pune. On some of these housing developments 80 per cent of the residents are Indians who have lived overseas, returning to take advantage of the opportunities opening up at home. Where Ganesan lives they even go trick-ortreating on Halloween. Yet despite the media hyperbole, this at times chaotic south Indian city is a long way from becoming a Silicon Valley. The success of its software and service industries is still to make an impact on the lives of the majority: 390 million people in India live on less than $1 a day.24 Predictions that India will become a twenty-first century knowledge superpower have to accommodate these contradictions. Demos

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The Indian economy is booming. Economic growth has averaged around 8 per cent since 2003.25 According to Goldman Sachs, India has the potential to grow faster than China in the long term.26 In just a few years India has been transformed from an aid recipient to a global competitor. ‘India everywhere’ was the slogan for the Davos World Economic Forum in 2006. But these macroeconomic trends, including a threefold increase in R&D spending over the past decade,27 do not convey the complex dynamics behind the rise of Indian science and innovation. The impact of the R&D centres that have been set up by multinational companies is still unfolding, as is the contribution of the thousands of Indians returning from abroad. India does not conform to the state-led model of economic development of the East Asian tiger economies in the 1970s and 1980s. Modernisers in the Indian government want the state to become a catalyst for change. But others doubt whether the so-called ‘license state’, encrusted with layers of bureaucracy and regulation, is capable of playing such a dynamic role. Above all, India’s rise as a source of innovation reveals its intense and sometimes troubled relationship with external ideas and influences. For much of the postwar era, India was a copier and adapter of technology developed in Europe and the US: foreign technology was a mark of prestige. That is why even now the taxis in New Delhi made by the Hindustan Motor Company are modelled on the ancient British Oxford. After independence in 1947, admiration for foreign technology coexisted with a period of science nationalism, in which the government launched a string of programmes to promote indigenous Indian science. During the 1980s and 1990s, Indian brainpower serviced the technology needs of foreign companies, health and education systems around the world, either by migrating to places such as Silicon Valley or directly from call centres in Bengalooru. The question now is how quickly India can evolve from being a technology server to an innovator and creator in its own right.

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Ancient excellence India’s potential as a centre for innovation is the product of earlier periods of scientific development that together will condition the path India takes into the future. For centuries, India was the world’s largest economy, producing a third of global gross domestic product (GDP). Indians, like the Chinese, were an advanced civilisation when Europeans were still barbarians. From this perspective, we are not witnessing the emergence of India as a scientific power so much as its re-emergence. Evidence of advanced technological culture comes from archaeology as well as scripture. The Harappans in 2500BCE had a sewage system at their city of Mohenjo-Daro and carefully laid out streets, indicating advanced notions of geometry. Ayurveda, the science of longevity, which still plays a significant role in Indian medicine, dates back to 800BCE. India developed the mathematical concept of zero in about CE600, as well as the decimal system. Even Pythagoras, in the sixth century BCE, is said to have learnt his basic geometry from the Sulva Sutras. By 200BCE, Indian scientists were the first in the world to be smelting iron with carbon to make steel. Yet Indian science, with its deep intellectual roots, never translated into an industrial revolution like that in Europe in the late eighteenth and early nineteenth centuries, in which science, engineering and wealth were so powerfully combined. By 1850, when Britain’s colonial dominance was reaching its peak in India, British technological capability was the envy of the world. Britain colonised India with soft power – science and engineering, ideas and language – as much as with war. Dependence ‘Modern science’ was introduced to India under the shadow of colonialism.28 The British founded the first Indian universities in the late nineteenth century and imposed English education and language, which was rapidly appropriated and propagated by the Indian elite. Scientists earned prestige by doing modern, western science. Yet Demos

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colonial dominance was never complete. Hybrid approaches to science melded local and western knowledge. Ironically, the English language and western scientific knowledge, intended as tools of domination, have since become crucial to India’s emergence as a source of global know-how. These colonial tools were not rejected when India gained independence, they were appropriated. Independence Science became a touchstone for national development following independence in 1947. Jawaharlal Nehru, India’s first prime minister, declared that ‘science alone . . . can solve the problems of hunger and poverty, of insanitation and illiteracy, of superstition and deadening customs’. Science became ‘as important as the national flag’.29 For Nehru, it was a route to self-sufficiency, industrialisation and national security. One of the legacies of Nehru’s vision is the Council for Scientific and Industrial Research, a network of national laboratories designed to transform India’s indigenous capacity for scientific excellence. Nehru’s vision of science modernising the nation stood in contrast to Gandhi’s more diffuse, democratic and domesticated ideal of ‘every man a scientist and every village a science academy’. This tension between science for national prestige and science for basic development remains acute today. India’s space programme, launched in 1963, is a prime example of how science can serve the needs of both modernisation and rural development. India launched its first space satellite in 1975. Its first home-grown rocket was launched five years later. By 2008, India plans to have sent its unmanned Chandrayan 1 rocket on a mission to the moon. But Indian space technology has also served rural development. Vikram Sarabhai, the programme’s original architect, insisted it should also serve ‘the common man’, by using satellites to provide communication, meteorology and education across rural India. Nuclear energy was another important focus of India’s independent science. Only 11 days after Indian independence in August 1947, Dr Homi J Bhabba convinced the Atomic Energy Research 36

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Committee to set up a nuclear research programme. A year later, the Atomic Energy Commission was formed with Nehru’s enthusiastic support. The nuclear science that started in this period is still critical to India’s position in the world. In 1998 India provoked international outcry by testing nuclear devices in Rajasthan, only 150 kilometres from the Pakistani border. But in 2006, US President George Bush signed an agreement on civil nuclear technology with India, which symbolised India’s increasingly interdependent and strategic relationship with the US. It was also under Nehru that the Indian Institutes of Technology (IITs), the icons of India’s technological prowess, were inaugurated. The IITs were a symbol of independence; they marked a break from the universities of the British Raj. Yet they were modelled on the Massachusetts Institute of Technology and helped to sow the seeds for India’s relationship with the US and the current period of scientific and technological interdependence. Interdependence In the postcolonial era, science was seen principally as a national activity for national purposes. Now science is a global activity, dependent on international networks of knowledge-sharing in fields where science itself is increasingly complex, and research requires the combination of many disciplines. India’s move towards global interdependence in science is the product of several factors. India has been open for global business for little more than two decades. Twenty years ago, only a few foreign companies were permitted to set up in India. These days Indians excel at networked and outsourced business models that are international in scope. New ventures created in Silicon Valley now depend on an Indian connection for technical support. Indian companies are applying the skills that they have built up in outsourcing basic business processes to new areas of innovation and research. Underpinning this are flows of people, ideas and cultures. An influential slice of the 20 million Indians spread around the globe are Demos

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scientists, technologists, engineers and entrepreneurs. In the 1970s, policy-makers in India bemoaned the brain drain that sucked talent out of what was then regarded as a poor third-world country. But those brains were in fact being ‘banked’ overseas rather than lost altogether. Now, many of the thousands of graduates who became successful in the US high-technology sector over the last two decades are returning to India for at least part of their time, bringing with them money, ideas, contacts and skills. During the Cold War, India led the ‘non-aligned’ movement and veered towards Moscow more than Washington. The watershed Indo–US agreement in 2006 demonstrated how Washington now sees India as an important counterweight to the rise of China. As C Raja Mohan put it in a recent edition of Foreign Affairs: ‘India is emerging as the swing state in the global balance of power.’30 Never before has India had such expansive relations with all the major powers. The US is central to this network of relationships. Outsourcers in Bengalooru and elsewhere serve mainly US multinationals in computing and telecommunications. Young graduates from the IITs prefer to go to the likes of Stanford or MIT and on to the Valley to work. Indians make up 14 per cent of the 3.1 million foreign-born science and engineering graduates in the US; 300,000 of them have doctorates.31 More than the numbers game Indian spending on R&D as a proportion of GDP now stands at just above 0.8 per cent GDP. This is well below the US and Europe, and also South Korea and China. But it is now starting to rise. At a speech in October 2006, Prime Minister Manmohan Singh announced plans to increase R&D expenditure to 2 per cent of GDP in the next five years. Close to 85 per cent of R&D spending in India is publicly funded, and government expenditure rose in 2005 by 24 per cent to reach $4.5 billion. As a result, few of the scientists we met complained of a shortage of funds. It was more common to hear reports of a system that was ‘flushed with money’.32 38

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Table 2 summarises some of the headline statistics. But measuring Indian science and innovation is like standing in a fairground hall of mirrors. Seen from one vantage point India seems like a scientific powerhouse in the making; from another it looks feeble compared with the scale of the tasks it faces. CNR Rao, chair of the Scientific Advisory Council to the Prime Minister, likens the Indian approach to science and innovation to the preparations for a wedding. There is quite often chaos. So many people appear to be in charge that no one is actually in control. Yet behind the scenes there is just enough coordination to make sure everything comes together at the last moment. In contrast to the orderly national innovation systems of countries such as Finland and South Korea, the Indian system looks ramshackle and improvised. But at its best it is capable of brilliance.


Year

Source

GDP growth rate

8.2%

2005

World Bank

% GDP on R&D

0.8%

200203

NSTMIS, Department of Science and Technology, India

Government science budget

US$4.5 billion

2005

NSTMIS

Enrolment in tertiary education for applied economic research

9.84 million

2004

National Council

Science PhDs awarded

6714

2004

NSTMIS

Engineering graduates per year

c.350,000

2005

UGC/CLSA Markets

Key NSTMIS, National Science & Technology Management Information System

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Table 2 continued Quantity Size of R&D infrastructure

Year

229 universities 2006

Source Ministry of Human Resource Development, India

96 deemed universities 400 government research labs 13 institutes of national importance Broadband infrastructure

3% adoption rate in urban India

2006

Forrester Research

Number of scientific publications (in SCI)

12,500

1999

Science and Development Network

15,600

2003

US patents granted

341 US patents

2003

US Patent and Trademark Office

Indian patents

23,000 applications

200506

Indian Patent Facilitation Centre

Foreign companies: 86% Chinese companies: 18%

40

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Year

Source

% of population living below US$1 a day

34.7%

2003

Human Development Index

% of population living below US$2 a day

79.9%

2003

Key SCI, Science Citation Index

Demos

41

4. South Korea: mass innovation comes of age 33

Rarely has so much hope been invested in a single scientist. Woo Suk Hwang symbolised South Korea’s ambitions to become a scientific power, and enjoyed a string of breakthroughs in 2005 which seemed to confirm his success. In the spring of that year, Science published his paper announcing the creation of patient-specific stem cell lines,34 a world first. In October, he opened the Seoul World Stem Cell Bank to international fanfare. When he spoke at the BioMedi Symposium in Seoul the following day, bolstered by a who’s who of international stem cell research, he was cheered as a celebrity. Hwang’s speech dwelled on the desperately ill patients who had found hope in the promise of his treatments, while also appealing to Korean nationalism. ‘I put the Korean flag in the middle of western science,’35 said Hwang, evoking the image of Neil Armstrong planting the US flag on the moon. Some estimate that more than US$60 million of public money was invested in his work. Everything he did was designed for optimal media coverage, from a failed attempt to clone a tiger to a cloned dog, Snuppy.36 In June 2005 the Ministry of Science and Technology (MOST) elevated Hwang to become Korea’s first ‘Supreme Scientist’. In little more than a decade, Korea, a country the size of the US state of Indiana with no internationally known pharmaceutical companies and little biotech capability, had catapulted itself to leadership in one of bioscience’s most promising fields. Hwang’s 42

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success sent out a wider message: Asian science could leapfrog the West faster than anyone had dared predict. His advances were the basis for research elsewhere in the world. Researchers in Europe and the US used Hwang’s success to argue for more funding to keep pace. But all too quickly Hwang’s success story unravelled. Suspicions were raised over whether Hwang had encouraged female researchers to provide eggs for experiments. Worse, Hwang was then accused of faking his results. An inquiry by Seoul National University (SNU), his university, found that the experiments could not be replicated. By late 2005, Korea’s superstar scientist was on trial as his personal ‘stem cell bubble’ burst spectacularly, prompting a mix of bewilderment and denial across Korea. People were slow to accept that Hwang could be a fraud. In March 2006, weeks after the SNU Investigation Committee had confirmed the fraud, 4000 people in Seoul marched in support of the fallen celebrity. In the wake of ‘Hwanggate’ it might be tempting to write off Korea as a science power. The idea that a still-developing Asian nation could leapfrog western science seems to have proven far-fetched. Even a superstar scientist couldn’t compensate for the structural weaknesses of the system, in which less than 10 per cent of pharmaceutical companies conduct R&D.37 But just as too much was invested in Hwang it would be a mistake to write off Korea’s potential to become a significant source of science-driven innovation. Korea has achieved miracles in the past 40 years, and it might do the same again. Korea’s industrialisation miracle South Korea emerged from Japanese occupation and a civil war that killed more than one million people, with gross domestic product (GDP) per capita of US$80 in 1960. By 2005, it had become the world’s tenth largest economy, with GDP per capita of over US$15,000.38 It achieved this thanks to US support and a combination of hard work and brainpower. South Korea had little else to rely on: partition gave 75 per cent of Korean energy resources to the north. Demos

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In the ‘imitation phase’ of Korean development in the 1960s and 1970s, state-directed industrial policy kicked off Korea’s growth.39 Korean firms were contracted as suppliers to US and Japanese companies. Gradually, these firms internalised and redeveloped technologies from the West to become competitors in their own right. The government facilitated investment in R&D by sharing risk through government research institutes that helped companies to develop key technologies. Korean scientists who returned from the US were enlisted in national projects. The ‘internalisation phase’ of the early 1980s took a slowdown in the world economy, combined with rising costs, as the prompt for further investment in R&D. Private sector R&D investment increased from 0.21 per cent to 1.17 per cent. Companies such as Samsung started making branded goods in their own right. Korean analysts have dubbed the 1990s the ‘innovation phase’,40 with Korean companies less dependent on foreign designs and intellectual property and more able to explore emerging technologies, for example in mobile communications, on equal footing with US and European competitors. In 1998, the Korean government set out to turn the country into a knowledge economy, committing to doubling investment in R&D and increasing the R&D labour force from 180,000 to 250,000 by 2007.41 In short, a country that was on its knees at the start of the 1960s, with few natural resources, a limited higher education system and little or no research has succeeded through a mixture of brainpower, work effort, state direction of large companies and US support, to become one of the most technologically adept and best-educated societies in the world. R&D spending was almost 3 per cent of GDP in 2005:42 about 75 per cent of it from private industry. Public funding for R&D in 2006 was US$8.65 billion, a 15 per cent increase over 2005. Korea is ranked 15th in the world in terms of scientific publications. Between 2000 and 2004, Thomson Scientific indexed 81,057 papers with at least one author in South Korea.43 Korea has the highest annual growth in patent families – more than 20 per cent44 – and the highest growth in 44

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US patents from 1986 to 2003. More than 50 per cent of the workforce has a degree, but wage levels are about 50 per cent of those in Europe. In many areas, Korean infrastructure for science and its technological capability is world class. Future plans Korea also deserves to be taken seriously because it has ambitious plans. The future, not the past, is where Korea’s science and technology (S&T) begins. Nearly every government department, university, research institute or company has a vision for the future. These visions can sometimes appear to be no more than slogans. Korea is used to setting itself ambitious targets without being clear how to reach them. But if Korea delivers only a share of what it has set out to achieve, it will still be a significant force in science and technology. Ten next-generation growth engines were identified in 2003, designed to drive Korea’s ‘second leap’ to GDP of US$20,000 per capita by 2012. The Ministry of Information and Communications (MIC) ‘Ubiquitous Korea’ or ‘U-Korea’ IT839 Strategy is designed to help Korea realise a digital welfare state, at a cost to government and private industry of US$70 billion by 2010. The Korea IT Industry Promotion Agency (KIPA) is promoting open source to turn Korea into an international software ‘powerhouse’ with 40 per cent of servers running open source operating systems by 2010. The Korea Bio-Vision 2010 aims to push South Korea’s biotech ranking from 13th in the world in 2003 to seventh by 2010.45 Hwang’s disgrace has galvanised a renewed effort involving ten ministries to put Korea in the top three counties in biotech by 2015.46 Government plans are for Korea to have ten cutting-edge nanotechnologies and 12,600 nanotechnology experts by 2010.47 Hwang’s spectacular failure should not mislead us. Korea has the resources and intention to be a bigger player in S&T innovation. It will also be followed closely as a model by many regions in China. However, there is still widespread uncertainty about Korea’s capacity to deliver on these brave visions and make the transition Demos

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from state-driven industrial development to ubiquitous knowledge economy. Will the techniques that have got Korea so far now become obstacles? The evolving Korean model Korea’s evolving innovation system is the product of three linked approaches that sometimes work together but often seem at odds with one another. The first is industrial techno-nationalism. The state development model, working with large conglomerates (the chaebol) as the main vehicle, remains a powerful top-down model of development. One of the biggest questions for Korea is how far reform of the ‘statemanaged, big company’ economy will go. One force for the future, particularly in the wake of the economic crisis of 1997, could be reformed, outward-looking and innovative large companies such as Samsung. Yet critics argue that in the last few years efforts to create a more transparent and competitive economy have slowed. Few other Korean chaebol seem ready to match Samsung’s capacity for innovation and internationalisation. The second is scientific techno-nationalism. In the last decade, the techno-nationalist model has been extended to encompass worldclass science. This approach emphasises a new generation of scientists and high-tech entrepreneurs as the key figures in this story. Funding for science has expanded dramatically and is set to continue rising. But so are the expectations and pressures on scientists to deliver results. As a result, pressure for reform to Korea’s research and university system is likely to mount. More investment in science as the basis for future development will also expose Korea to greater international collaboration and scrutiny. It remains to be seen what kind of science will emerge from this investment. Government is increasing the share of R&D funding put towards basic research to match efforts in more developed economies.48 But impatience to get results also puts scientists under pressure to deliver results. The Nobel garden at Pohang University of Science and Technology (POSTECH) includes empty podiums for future Nobel prize-winning Korean 46

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scientists. Korea desperately wants recognition for its status as a leading source of scientific innovation, but the techno-nationalist model of getting results fast may well be at odds with Korea’s ambitions to do world-class science based on long-term research. The third approach is ubiquitous innovation. Korea is one of the most networked, connected and well-educated societies in the world. Mobile telephone penetration is expected to be over 80 per cent in 2008.49 Phones are beginning to provide not just entertainment but health services. Korea’s ubiquitous broadband infrastructure can facilitate mass innovation and creativity: CyWorld, for example, is one of the world’s top internet networking sites, a combination of blogs, music and chat where people pay to decorate and personalise their mini home pages. OhMyNews has redefined citizen journalism, providing a multilingual site with millions of readers managed by a team of editors a fraction of the size of a traditional newspaper. President Roh was swept into office by his huge online fan base. Hwang’s collaborators first revealed their concerns about his ethics online. Korea has the potential to become a society where aspects of innovation become a mass activity. Its demanding and educated consumers may well drive the creation of new markets in communications, information and services. Ubiquitious innovation is emerging alongside the other Korean models of innovation, but is not yet dominant. Under industrial techno-nationalism, the main protagonists are the state and the chaebol, backed by a hard-working, largely deferential labour force, absorbing knowledge from the West where needed. Under scientific techno-nationalism, the main players are scientists and entrepreneurs supported by the state. Dr Hwang was the most extreme case of this reliance on superstar researchers and high-profile programmes to propel Korea into the knowledge age. Under ubiquitous innovation, the main players are internationally connected Koreans and entrepreneurs working through networks, in a society that combines unprecedented levels of education and connectivity. This mass culture of creativity is already making itself felt in mobile communications and computer gaming but it could Demos

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soon migrate into other services such as banking and health care. It is not difficult to see how these models could work together through a mix of state investment in infrastructure, science creating new technologies that are transformed into products by large and small companies, educated and technologically adept consumers quickly adapting new technologies and allowing Korean companies to learn fast about how to apply them. But these approaches can at times sit in tension. Hwang’s fraud was exposed by the younger internet generation, who want the freedom to define their futures, and are open to globalisation. On the Biological Research Information Center (BRIC) online message boards a thread was started by an anonymous author on 5 December 2005 entitled ‘the show must go on . . .’, hinting that some of the pictures in one of Hwang’s Science papers were duplicates. Hundreds of posts examining the paper followed. That online review forced Hwang to agree to a DNA analysis of the stem cell lines. Soon afterwards the paper was withdrawn and SNU started the investigation that led to Hwang’s downfall. The more Koreans engage in science, the more international exposure will follow, which will be a challenge to the ethos of techno-nationalism that has driven Korea forward for almost 50 years. Korea will become a knowledge-driven, innovation society only by at times being painfully at odds with itself, as it learns to navigate the shift from a top-down, techno-nationalist approach to one that is more open, cosmopolitan and unplanned. The magic numbers Table 3 summarises some of the key measures of innovation in Korea.

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Year

Source

R&D expenditure

US$25.03 billion 2005

% GDP spent on R&D

2.99%

2005

Number of industrial R&D centres 12,104

2005

KOITA

Number of R&D personnel

297,060

2003

MOST

Researchers in R&D per 10,000 people

1.8

1970

16.4

1990

31.6

2003

Enrolment in higher education

81.3%

2004

KEDI

Broadband internet subscribers

1st out of 105 countries

2005

WEF

Peer-reviewed scientific publications

81,057

2000– 04

Thompson ISI

Global ranking in peer-reviewed 15th publications (1995–2005)

1995– 2005

Patent applications filed (residents)

76,860

2005

Patent applications filed (nonresidents)

126,836

2005

Patent commercialisation ratio

26.7%

2005

MOST

WDI

NCST

Key KEDI, Korea Education Development Institute; KOITA, Korea Industrial Technology Association; MOST, Ministry of Science and Technology; NCST, National Council of Science and Technology; WDI, World Development Indicators; WEF, World Economic Forum

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Year

Source

Deloitte Competitiveness Index

13 (out of 25 countries)

2005

Deloitte

World Economic Forum Global Competitiveness Index

24 (out of 2006 125 countries)

Quality of maths and science education


Transparency International Corruption Perceptions Index


Key WEF, World Economic Forum

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WEF

Transparency International

5. Eight forces in the new geography of science

Despite their significant differences, innovation in China, India and South Korea will share certain themes. These are not emerging science powers but re-emerging. In all these countries science has an ancient history. In Europe, we associate science with modernity. In these societies, science is also associated with antiquity. The combination of modern scientific techniques with ancient and alternative forms of knowledge may yet bear fruit in areas such as health care. All are emerging, hesitantly, from economies that were heavily regulated by the state. In Korea the state organised industrial development by carving up markets for favoured chaebol. The 1997 financial crisis led to International Monetary Fund-enforced reforms, which some critics allege are now running out of steam. In India, innovation was kick-started by the 1991 economic reforms, but the piecemeal dismantling of the so-called ‘license Raj’ still has a long way to go. In China, the state is attempting simultaneously to control and deregulate the economy, for example through the creation of new zones for economic reform in Pudong and Binhai. How far and fast these reforms go will determine to what extent innovation is driven by the market or the state. Reforms to promote innovation are triggering cultural and social tensions, as reformers in favour of more open, cosmopolitan and market-based approaches find themselves pitted against defenders of Demos

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more inward-looking, state-sponsored solutions. All three countries are hungry for international recognition as equals of the developed economies. In South Korea and China, science and technology are projections of national power and virility. The disgraced Dr Hwang claimed to be ‘planting the Korean flag in the heart of western science’. Yet the reality is that science and innovation will require these countries to be more open to global flows of ideas and people. Modern Indian science, for example, is a complex mix of institutions inherited from the British Raj, state-sponsored programmes started after Independence and companies created out of more recent connections with the US and Silicon Valley. Growing involvement with science will make these societies more cosmopolitan even as they aim to develop science for nationalistic goals. 1. The momentum of the market Innovation will be pulled by the market. Western firms will do more research and development closer to their growing pool of Asian consumers. Growing markets will also support a new generation of high-tech Asian companies. Under a system of state planning, innovation to expand market share was pointless. But India and China now have a combined population of 2.3 billion and are creating an urban middle class on a vast scale, which will demand more sophisticated, branded consumer goods. China already has 90 cities with more than one million inhabitants and is expected to create 60 more in the next 20 years. ABB, the engineering group, has shifted more of its R&D to Beijing because China is the world’s fastest-growing electricity market with a new coal-fired power station built every four days. Ericsson, Nokia and Vodafone are doing more R&D in China because it is adding 60 million mobile phone subscribers a year: the size of the entire UK market. The growing market for air travel is one factor behind Airbus’s decision to locate more production and development in China. Even Bill Gates, a long-time critic of China’s weak 52

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enforcement of copyright law, now believes intellectual property will be protected. India, with 17 per cent of the world’s population but only 2.5 per cent of global GDP, is enjoying economic growth of about 8 per cent. Goldman Sachs recently predicted India could grow faster than China over the long run thanks to its young and growing population. Threequarters of the Indian population is under the age of 25. Most remain poor: about 80 per cent live on less than US$2 a day. Reaching markets of hundreds of millions of poor consumers will require radical, low cost innovation. Low-cost innovations designed for poorer ‘peripheral’ markets – the $100 computer – could eventually disrupt core developed markets. Korea, one of the most educated and connected societies in the world, shows how advanced consumer demand can propel innovation. Korea has the highest rates of broadband and mobile phone penetration in the OECD. By 2008, high-speed mobile internet access should be pervasive. The government hopes tech-savvy and demanding consumers will rapidly take up new technologies and services – like mobile phone health monitors – that will provide Korean technology companies with a head start in world markets. Growing markets will also provide political leverage. China will try to make access to Chinese markets dependent on technical standards that favour domestic champions, and reduce reliance on standards set by consortia of foreign companies. 2. State support Governments are using the proceeds from sustained economic growth to invest more in innovation through dedicated research programmes, new institutions of science and more university research. However, policy-makers in all three countries want to reform their innovation systems to make them more productive, less disjointed, and more internationally connected. China’s R&D spending has been growing at close to 20 per cent a year since 1999, with plans for it to rise to 2.5 per cent of GDP by 2020. In Korea, R&D spending has risen from just 0.39 per cent in Demos

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1970 to close to 3 per cent today. India does not conform to the Asian tiger model of state-driven development. Yet even the Indian state may be acquiring some stripes. About 80 per cent of Indian R&D is publicly funded. In October 2006 Prime Minister Manmohan Singh announced plans to raise R&D from 0.8 per cent of GDP to 2 per cent by 2012. In 2005, R&D spending rose by 24 per cent to about $4.5 billion. Indian modernisers are trying to shift research spending into more productive areas. The government runs 400 laboratories of variable quality. RA Mashelkar, until late 2006 the head of the Council for Scientific and Industrial Research, the government science and innovation agency, developed plans for a raft of new institutions, including a National Science and Engineering Foundation for fundamental research, and two new Indian Institutes of Scientific Education and Research. Ambitious state investment brings risks as well as resources. Critics of the Chinese research system argue that much of the increased investment in science will be wasted through poorly run programmes, with weak peer review and governance. In Korea, critics of Dr Hwang, the disgraced stem cell scientist, argue that he faked his findings because he was under government pressure to deliver eyecatching results. Innovation cannot be delivered to a plan. High state investment in research in China and Korea comes with a price: the expectation of rapid results that can be translated quickly into commercial applications. That will make life uncomfortable for many scientists and could lead to more scandals. 3. Multinational innovation Famous corporate names are setting up research facilities in knowledge parks all over India and China. From Intel and Microsoft, to Siemens and Vodafone, to Unilever and Merck, multinational companies are attracted by growing markets and the pool of cheap but highly skilled labour emerging from elite universities. Research and development was traditionally a headquarters function, done close to home. But in the last five years, advances in 54

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computing and communications, combined with experience of offshoring other activities, has made large companies far more adept at innovating through global networks. In China, there were about 20 multinational R&D centres in 1997; by 2006, official figures put the total at 750. India hosts about 150 centres, more than 100 of them opened since 2002. Korea wants to become a hub for R&D in north east Asia, attracting multinational companies to free economic zones like Incheon. But it is starting from a very low base: only 0.4 per cent of Korean R&D is done by foreign companies. These research centres are no longer just adapting western products for local markets. Almost without exception the 80 international R&D managers we spoke to said they were researching technologies to create products with global potential. Research centres like Microsoft’s in Beijing or Adobe’s near New Delhi are global centres of excellence. In China, R&D managers acknowledged it could take time to foster creativity among staff who were mainly educated through rote learning. However, they argued that western-style management combined with a Chinese collective work ethic was a potent combination. Companies like Intel and GE are endorsing the quality of Indian and Chinese research and the improving environment for intellectual property protection. These centres bring critical skills in innovation management that are in short supply locally. Yet multinational research centres may be a mixed blessing. They attract the brightest and best researchers away from the public sector and indigenous companies. There seems to be little mobility between multinational centres and local companies in either India or China. Entrepreneurial spin-outs from multinationals are still rare. Multinational research centres will benefit India and China only if they increasingly interact with local economies through spin-offs, labour mobility and partnerships with smaller companies and universities. Until then, as Professor Belaram, director of the Indian Institute of Science in Bengalooru, says: ‘These companies are only Demos

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geographically located here. They contribute little to the science base here. In fact as the R&D centres grow the interaction with science diminishes.’ 4. People and skills India and China are creating large pools of talent skilled in disciplines such as physics and chemistry, which are increasingly falling out of fashion in the UK and the US. Between them South China, India and Korea have about 2500 universities. Europe has 2000. India’s domestic talent pool comprises 14 million recent graduates, 1.5 times the number in China and twice that of the US. India produces 2.5 million new graduates a year in IT, engineering and life sciences, with 650,000 postgraduates and between 4000 and 6000 PhDs. The pinnacle of the India system is the six Indian Institutes of Technology. Six Chinese universities are already in the Times Higher Education Supplement’s worldwide top 200 and the government is investing heavily in a core group of about 100 to raise them to international standards. China enrolled 4.74 million undergraduates in 2004, up from one million a decade before, and produced 23,500 PhDs in 2005, 70 per cent of them in science and engineering. China has 1731 colleges and universities with more being created the whole time. About 820,000 postgraduates a year emerge from 769 graduate and research centres. The main university district of Beijing is home to 50 universities. This area alone produces more science and engineering graduates than most of Europe. Korea prospered after its civil war only through heavy public and private investment in education. By 2006, about 95 per cent of Korean 25–34-year-olds had at least a secondary school leaving certificate and 80 per cent of young Koreans study at university. In 1970, Korea’s 142 higher education institutions enrolled 201,000 students. In 2004, 411 institutions enrolled 3.5 million, about 40 per cent of them in science and engineering. Yet despite leading the world in secondary education, Korean universities lag behind. Only one Korean institution – Korea’s 56

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Advanced Institute of Science and Technology (KAIST) – made it into the Times top 200. India is in a similar position. RA Mashelkar, the head of India’s Council for Scientific and Industrial Research, estimates that only 10 per cent of India’s 229 universities do world-class research. Even the most prestigious institutions find it difficult to recruit staff owing to competition from multinational companies: the Indian Institute of Technology in New Delhi, for example, is short of about 100 faculty. 5. The talent Gulf Stream They are coming home to roost. Since the 1970s, many of the brightest Indian and Chinese students, despairing of the limited opportunities on offer at home, went abroad to work and study, mainly in the US. Between 1978 and 2006 about 700,000 Chinese students left to study abroad. One recent graduate of Tsinghua we spoke to said 70 of her class of 99 were going to the US for further study. In the last decade, these people flows have started to go both ways. About 170,000 Chinese students have returned from abroad. One estimate is that 30,000 Indian software programmers have returned home from the US. Brain drain has turned to brain gain as scientists bring back research techniques and know-how to set up new publicly funded labs, entrepreneurs bring money and ambition to set up new business ventures, and multinational managers help navigate their companies into knowledge parks in Bengalooru and Shanghai. These returnees could be more critical to innovation than either large companies or state R&D programmes. Many of them keep a foot in both camps. In China we met scientists and entrepreneurs who commuted to Los Angeles or Washington DC to see their spouses and children. Nor do they necessarily fully integrate back home. Li Gong, managing director of Microsoft’s Windows Live in Beijing, speaks for many Chinese returnees when he says they are ‘kept outside the centre, in the import zone’. Worse, some face hostility from colleagues who have never been abroad or whose status may be threatened by returnees. Demos

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Returnees will energise, challenge and orchestrate innovation in India and China. Whether this circulation of talent is a permanent feature, however, depends on a number of factors. Younger generations in China and India seem to want to work abroad for only four or five years before returning, whereas their parents’ generation worked abroad for 15 or 20 years. If economic opportunities at home continue to grow, more will be drawn back, especially if the cultural climate for foreigners working in the US remains more clouded after 9/11. Overt government policies – such as China’s 100 Talents Programme and the Indian government’s creation of a new form of dual-citizenship status – can also help to bring people back. China in particular may have seen only the first wave of returnees. About 80 per cent of those who left in the 1980s have not returned. These include some of the most successful scientists and entrepreneurs. They could have a huge impact on China, but they seem unlikely to return in droves without further political reform. China’s national ambitions in science and technology could rest on creating conditions that can attract the most cosmopolitan group of knowledge workers in the world. 6. Homegrown enterprise Increased investment in science and technology will feed long-term growth only if it connects with a wave of entrepreneurship from startups and larger, more established businesses. Multinational companies are conspicuous in Asia’s knowledge parks. Home-grown innovation is harder to find. In India, for example, 86 per cent of companies do no R&D. In colonial times they imported technology. Post independence they operated in managed markets. Even the poster boys of corporate India, the giant software services companies, prosper by servicing western companies rather than creating their own products: Infosys spends less than 1 per cent of its sales on R&D. Though venture capital funds are expanding, entrepreneurs face daunting risks. Even promising start-ups from prestigious research institutions complain it is difficult to raise funding. 58

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There are bright spots: in the next ten years, India will produce new models of indigenous innovation from the pharmaceutical sector, where R&D spending rose by 300 per cent in the last five years. This may in turn lead to change in other sectors. Only 0.03 per cent of Chinese firms own the intellectual property on the core technology in their products, in part because Chinese companies spend just 0.56 per cent of sales on R&D. Smaller companies account for 65 per cent of Chinese patents and 80 per cent of new products, according to the Ministry of Science and Technology. But venture capitalists say there are still few signs of a Silicon Valley style start-up culture. China’s leadership sees it as a matter of national prestige to create home-grown technology champions. About 95 per cent of cars on Chinese roads are foreign makes. One delegate involved in drawing up the recent 11th five-year plan for science and technology estimated that Chinese technology accounts for just 4 per cent of its exports of $140 billion a year. Korea exemplifies the potential and the pitfalls of relying on national champions. The top ten Korean companies invest more than 4 per cent of sales in R&D. Companies such as Samsung Electronics have become household names around the world and models for a new kind of open, multinational Korea. Yet many critics believe most chaebol are stalling reforms to stifle new entrants, putting a brake on innovation. Smaller companies account for 87 per cent of employment in Korea and 42 per cent of exports. Entrepreneurial companies are emerging in sectors being opened up by new technologies that are yet to be colonised by the chaebol. More than 600 biotech start-ups have been registered. A string of young Korean multimedia companies have gone international, such as the internet search company Naver.com, which has kept Google’s Korean market share to 2 per cent. 7. New sciences in new ways Hyang suk Yoo, until recently the director of one of Korea’s most prestigious genetics programmes, spent three years researching her Demos

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PhD on stomach cancer. The computerised machines in her lab at Daejeon can now do the same task in 30 minutes. Yoo’s lab exemplifies how abundant computer power is changing science, especially in emerging fields, such as bio and nanotech, which are more open to new entrants than already mapped areas of scientific knowledge. Asia will not just produce more science but perhaps even new paradigms of science. Eras of science are defined by the tools that made them possible, from the telescope to logarithms and algebra. Today all sciences depend on computer power to handle large amounts of complex data. Top Asian research centres are investing in state of the art systems in buildings designed for the task. Jeffrey Wandsworth, director of the US Oak Ridge National Laboratory, told a conference in Seoul in March 2006: ‘The barriers to doing excellent science in the bio/nano/info converged space are falling. Really only about a $300 million investment in infrastructure is needed. This is an area where any country could compete and the possibilities are wide open.’ Computer science will play a critical role in convergent sciences such as bioinformatics. The Indian government estimates its bioinformatics industry will be worth $2.5 billion by 2010. Meanwhile, China is pushing aggressively into nanoscience, which is expected to produce radical innovations in nerve and tissue repair, pollution control and surface coatings in the next 20 years. China ranks third in the world in nanoscience publications and ninth in terms of funding, with investment of $111 million in 2004. The Chinese Academy of Science is the fourth most cited nanoscience centre in the world after Berkeley, MIT and IBM. Asia will also benefit from more rapid learning at the other end of the research pipeline, in testing and application. China may not yet lead the world in stem cell research but could do in applying research in clinical settings. India meanwhile opened the door to becoming the world’s pharmaceutical guinea pig in 2006 by removing the constraint that drugs should be proven safe in their country of origin before being tested on Indians. 60

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Asian countries will not just do more of the science we are familiar with. They will increasingly do new sciences in new ways as well. 8. Cultures and ethics of research Will Asian science rise on the back of a more pragmatic, resultsoriented, approach to ethics – an approach that many in Europe would find questionable? Policy-makers in all three countries recognise that to do high-quality science they need to comply with the guidelines laid down by the international scientific community. Since 1998, for example, China has played an active role in international debates on stem cell research and genomics. There is more doubt, however, over how regulations are enforced. According to Renzong Qiu, China’s leading bioethicist, attempts to insert ethical issues into major science programmes are often put to one side on the grounds that ‘the time is not yet right’. One researcher suggested that China’s Institutional Review Boards, which are meant to uphold ethical good practice, are: ‘Like a rubber stamp. There are no suggestions, no revisions, no rejections.’ Weak public scrutiny, combined with pressure on scientists to deliver results, creates further ethical risks. One is the kind of fraud exposed in the case of the disgraced Korean stem cell researcher WooSuk Hwang. Jin Chen, a returnee lured back from the US with a research fund of £7.5 million, was fired as dean of microelectronics at Shanghai Jiatong University after passing off Motorola chips as his own. Plagiarism is rife in Chinese universities: New Threads, a Chinese language website based in the US, has exposed more than 500 cases of research fraud. In November 2006, the Chinese Ministry of Science and Technology responded to calls for tougher guidelines with a new office for ‘research integrity’. Another issue is human trials. India is positioning itself as a world centre for contract research through new legislation that means a drug developed abroad can be tested on Indians, without being first proved safe on humans elsewhere. Critics allege this is a charter for risky drugs to be tested on unwitting, poor and illiterate hospital patients. In Henan, China, HIV-positive villagers complained they Demos

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had signed forms agreeing to be part of a drugs trial for a Californian firm without being told what the trials were for. Asian scientists feel an allegiance to the global norms of science. However, in China and Korea science is also seen as a tool for economic development, and scientists feel powerful demands from state and corporate funders hungry for results. Even in democratic India, with its strong culture of NGO scrutiny, the accountability of science to civil society is weak. Asian science is in danger of developing in a democratic vacuum: that may speed its growth but also distort it.

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6. Next people, next places

Asia is not innovating: particular city regions in Asia are. Some wellknown innovation centres – eg Bengalooru, which has 300,000 IT professionals among its population of seven million – are as intimately connected to global innovation networks as they are to their domestic economy. Many more are waiting in the wings. We will have to learn a new geography of innovation that will include places like Pune and Hyderabad, Chongqing and Zhongguancun, Incheon and Daejeon. All over Asia, regions aspire to be the next Silicon Valley. Yet few have Silicon Valley’s ingredients for success: a dynamic interplay between universities and entrepreneurs, venture capitalist and large companies, knitted together by high-velocity labour markets and levels of skilled immigration. In India, poor infrastructure and low levels of indigenous start-ups are big obstacles. Korea’s clusters tend to be dominated by government research institutes and large companies; there is less room for entrepreneurs and even less for immigrants. In China, knowledge parks mainly house high-tech manufacturing. Instead of new Silicon Valleys, we are witnessing the growth of different kinds of innovation clusters in Asia. By 2006 there were 53 knowledge parks in China with a further 30 planned by 2010. In the early 1990s, about 140,000 were employed in these parks; by 2006 it was 3.5 million. The largest is Zhongguancun, Demos

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spread across an area north west of Beijing, which houses the largest concentration of high-tech firms in China with a combined turnover of $29 billion. In Korea, there are government-sponsored science cities, such as the Daedok Innopolis, with 53 research centres and more than 6000 PhDs; and Songdo, a new wireless city being planned in the free economic zone close to Incheon international airport. The Chinese equivalent is the Binhai New Area, a 90-mile strip in the north eastern coast which will get $15 billion of infrastructure investment in the next five years. Then there are university-based clusters, such as the large – and partly still vacant – science park built adjacent to Tsinghua University near Beijing. There are clusters associated with companies – such as the Pohang cluster in Korea linked to POSCO, the steel company – or the software cluster in Bengalooru with the outsourcers Wipro and Infosys at its heart. Asia’s urbanisation is also creating a set of world cities – Mumbai, Seoul, Shanghai, Beijing – which will sustain a mass of industry and science, culture and media. These cities could be future centres of innovation in global terms in the same way that Vienna, Paris, Manchester and Glasgow were in their day. Congestion in Bengalooru is helping promote alternative centres in Hyderabad and Pune. Korea’s pervasive broadband infrastructure is creating new regional models for innovation. In China cities such as 31-million strong Chongqing aim to invest 2.5 per cent of local GDP in research and development by 2020, matching Shanghai’s current investment levels. The next places for the next science are rising up fast. Taking a long view Predicting where things are headed next is tricky. The already significant differences between these countries’ approaches to innovation may grow rather than diminish. Particular cities and regions will develop their own strengths. Each country will produce innovations that reflect their particular 64

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mix of strengths and weaknesses. China’s and Korea’s development is based on products, India’s growth relies on services. In China the state is at the centre of innovation efforts, in India the impetus comes from social networks and the private sector, and in Korea, the chaebol have surpassed the state as the largest funders of R&D. China’s innovation system is directed towards long-term goals. India’s is diffuse and chaotic. China is not a democracy, India is. China wants independent innovation to lessen its reliance on the West. India is positioning itself as an interdependent innovator to connect with the West. China’s innovation ideology is laced with techno-nationalism, India’s with the cosmopolitan confidence of the global Indian elite. Compared with China, democracy may be India’s strongest card: ensuring the freedom to think and debate, which may prove critical to long-term innovation. Assessing where these countries’ innovation systems are in 2006 is difficult enough. Casting forward to where they might be in ten or 15 years’ time is bedevilled with uncertainty. In all three countries, the pursuit of innovation has triggered political and social tensions that will themselves shape how innovation develops. Nationalists vs cosmopolitans

Techno-nationalism places a priority on science for national economic development and uses science to project national power and status. If techno-nationalism gets the upper hand it will favour prestige projects in high-profile fields – like defence, space and leading-edge fields of science. Cosmopolitan innovation starts from the reality that science increasingly depends on international collaboration, exchange and peer review. If cosmopolitan approaches gain the upper hand they will encourage regions to find specialist niches within linked global networks. These tendencies are sibling rivals: inseparable but at odds. Techno-nationalists see innovation as a means to promote independence. Yet investing more in science-based innovation – as Korea found through the Hwang affair – requires greater openness to foreign ideas and international scrutiny. Demos

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The Seoul government is now trying to position Korea as a centre for cosmopolitan innovation, the R&D hub of north east Asia. Yet much of Korean culture is still techno-nationalist: foreign investment into high-tech sectors is low because it is such a difficult place to do business. China’s policy promotes independent innovation and national champions, but the reality is that Chinese innovation is highly cosmopolitan: it depends heavily on returnees and foreign investment. India is by far the most cosmopolitan, in part because, by collaborating more closely with the US and others, it hopes to gain more strategic influence. In India, critics worry that too much interdependence has trapped Indian companies into servicing multinationals, rather than building up the indigenous knowledge base. Incumbents vs new entrants

Across Asia, governments are trying to shake up established research systems to make them more productive and market oriented. This is promoting a wave of new entrants into innovation whether these are new institutions of science funding and research like the Institutes of Scientific Education and Research (ISER) in India; returnees bringing ideas and methods from overseas; foreigners brought in to shake up the system like Robert Laughlin at KAIST; or entrepreneurial startups like Shanda in China. At every turn, new entrants face a rearguard action from powerful incumbents who want investment in innovation without fundamental reform, whether these are chaebol in Korea or academics in China seeking to keep returnees at bay. In India many government labs remain resistant to reform. Innovation in Asia will prosper the more room there is for new entrants and international approaches. The larger the share of increased spending on innovation that is captured by incumbents, the less impact it will have. Innovation will depend on how far reformers can go in challenging the status quo. 66

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The elites vs the masses

In Korea, the elite route to innovation is to invest in super-star scientists to come up with breakthroughs in the mould of Dr Hwang. Korea’s mass route will rely on ubiquitous innovation from a highly educated and connected population. In India, the tensions between elite and mass innovation are even more potent. India is a democracy of mainly poor farmers. Yet innovation is mainly an activity of city-based elites. Elite innovation in India will always be vulnerable to a political backlash unless it can bring benefits to the 70 per cent of the population who live in India’s 600,000 villages. There is much talk about innovation to create ultra low-cost products for poor consumers. The reality is that innovations that have improved living standards in rural India have tended to come from public funding, like the space programme or development NGOs. China’s lack of formal democracy does not make it immune from these tensions. Increased investment in innovation will directly benefit the city-based intellectuals, a key group the government needs to keep onside. But a national programme of innovation will succeed only if it also improves the basic living conditions for hundreds of millions peasants who need clean water, energy, transport and food. A growing number of rural protests may force a change of direction towards more basic innovation. The state vs social networks

In China and Korea, the state plays a central role, orchestrating science and innovation as a tool for rapid economic development. Yet innovation thrives in an everyday democratic culture in which ideas can be openly aired, debated and tested. In China that is still too difficult, but successful innovation will almost certainly depend on further economic and political reform. In India the state’s shortcomings put the onus on social networks to lead innovation, whether through the social networks of nonresident Indians and IIT alumni, or civil society networks of NGOs. Most of the action is outside the state. Demos

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Embracing science and innovation is in many ways the mark of a modern society: one that seeks to change itself through critical thinking. It is widely assumed that to do this a society must also take on the basic principles of liberal democracy: pluralism, tolerance, accountability and property rights. Yet China and India will be modern in quite different ways from one another and from the West. China is attempting an authoritarian modernisation combining markets and Communist rule. Indian innovation will be more open but also more fragmented, in a society of villages in which religion influences the way people think as much as science.

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7. Where Europe stands

Innovation is not an end in itself. It is a means to a clear end. To reach it, we have to change innovation from a buzzword in Europe, to a byword for Europe. José Manuel Barroso, President of the European Commission, 6 December 200650 The European Union needs to ready itself for a world of global innovation networks, in which ideas and technologies will come from many more places. It needs to act now, while Asia’s innovation capacity is still developing, and not in ten years’ time when it is already too late. The EU can ill afford to be vague about the kind of innovation it wants to be known for, not least because it will face huge strategic choices in a world in which there will be far more competition but also more opportunities for fruitful collaboration. Successful collaboration and competition both require more focus. Science and innovation are where manufacturing and finance were 30 years ago: about to go global. Europe needs to learn lessons from those industries. Its most competitive economies today are those that have embraced and sought to profit from globalisation rather than seeking to hide from it or erect unsustainable barriers. Its most dynamic regions and cities are those where autonomous universities, forward-looking investors and risk-taking entrepreneurs have come Demos

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together to nurture clusters of specialised, high-value industries that compete with the best in the world. But too many of Europe’s economies remain shackled to the past, and are ill equipped for the challenges of today, let alone those of tomorrow. To address this, the EU and its member states must invest more in science and innovation, and make international collaboration more central to their way of working. Steering European science and innovation will mean facing some tough strategic choices, that go beyond simply levels of funding for R&D. European countries, and even the Union as a whole, will not be able to compete with the scale and low cost of innovation in Asia. They will have to compete by using their resources more productively and creatively. That will require reforms to how science is funded, to promote innovation and research across disciplines; strengthening links across the innovation ecosystem between universities, business and finance; and ensuring that a culture of creativity and exploration thrives in universities. European countries will need to make choices about which areas of science they want to specialise in as other places build up their capabilities. They will need to rethink how they collaborate internationally and with whom, for example by merging more science programmes with partners in other member states, in the US and Asia to gain economies of scale. How EU member states govern and regulate science will be critical to this: securing public trust through greater and earlier openness to debate, while simultaneously supporting innovation in cutting edge fields such as stem cell research. Europe should lead the world in the good governance of innovation. Britain’s economy may now be focused on services, culture, media and software, but in Germany, high-value manufacturing – supported by a supply chain largely outsourced to the new member states – still accounts for a sizeable chunk of GDP. IT hardware production supports tens of thousands of jobs in Ireland. Each European country will continue to have its own, distinctive story of innovation; an economic space encompassing 27 countries 70

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Where Europe stands

and 480 million people will inevitably contain tremendous diversity. And as Europe’s economy – slowly but surely – integrates ever further, individual countries and regions are likely to become more, not less, specialised. Our recommendations for European policy-makers fall under four main headings. 1. Unleash mass collaboration The European Union should evangelise for the globalisation of knowledge, by advocating and exemplifying cosmopolitan principles of open science and innovation. Important steps in the right direction have already been taken. FP7 is better resourced than FP6; applying for its funds should be a less cumbersome process; and, above all, it will place applicants in third countries on a more equal footing with their EU partners by integrating funds for international cooperation into each of its thematic priorities. But the increase in EU funding for research and development also needs to be put into perspective. The EU will spend €54 billion on R&D through FP7, but over the same period it will spend €88 billion on rural development, €277 billion on regional aid and €318 billion in farm subsidies. It is true that EU spending on R&D supplements national spending, whereas farm subsidies are paid only from the EU budget. But even taking this into account, a glaring inconsistency persists between the importance that EU leaders claim to attach to innovation and the proportion of the budget that is allocated towards it. The 2008/09 review of the Union’s spending priorities offers the occasion to address this issue. President Barroso has already said that the review should have no taboos. Beginning now, the case should be made for a further – and more substantial – increase in funding for R&D at EU level. The aim should be to double the share of the budget devoted to ‘competitiveness for growth and employment’ – and, within that, to ensure that funding for FP8, which will run from 2014 to 2020, exceeds €100 billion. Demos

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Within this expanded budget, international collaboration should continue to attract more emphasis and investment. Research cooperation should become a more explicit and substantive component of the EU’s foreign relations with countries such as China and India. This point is well made in the Commission’s recent green paper, The European Research Area: Science knows no boundaries and the issues that research is asked to deal with are increasingly global. The challenge is to make sure that international S&T cooperation contributes effectively to stability, security and prosperity in the world. . . . A coherent approach towards international S&T cooperation, under the banner of global sustainable development, can assist in building bridges between nations and continents.51 To ensure progress towards this goal, in 2010/11 there should be a comprehensive mid-term review of the effectiveness of the new mechanisms in FP7 that aim to boost international cooperation. This will allow lessons to be learned, issues addressed and processes amended in time for 2014. 2. Be a magnet for talent Europe’s future as a home for science and innovation rests on its being open to attract and retain links with the best talent. Flows of scientists and entrepreneurs are the lifeblood of global innovation networks. Policy-makers would benefit from a richer and more detailed understanding of the position of EU member states in international talent flows and of the relationship between migration and innovation – an equivalent to the pioneering work that AnnaLee Saxenian at Berkeley has done on these flows in relation to Silicon Valley.52 The European Commission should undertake research into this phenomenon with the aim of creating a multidisciplinary body of knowledge and an annual EU-wide talent flow report. An annual scorecard of member states’ attractiveness to international researchers, 72

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based on objective criteria and drawing on harmonised statistics, should be produced. University international strategies must now evolve from a commercial model, where maximising student numbers is the principal objective, to a collaborative model, where research links and joint projects take far greater priority. Scholarships and exchanges are critical as a means of strengthening collaborative networks. The principal mechanism to enable thirdcountry researchers to spend time in Europe is the Marie Curie fellowships. But the numbers of applicants and fellowships awarded to countries such as China and India remains pitifully low. From 2002 to 2006, over the period of FP6, only 87 Marie Curie fellows came to Europe from China, India and Korea, an average of fewer than 18 per year. And over the same period, fewer than three Marie Curie fellows per year were sent from Europe to third countries other than the US, Canada and Australia.53 A more targeted approach should be developed, with a particular share of Marie Curie fellowships allocated to key partner countries, and better promotion of these opportunities within those countries. At the same time, we need to send more European scientific talent to Asia to support two-way flows of people and ideas. This will rely on improving general awareness of Chinese and Indian science and culture among students in the EU. Governments should encourage more schools to hire Chinese teachers and teaching assistants, and invest more in Asian studies at university. European countries should compete to become the ‘hosts with the most’ – the convenor of the world’s best scientific conferences, the place where researchers feel most valued and where they receive the greatest recognition, in terms of both prestige and financial remuneration. Europe should also facilitate interactive online spaces where researchers can meet – an R&D community equivalent of MySpace or Facebook – perhaps building on the EU’s existing SINAPSE network.

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3. Build the knowledge banks A Chinese material scientist may next year produce a revolutionary type of nanomaterial. An Indian biochemist may come up with a blockbuster diabetes drug. Korean software engineers may develop the protocols for the next generation internet. More science is going to come from more people in more places. And the results will not necessarily be published first in the mainstream international journals. The EU needs to invest more in understanding this new geography of science and innovation, and in gathering and distributing that information more effectively. Policy-makers will be able to make sensible decisions about where and who to collaborate with only through better mapping of bibliometrics, patents and student numbers, and softer factors such as research cultures, ethics and governance. Collaborative strategies can then be tailored to the individual and complementary strengths of particular countries. For example, the focus in India might be more heavily on biotechnology and pharmaceuticals, and in China on energy, climate change and novel materials. The European Commission’s delegations have slowly been taking on a more proactive role in fostering links with the scientific and research communities of third countries. But there is scope for greater resources to be invested in these activities. A sensitive question that must be addressed is the balance of investment and effort that individual EU member states devote to bilateral research links, and the amount of effort that is directed through the Commission and other EU institutions. The Commission’s delegations in China and India each have just one science counsellor; its delegation in South Korea has none. By contrast, several EU member states have large teams of science counsellors and advisers working in these countries. Does this balance serve Europe’s long-term interest? Or does it encourage third countries to play off individual EU states against one another, and against larger partners such as the US?

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4. Lead global science towards global goals Europe should stand up for science’s contribution to an alternative narrative of globalisation: one that is not just about global markets and brands, but also about using global knowledge to address shared environmental and social challenges. The global innovation networks now being created by multinational companies need public counterparts: knowledge banks and research programmes that serve the global public interest. Europe already has some large collaborative enterprises to build on, such as ITER and Galileo. The same model should be adapted for a small number of critical science-based challenges, for example in low-carbon energy, sustainable transport or the prevention of new pandemic diseases. Above all, Europe needs an approach to innovation that is not just about the scientific elite, the trendy creative class or entrepreneurial superheroes, but which recognises the contribution that everyone can make as consumers, citizens and creators. And this message must be cast in terms of cosmopolitan innovation: Europe as a place that is open to the world’s best ideas, and which will support anyone from anywhere to put those ideas into practice.

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4 5 6 7 8 9 10 11 12

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Facing the Challenge: The Lisbon strategy for growth and employment, Report of the High Level Group chaired by Wim Kok (Brussels: European Commission, Nov 2004). Creating an Innovative Europe: Report of the Independent Expert Group on R&D and Innovation appointed following the Hampton Court Summit and chaired by Mr Esko Aho (Brussels: European Commission, Jan 2006). European Commission Communication, More Research and Innovation – Investing for growth and employment: a common approach (Brussels: COM (2005) 488, 2005), see http://europa.eu/invest-inresearch/pdf/download_en/comm_native_com_2005_0488_4_en_acte.pdf (accessed 14 Apr 2007). World Bank country fact sheet, ‘India: data, projects, and research’, see www.worldbank.org.in (accessed 25 Nov 2006). This chapter is an adapted extract from J Wilsdon and J Keeley, China: The next science superpower? (London: Demos, 2007). Organisation for Economic Co-operation and Development, ‘China will become the world’s second highest investor in R&D by end of 2006, finds OECD’, press release, 4 Dec 2006. R Minder, ‘Chinese poised to outstrip Europe on R&D’, Financial Times, 10 Oct 2005. People’s Republic of China State Council, Guidelines for the Medium and Long Term National Science and Technology Development Programme (2006–2020) (Beijing: PRC State Council, Feb 2006). Hu Jintao, speech, 9 Jan 2006. Although the plan itself has since been followed up with a detailed implementation strategy, published in June 2006. D Simon, Evidence to the US–China Economic and Security Review Commission, 21 Apr 2005. RP Suttmeier, Evidence to the US–China Economic and Security Review Commission, 21 Apr 2005.

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13 14 15 16 17 18 19 20 21

22 23 24 25

26

27 28 29 30 31

X Guanhua, ‘Regarding several big problems in independent innovation’, Keji Ribao, 6 Apr 2006. Interview with Ze Zhang, 26 May 2006. A Segal, presentation at a Tsinghua University innovation conference, May 2006. D Kang and A Segal, ‘The siren song of technonationalism’, Far Eastern Economic Review 169, no 2 (Mar 2006). J Watts, ‘China plans first space walk in 2007’, Guardian, 18 Oct 2005. Chinese Academy of Sciences, ‘Pool efforts to build up a national innovation system’, press release, 23 Jan 2006. Ministry of Science and Technology, ‘Shang Yong: China’s indigenous innovation strategy will boost world economy’, press release, 8 Aug 2006. National Academy of Sciences, Rising Above The Gathering Storm: Energizing and employing America for a brighter economic future (Washington DC: NAS, Oct 2005). For more on this point, see A Stirling, ‘The direction of innovation: a new research and policy agenda?’ (unpublished paper, 2005); and M Leach and I Scoones, The Slow Race: Making technology work for the poor (London: Demos, 2006). G de Jonquieres, ‘Lies, damn lies and China’s economic statistics’, Financial Times, 22 Nov 2005. This chapter is an adapted extract from K Bound, India: The uneven innovator (London: Demos, 2007). World Bank country fact sheet, ‘India: data, projects, and research’, see www.worldbank.org.in (accessed 25 Nov 2006). C Dahlman and A Utz, India and the Knowledge Economy: Leveraging strengths and opportunities (Washington, DC: World Bank, 2005); CIA World Factbook: https://www.cia.gov/cia/publications/factbook/index.html (accessed 25 Nov 2006). Goldman Sachs, ‘Dreaming With BRICS: The path to 2050’, Global Economics Paper No 99 (2003), available at www2.goldmansachs.com/insight/research/reports/report6.html (accessed 25 Nov 2006). R&D spending 1994/95 Rs 6622 Crores, R&D spending in 2004/05 Rs 21,639 Crores. Figures from National Science & Technology Management Information System (NSTMIS), available at www.nstmis-dst.org/ (accessed 28 Nov 2006). M Paranjape, ‘Science, spirituality and the creation of Indian modernity’, a paper prepared for ‘Continuity and change: perspectives on science and religion’, Philadelphia, PA, USA, 3–7 Jun 2006. S Visvanathan, ‘A celebration of difference: science and democracy in India’, Science 280, no 5360 (Apr 1998). C Raja Mohan, ‘India and the balance of power’, Foreign Affairs (Jul/Aug 2006). US National Science Foundation, Science and Engineering Indicators, 2006 (Arlington, VA: National Science Board, 2006), available at www.nsf.gov/statistics/seind06/ (accessed 25 Nov 2006).

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32 33 34 35 36 37 38

39

40 41

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Interview with Anil Ghosh, CEO Chemgen Pharma, Kolkata, Feb 2005. This chapter is an adapted extract from M Webb, Korea: Mass innovation comes of age (London: Demos, 2007). WS Hwang et al, ‘Patient-specific embryonic stem cells derived from human SCNT blastocysts’, Science 308 (17 Jun 2005); published online 19 May 2005; article has been retracted. From interview with The Council for the Korean Pact on Anti-Corruption and Transparency (K-PACT), 7 Mar 2006. S Hong, ‘Replication, scientific fraud, and STS’, prepared for the EASTS Conference on Dr Hwang’s Controversy in Korea, Taipei, Taiwan, on 4 Aug 2006. H Gottweis and R Triendl, ‘South Korean policy failure and the Hwang debacle’, Nature Biotechnology 24, no 2 (Feb 2006). Estimates vary: GDP per capita topped US$22,000 in 2006 according to the CIA World Factbook; US$17,908 in 2003 according to World Economic Forum (WEF); and gross national income (GNI) per capita was US$15,830 in 2005 according to the World Development Indicators (WDI), see http://devdata.worldbank.org/data-query/ (accessed 6 Dec 2006). These phases are extensively addressed by L Kim, Imitation to Innovation: The dynamics of Korea’s technological learning (Boston: Harvard Business School Press, 1997); L Kim and R Nelson (eds), Technology, Learning and Innovation: Experiences of newly industrializing economies (Cambridge: Cambridge University Press, 2000); Organisation for Economic Co-operation and Development, Korea’s Knowledge Economy (Paris: OECD, 2000); C Dahlman and T Andersson (eds), Korea and the Knowledge-based Economy: Making the transition (Paris and Washington, DC: OECD and World Bank Institute, 2002). Kim, Imitation to Innovation. The strategy relied heavily on the OECD ‘Knowledge for development’ (K4D) pillars of a knowledge economy. The G-7 projects (or HAN, Highly Advanced National projects) ran from 1992 to 2002 and were aimed at developing core technologies. A National Strategy for Information Industries was instituted in 1992. The 2001 Science and Technology Framework Law gives the Ministry of Science and Technology (MOST) a powerful coordinating role governing all science and technology (S&T) laws. In 2004, the minister was made a deputy prime minister, and the Office of Science and Technology Science and Technology Innovation (OSTI) was created to take on a coordinating role. Sources: Korea’s country response to OECD (2004) Science Technology and Industry Outlook questionnaire; W-Y Lee, ‘The role of science and technology policy in Korea’s industrial development’ in Kim and Nelson (eds), Technology, Learning and Innovation; and Korea Development Institute and World Bank Institute, ‘Overview’, Korea as a Knowledge Economy: Evolutionary process and lessons learned (Seoul and Washington, DC: KDI and WBI, 2006); see http://web.worldbank.org/WBSITE/EXTERNAL/WBI/WBIPROGRAMS/KFDL P/0,,contentMDK:21001813~menuPK:2792482~pagePK:64156158~piPK:6415 2884~theSitePK:461198,00.html (accessed 6 Dec 2006).

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43 44 45 46 47 48

49 50 51 52 53

‘S. Korea’s R&D spending reaches 2.99 pct of GDP in 2005’, Yonhap News, 16 Aug 2006, available at http://english.yna.co.kr/Engnews/20060816/460100000020060816155751E6.ht ml (accessed 1 Dec 2006). See in-cites, ‘Sci-Bytes: What’s new in research’, 6 Feb 2006, based on ‘ISI essential science indicators’, available at www.incites.com/research/2006/february_6_2006-1.html (accessed 1 Dec 2006). OECD, Compendium of Patent Statistics 2005 (Paris: OECD, 2005), available at www.wipo.int/ipstats/en/resources/ (accessed 1 Dec 2006). ‘South Korea plans its biotechnology future’, Biotechnology and Development Monitor 50 (Mar 2003). T Kim, ‘$450 mil. budget set for stem cell research’, Korea Times, 29 May 2006, available at http://times.hankooki.com/lpage/200605/ kt2006052917331610160.htm (accessed 1 Dec 2006). J-W Lee, ‘Overview of Nanotechnology in Korea – 10 years blueprint’, Journal of Nanoparticle Research 4 (2002). The Ministry of Science and Technology (MOST) reports that in 2003, the percentage of basic research to total R&D investment was 14.5%. In 2004, this percentage had grown to 20% and it is expected to grow to 25% by the end of 2007, putting it among the top ten nations that invest in basic science research. See MOST, Science and Technology in Korea: Past present future (Gwacheon City: Science and Technology Cooperation Bureau, MOST, 2005), see www.most.go.kr (accessed 2 Dec 2006). Research on Asia Group, ‘Korean mobile market forecast and carrier strategy 2003–2008’, IT Analysis, Jan 2006, available at www.itanalysis.com/research.php?code=RO-1700 (accessed 1 Dec 2006). JM Barroso, ‘An innovation-friendly, modern Europe’, European Technology Platforms seminar, Brussels, 6 Dec 2006. European Commission, The European Research Area: New perspectives, COM(2007) 161 Final (Brussels: EC, 4 Apr 2007). AL Saxenian, The New Argonauts: Regional advantage in a global economy (Cambridge, MA: Harvard University Press, 2006). We are grateful to Pierrick Fillon-Ashida and Barbara Rhode in DG Research for this data.

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