Will China come to dominate global high-tech innovation?

In the future, perhaps. Today, however, Greater China—Mainland China, Taiwan, and Hong Kong—is focused on the quest for innovation. The dominant paradigm on the Mainland is one of execution, not innovation. Beijing now aims to turn China—historically an adopter of technologies from elsewhere—into a major technology creator. Self-reliance has become the government’s watchword and its ultimate goal.

The talents and resources available are impressive. More Chinese young people are well-educated, international patents and research and development (R&D) spending are on the rise, and China boasts a growing presence in world scientific literature.

Still, negatives remain. ... Read moreChina must overcome the legacies of a top-down, state-run research system that is largely disconnected from commerce, and an academic system not always supportive of independent scholarly inquiry. The government is working to change these outdated institutions, but such shifts do not occur overnight.

Taiwan and Hong Kong have followed different paths to high-tech innovation. Taiwan’s route has been dominated by government but implemented by mostly small- and medium-sized firms, with help from its Industrial Technology Research Institute (ITRI), a model for moving concepts to commerce. Significantly, Taiwan’s companies maintain strong links to multinational firms both in the United States and in Mainland China. Taiwan’s Hsinchu Science-based Park is seen as a model high-tech cluster throughout Asia and beyond.

Hong Kong has taken another road. While its formal R&D activity is small, it innovates in business models, particularly in logistics chains that reach into the Mainland and globally. It is a (largely unheralded) story of great success.

The big question is: When will Greater China’s high-tech innovation have a major impact on the world economy?