This column examines the effects of Chinese import competition on another metric for the health of the US manufacturing sector - innovation. Firms whose industries were exposed to a greater surge of Chinese import competition from 1991 to 2007 experienced a significant decline in their patent output as well as their R&D expenditures. While politicians’ ‘obsession’ with manufacturing is primarily due to job losses, an accompanying reduction in innovation may well affect economic growth in the longer term.
What the Third Offset and its predecessors have done well is identify the strategic imperative for securing a new competitive operational edge through technology. This signaling is critical. It can reassure our allies and deter our adversaries by demonstrating the reliability of future U.S. military dominance. For innovators - whether they are government insiders, denizens of traditional and nontraditional defense industry, or other potential partners - it can serve as a clarion call for bold ideas.
By the early 2020s, rivalry for industrial innovation will accelerate between the U.S. and China. Ironically, the Trump White House has opted for a poor-economy industrial policy, whereas China has a rich-economy policy. The former seeks past glory; the latter cannot wait to get to the future.
NASA has selected 133 proposals from U.S. companies to conduct research and develop technologies that will enable NASA's future missions into deep space and benefit the U.S. economy. The proposals, valued at approximately $100 million total for contract negotiations, were selected under Phase II of NASA's Small Business Innovation Research (SBIR) program.
Tesla CEO Elon Musk is the most innovative tech leader in the world, with Apple head Tim Cook earning the top score among U.S.-based respondents, according to a recent survey of 800 executives around the world. Global tech industry leaders identified Musk as the most innovative leader of a tech company in the new report out from audit firm KPMG.
Innovation Leaders has released its annual report detailing companies across 25 different sectors worldwide that accomplish the most from innovative activities. This year, Innovation Leaders highlighted three trends in its analysis: US dominance, partnerships and collaboration, and the impact of big bets and bold moves to deliver tangible, sustained growth.
SpaceX recently announced that two private citizens have paid money to be sent around the Moon in what would mark the farthest humans have ever traveled to deep space since the 1970s. In a sector where entrepreneurs often speak of "moonshots," Musk is one of the biggest dreamers.
The competitiveness of the U.S. economy depends on technological progress, but recent data suggests that innovation is getting harder and the pace of growth is slowing down. A major challenge in business and policy spheres is to understand the environments that are most conducive to innovation. One way to do that is to look to history.
As tech innovations unfold, China is stacking up to the United States as a leading force. Global tech industry leaders indicated, in KPMG’s tech innovation survey, the United States and China are the world’s dominant tech epicenters with the greatest potential to develop disruptive technology breakthroughs that will have a global impact. The strong showing for these two mega-powers is relatively consistent with earlier KPMG surveys, although this year’s poll reflects a slight uptick for China—25 percent compared with 23 percent the prior year.
Though other countries have made significant strides in innovation development, the U.S. and China continue as the most promising markets for technology breakthroughs that have global impact, according to KPMG's 2017 global technology innovation report. Given their country ranking, it's not surprising that cities in the U.S. and China are expected to make up six of the Top 10 innovation hubs, outside of Silicon Valley/San Francisco, over the next four years.