Thread by @Noahpinion

1/I'm bored, so here's a random thread about technological innovation in the U.S. and China.

China is not quite at the technological frontier (the point where there's no catch-up left and you have to invent new stuff). But it's getting close.

danwang.co/2019-letter/

2/In terms of raw numbers, China is coming on strong. China already publishes more papers than the U.S., though they haven't caught up in quality yet.

nature.com/articles/d4158…

3/China produces more engineers than the U.S. as well. Though again there is a quality gap, "quantity has a quality all its own."

weforum.org/agenda/2017/04…

4/In terms of industrial innovation, China is benefitting from the fact that so many tech industries are located in China. That provides hands-on experience that trains a whole generation of engineers to make continuous improvements.

danwang.co/how-technology…

5/Export controls on Huawei revealed that there are lots of key pockets of tech that China still doesn't have. But it also identified points of weakness, which the Chinese government will now try to correct. A tech Cold War will lead to a more balanced Chinese tech ecosystem.

6/But the real reason China might soon "overtake" the U.S. in technology and innovation is that the definition of what it means to be "ahead" may soon change.

7/These days we tend to think of "technology" and "innovation" as being about *consumer products*. Smartphones, social media, etc. Things that allow companies to make money in the market.

But what about *military* technology?

8/The ability to kick another country's ass in a war is very different from the ability to keep teenagers amused with pictures on little glowing screens.

During the World Wars, being "ahead" technological meant being ahead in the technologies of bellipotence.

9/During the Cold War, military and consumer tech got conflated, for several reasons, e.g.:

1. Being richer than the USSR let us outspend it

2. Consumer tech like computers had big military applications

10/Defense research created spillovers for the consumer economy, and the consumer economy created wealth that made it possible to fund lots of defense research.

bloomberg.com/opinion/articl…

11/After the Cold War, our brief "end of history" moment made us question whether one country being "ahead" of another in innovation even made sense as a concept.

After all, innovations in China boost living standards in the U.S. and vice versa, right??

12/But that unipolar moment is over. And the burst of Cold War defense research spending in the U.S. is also over.

13/And that brings us to China.

China's corporate system might not be quite as good at creating "fun tech" that global consumers love (with a few exceptions like TikTok). But they might be racing ahead in "mean tech".

14/Exhibit One: drones.

weforum.org/agenda/2018/09…

15/Exhibit Two: surveillance technology.

latimes.com/business/story…

16/Exhibit Three: missiles.

reuters.com/article/us-chi…

17/Of course, this wouldn't be the first time another country has reached parity with the U.S. in "mean tech". The USSR did.

But unlike the USSR, China also has the capacity to outspend the U.S. of it chooses to, thanks to its sheer size.

18/Saying that the U.S. is "ahead of China" in technology, just because "our" big consumer tech companies are more efficient at capturing monopoly rents than China's, may no longer be a meaningful statement.

19/The question of who is "ahead" in technology and innovation depends crucially on the question of what technology is *for*.

And China may win simply by playing a different game.

(end)