Debates about globalization are focused on offshore outsourcing of manufacturing and services. This approach, however, neglects an important change in the geography of knowledge—the globalization of innovation that results from an accelerated dispersion of scientific and technological knowledge and capabilities across geographic borders. The proliferation of corporate networks of production and research and development (R&D) is one important driver of this new form of globalization. Equally important are national innovation policies that seek to enhance economic growth and competitiveness.
Asia’s role, quite minor until recently, has become critical. Of particular importance is the resurgence of China as a leading production site and market for high-tech industries and as a new competitor in technology markets. In the United States (US), there are concerns that Asia’s new role in innovation, and especially China’s indigenous innovation policy, will threaten US leadership in science and technology and hence erode its long-term growth potential.
A fundamental objective of East-West Center research on innovation is to study how the globalization of innovation transforms economic relations between the US and Asia. Research examines how globalization of innovation interacts with national innovation policies both in the US and across Asia. The objective is to provide informed policy suggestions on how to minimize negative effects on economic growth and employment and on how to share the benefits of science, technology, and other innovation through enhanced US-Asian cooperation agreements.
This work focuses on three areas:
- China’s indigenous innovation policy and its impact on economic relations between China and the US
- Innovation capabilities and strategies of China-based high-tech firms
- Globalization of science and technology in information and communication technologies
China’s indigenous innovation policy and its impact on economic relations between China and the US
Funded by the US Department of Defense MINERVA Program, this project examines recent developments in China’s indigenous innovation policy and asks how serious a challenge China’s innovation push is for the United States. This is the first phase of a joint project on innovation in China conducted by the East-West Center and the University of California Institute of Global Conflict and Cooperation (IGCC).
Extensive interviews with key players in China’s innovation system are used to examine the tension between China’s top-down, neo-mercantilist, state-development capitalism and the surprisingly fragmented Chinese innovation system that includes diverse stakeholders with conflicting interests. Research focuses on major Chinese policies on intellectual property rights, government procurement, and the use of standardization as a tool of innovation policy. At the center of analysis is China’s fundamental challenge: How can China reconcile its primary objective of strengthening indigenous innovation with its leading role in international trade and its deep integration into global corporate networks of production and innovation?
Collaborating scholars
Dieter Ernst, Senior Fellow, East-West Center
Barry Naughton, Professor of Chinese Economy and Sokwanlok Chair of Chinese International Affairs, School of International Relations and Pacific Studies, University of California at San Diego
Wang Ping, Deputy Chief Engineer, China National Institute of Standardization (CNIS), Beijing
Yu Yang, Professor, School of WTO Research and Education, Shanghai Institute of Foreign Trade, Shanghai
Liang Zheng, Associate Professor and Director, Center for Innovation and Science and Technology Policy, School of Public Policy and Management, Tsinghua University, Beijing
Hou Junjun, Postdoctoral Scholar, China Institute for Science and Technology Policy, Tsinghua University, and Associate Professor, College of Economics and Trade, Hunan University
Key publications
Ernst, D. 2012. America’s voluntary standards system—A “best practice” model for innovation policy? East-West Center Working Paper, Economics Series 128.
Ernst, D. 2011. China’s innovation policy is a wake-up call for America.Asia Pacific Issues Paper 100. Honolulu: East-West Center.
Ernst, D. 2011. Indigenous innovation and globalization: The challenge for China's standardization strategy. La Jolla, CA: University of California Institute on Global Conflict and Cooperation and East-West Center, 123 pages. A Chinese translation has been published by the University of International Business and Economics Press in Beijing. This is a joint publication of the East-West Center and the Shanghai Institute of Foreign Trade.
Ernst, D. 2011. Toward greater pragmatism? China’s approach to innovation and standardization. IGCC Policy Brief 18. San Diego, CA: University of California, Institute on Global Conflict and Cooperation..
Ernst, D. 2011. Written testimony to the U.S.-China Economic and Security Review Commission hearing on China’s Five-Year Plan, indigenous innovation, and technology transfers and outsourcing. In U.S.-China Economic and Security Review Commission. China’s Five Year Plan, Indigenous innovation and technology transfers and outsourcing, pp. 50-68.
Ernst, D., and S. Martin. 2010. The common criteria for information technology security evaluation—implications for China’s policy on information security standards. East-West Center Working Paper, Economics Series 108. Honolulu: East-West Center.
Innovation capabilities and strategies of high-tech firms in China and Taiwan
Funded by the US Department of Defense MINERVA Program, this research examines how China-based high-tech firms (both domestic and foreign) develop their innovation capabilities and analyzes key features of their innovation strategies. This is the second phase of a joint China innovation project conducted by the East-West Center and the University of California Institute of Global Conflict and Cooperation (IGCC).
To capture China’s corporate innovation capabilities across the innovation value chain, research focuses on integrated-circuit design companies and leading electronic-equipment producers, who are the main customers of companies that design integrated circuits. These two types of company depend heavily on knowledge sharing and hence provide useful insights into China’s integration into domestic, regional, and global innovation networks.
The project combines desk research on key indicators of China’s evolving innovation capabilities; field research in China and Taiwan conducted with Barry Naughton and a team of researchers from the US, China; and Taiwan; and a detailed analysis of patent data conducted with Cambridge IP, a leading provider of patent data analysis.
Collaborating scholars
Dieter Ernst, Senior Fellow, East-West Center
Barry Naughton, Professor of Chinese Economy and Sokwanlok Chair of Chinese International Affairs, School of International Relations and Pacific Studies, University of California at San Diego
In China
Liang Zheng, Associate Professor and Director, Center for Innovation and Science and Technology Policy, School of Public Policy and Management, Tsinghua University, Beijing
Hou Junjun, Postdoctoral Scholar, China Institute for Science and Technology Policy, Tsinghua University, and Associate Professor, College of Economics and Trade, Hunan University
In Taiwan
Shin-Horng Chen, Professor and Director, International Division, Chung-Hua Institution for Economic Research (CIER), Taipei
Tain-Jy Chen, Professor, National Taiwan University, Taipei
Momoko Kawakami, Visiting Scholar, Academia Sinica, Taipei, and Research Fellow, Institute of Developing Economies, Tokyo, Japan
Jui-Lin Yang, Manager, Industrial Economics and Knowledge Center (IEK), Industrial Technology Research Institute (ITRI), Hsinchu Science Park
Key publications
Ernst, D. Forthcoming. Industrial upgrading through low-cost and fast innovation—Taiwan’s experience. East-West Center Working Papers, Economics Series. Honolulu: East-West Center.
Ernst, D., and B. Naughton. 2012. Global technology sourcing and China’s integrated circuit design industry: A conceptual framework and preliminary research findings. East-West Center Working Papers, Economics Series, No. 131. Honolulu: East-West Center.
Ernst, D. 2008. Can Chinese IT firms develop innovative capabilities within global knowledge networks? In Marguerite Gong Hancock, Henry S.Rowen, and Willliam F. Miller, eds. Greater China's quest for innovation. Palo Alto, CA: Shorenstein Asia Pacific Research Center, Stanford University.
Ernst, D., and B. Naughton. 2008. China's emerging industrial economy—insights from the IT industry. In C. McNally, ed. China's emergent political economy—capitalism in the dragon's lair. London: Routledge.
Ernst, D. 2007. Beyond the global factory model: Innovative capabilities for upgrading China's IT industry. International Journal of Technology and Globalization 3(4): 437–60.
Globalization of science and technology in information and communication industries
This project explores how the globalization of science and technology affects US leadership in information and communication technologies. Research examines worldwide global research and development (R&D) capabilities and competitiveness indicators across key information and communication industries and compares different innovation strategies and policies in economies (especially China, Taiwan, South Korea, and the European Union) that are potentially important players in the development of information and communication devices, technologies, and products.
An important objective is to conduct in-depth research on the indicators, drivers, and impacts of the globalization of science and technology in information-technology industries, with a focus on semiconductors and telecommunications. Questionnaire surveys and interviews with companies and government agencies in the US, China, Taiwan, South Korea, and the European Union will help to identify emerging innovation approaches and shifts in competitive advantages..
The project owes much to discussions with the Institute for Defense Analyses (IDA) Science and Technology Policy Institute (STPI) (especially Stephanie S. Shipp); with Susan Helper and her collaborators with the manufacturing studies team at the Weatherhead School of Management, Case Western Reserve University and the Brookings Institution; with Paul A. Lengerman and David Byrne, senior economists at the Federal Reserve Board; with Willy Shih, Professor of Management Practice, Harvard Business School; and with William Lazonick, Director, Center for Industrial Competitiveness, University of Massachusetts Lowell.
Dieter Ernst, the project director, is currently serving on a US National Academies’ Committee on Global Approaches to Advanced Computing. The committee is sponsored by the Assistant Secretary of Defense for Research and Engineering at the Department of Defense through the Board on Global Science and Technology of the National Research Council/National Academies. This committee has been tasked to describe and assess the global science and technology landscape in response to the challenge of sustaining historical trends in computing performance improvement including, in particular, the shift to multicore processors in particular. For more information, visit www.nas.edu/bgst.
Key publications
Ernst, Dieter. Forthcoming. Industrial innovation and employment—reflections on America’s advanced manufacturing partnership (AMP) strategy. East-West Center Working Papers, Economics Series. Honolulu: East-West Center.
Ernst, Dieter. 2012. High road or race to the bottom? America's advanced manufacturing partnership (AMP) strategy—objectives, drivers, and implications for international co-development. Paper to be presented at the University of Chicago/MIT/Copenhagen Business School INCODE Conference on Industrial Co-Development with China, 24–25 September 2012.
Ernst, Dieter. 2012. America’s voluntary standards system—A “best practice” model for innovation policy? East-West Center Working Papers, Economics Series, No. 128. Honolulu: East-West Center.
