Charles Kenny’s new Bloomberg Businessweek column contains the following observation:
China is churning out ever more science and technology graduates and climbing the global rankings in patent applications.
To Kenny’s credit, he goes on to offer a number of caveats regarding China’s scientific prowess. But I thought I’d share the following from Michael Beckley’s 2011 International Security article ”China’s Century?”
Today, China seems poised for scientific dominance, employing more scientists and engineers than any other country and tripling its share of world scientiªc articles over the last ten years (from 2 percent to 6 percent). Over the same time period, the United States’ share declined from 34 percent to 28 percent.
There are, however, reasons to question comparisons between imperial Germany and contemporary China. For starters, official Chinese statistics overstate the volume of China’s scientifc resources. Half of China’s “engineers” are auto mechanics or graduates of two-year vocational programs (zhuanke). In addition, data on China’s R&D spending are inflated because they are based on the real purchasing power of the Chinese yuan even though most research equipment is purchased on international markets. Nevertheless, the United States increased its lead in terms of R&D spending over the last twenty years (see figure 4), and still accounts for 50 percent of the world’s most highly cited scientific articles.
Over the next few decades, Chinese scientific research will increase significantly. In fact, it is the law: the Chinese government has decreed that, by 2020, R&D expenditures will constitute 2.5 percent of GDP and China will rank among the top five countries in terms of scientiªc article output. Topdown decrees and resource infusions, however, will not necessarily turn China into an innovation powerhouse. After all, imperial Germany coupled size with sophistication, producing not only many scientists but also world-class research. Evidence to date suggests China tends to prioritize the former at the expense of the latter. The rush to increase the quantity of Chinese scientists, for example, has reduced the quality of their education, as evidenced by sharp declines in teacher-student and funding-per-student ratios. Moreover, China’s determination to boost its article output has fostered “a Wild West climate where top researchers, under intense pressure to produce, are tempted to fake results or copy the works of others.” Chinese scientists are “preoccupied with quick outcomes and immediate returns,” and as a result, “quantitative gains in Chinese research productivity have not always been matched by qualitative gains.” According to a former Chinese biochemist turned whistleblower, “Misconduct is so widespread among Chinese academics that they have almost become used to it.” Indeed, a significant portion of new R&D spending has simply disappeared because China’s Ministry of Science and Technology lacks the capacity to monitor the ºood of new research grants. According to the most comprehensive study on Chinese scientiªc research, the result of all these deªciencies is that “much of the work coming out of Chinese laboratories and research institutes still tends to be not yet close to the cutting edge or to be derivative of what has been done elsewhere, with minor new contributions.”
In the late 1800s, German universities ranked among the best in the world and attracted talent from abroad.122 China, by contrast, currently suffers from a massive brain-drain problem. The number of Chinese students enrolled in universities in the United States increased by an average of 9 percent annually between 1996 and 2011 and 20 percent annually between 2007 and 2011. Declinists assume these students return to China after graduating and therefore “threaten U.S. technological leadership.” But 90 percent of the Chinese students who received a science or engineering Ph.D. from an American university between 1987 and 2007 joined the American workforce, and these students were typically China’s best and brightest.
Kenny’s basic point — that the U.S. should welcome work to remain a “magnet for global innovators” — is well taken. But some of the evidence he marshals to make his case strikes me as a bit odd, e.g.:
Duke University’s Vivek Wadhwa reports that the proportion of high-tech startups founded by Chinese and Indian immigrants in Silicon Valley dropped from 52 percent in 2005 to 44 percent in 2011, in part because more and more Indian and Chinese graduates of U.S. universities are returning home rather than dealing with the hassle of American immigration procedures. The U.S. is becoming less attractive to the very people who help power the U.S. innovation economy.
Wadhwa may well be right to suggest that the U.S. should be more willing to allow Indian and Chinese graduates of U.S. universities to remain in the country. But it is also true that a number of other things changed between 2005 and 2011, e.g., in the wake of the financial crisis, the relative attractiveness of high-tech entrepreneurship has increased, and so it seems plausible that a larger number of native-born Americans would be inclined to launch start-ups rather than work in financial services. That relative prestige would matter in this domain makes intuitive sense. During periods when working for elite financial services firms is particularly attractive, cultural insiders might choose to make use of their extensive social networks to join said firms. Cultural outsiders, in contrast, will be better served by striking out on their own. Once entrepreneurship starts looking like a better and relatively less risky option — that is, working in finance is not the sure bet it once was and working for a start-up looks more like a solid credential for future success — it will attract more risk-averse natives.
Of course, it could be that as Indians and Chinese are launching fewer start-ups, they’ve been replaced by French and Canadian immigrants. If you have Wadhwa’s data, let me know!