measuring the u.s.-china innovation gap: initial findings of the ucsd-tsinghua innovation metrics...
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Measuring the U.S.-China Innovation Gap:
Initial Findings of the UCSD-Tsinghua Innovation Metrics Survey Project
Peter Cowhey Tai Ming Cheung
with Eric Anderson
July 9, 2013
Current Innovation Metrics Mismeasure Actual Innovation
• Most common metrics are inputs and acAviAes, not outputs (R&D expenditures, patent output, number of STEM graduates, journal citaAons)
• Magnitude of impact innovaAon inputs have on commercial innovaAon varies across industries
Innovation Activities
Innovation Outputs
Innovation Environment
New Survey to Measure U.S.-China Innovation
• For each industry, survey answers: – What is the gap in innovaAon between the United States and China?
– At what rate is Chinese innovaAon catching up to the United States?
• Includes quesAons on innovaAon environment – DomesAc/internaAonal financing and talent, government regulaAon, collaboraAon, geography
Survey Demographics • Web-‐based survey administered from May-‐June 2013 • Received 68 U.S. responses; 23 China responses • China sample less IC design experience than U.S. sample
– China average 9 years; U.S. average 22 years
Correcting for Cross-Country Differences
• Concern that US and China sample may approach term “innovaAon” with different concepts and definiAons
• Created scenarios depicAng varying levels of innovaAon to correct for bias
• This report only uses respondents’ assessments of their own country
Methodology used: h_p://gking.harvard.edu/files/gking/files/vign.pdf
Survey Results: Innovation Level
• AcAviAes of 5 most leading-‐edge IC design teams – 67% of US experts rate US innovaAon high – 81% of Chinese experts rate China innovaAon low
Chinese Experts’ Assessment of China’s Innovation Gap
• China’s most innovaAve IC design teams: – Average 49 months to current fronAer – Average 57 months to advancing fronAer – 35 percent of Chinese experts say China will never catch up
U.S. Experts’ Views of Innovation Gap
“China will catch up in about 4 years Ame. There is nothing that moves fast enough in most IC design spaces that is so unique that it can’t be overcome, as long has you have enough money to pour into it.”
-‐-‐Execu've Vice President of Engineering, Fabless Semiconductor Company
“The duraAon of IC design development depends on the number of engineers ‘thrown’ at a problem. Owing to costs, companies in India/China can reduce cycle Ames if they perceive it is needed.”
-‐-‐Associate Professor, Integrated Circuits
Survey Results: Innovation Obstacles
• U.S. three largest obstacles: venture capital, qualified talent, foreign compeAAon
• China three largest obstacles: weak IP protecAon, qualified talent, lack of high-‐quality IP
Survey Results: Government Impact
• Chinese view industrial policy as posiAve, But only 22% rate it highly posiAve
• Both U.S. and China have balanced view of public services (i.e. tax and business administra'on, customs services, immigra'on processing, public infrastructure)
Conclusion: Policy Implication • Fair consensus that China is 4-‐5 years behind;
substanAal view that it will never catch up • Biggest problem for the Chinese, in their own view,
is intellectual property • China’s industrial policy is viewed as posiAve but not as
highly posiAve—not the crux of their compeAAve advantage
• Conclusion: Devote more resources to IP protecAon and fewer resources to subsidized R&D
• Need to extend survey to other sectors and conAnue to refine measurements
• Survey provides measure of innovaAon gap at leading edge, which may differ from gap at trailing edge
FYI: Limitations and Potential Mismeasurement
• Conceptual limits: – InnovaAon definiAon includes products and processes but excludes markeAng and organizaAonal methods
– Survey focuses on leading-‐edge innovaAon, capturing the fronAer but not measuring the whole industry
– InnovaAon inherently a dynamic concept—likely to vary within IC design subsectors
• Survey Response risks: – Low survey response rates of ~5% could mean non-‐representaAve sample
– Pretested quesAon wording but experts may sAll differ in interpretaAon (i.e. by subsectors)