chinascientistChina spent an amazing $163bn on R&D last year. Even more amazing, thats  an 18% increase on the previous year.

The sheer size of the resources that China now devotes to R&D means that businesses in the west cannot afford to ignore rise of  China’s science-based industries.

A report by UK innovation outfit Nesta has looked at China’s growing scientific prowess and argues that while there are some weaknesses with respect to other countries, China is posed to emerge a true scientific superpower.

featurelarge_Chinas-absorptive-state-report-coverFor example,  if one looks at the quantity of scientific papers — a common proxy for research strength — then China will outstrip the US by around 2020, and perhaps even sooner.

Similar conclusions can be derived by looking at percentage budget increases or the size of the scientific workforce. However, none of this tells us much about the quality of China’s research effort.

China is often dismissed as being a “fast follower”, meaning its scientists and engineers rarely create anything truly innovative; they are more interesting in taking existing innovations and rapidly incorporating them into products that can be mass manufactured at the scale and price required by China’s huge domestic market, the argument goes.

Indeed,  China’s domestic smartphone manufacturers are a good example of this type of second-generation innovator.  They have a lot of success at home, but know consumers in the west are unlikely to be impressed by their  products, so they don’t focus on export market — at least not yet.

But this characteristic of Chinese innovaiton is not necessarily a failing.  The report argues that the quality and speed of Chinese firms’ capacity for incremental re-innovation is becoming an “important competitive asset.”

Indeed, when it comes to commercial innovation, Chinese companies are no slouches.  Over the last five years, an expanding tier of Chinese multinationals have become visible in global rankings of firm–level innovation. Both Baidu and Tencent appear in the top 50 of Forbes’ list of most innovative companies and Chinese telecoms equpment maker ZTE applied for more PCT patents than any other company in the world in 2012.

Businesses are responsible for almost three quarters of China’s R&D spend, but progress towards an enterprise–led innovation system has been inhibited by the slow pace of reform in state–owned enterprises.

The report was produced to coincide with the UK chancellor’s trip to China and so has an thinly-veiled brief to boost UK-Chinese scientific relations.

We will undoubtedly revisit the report at a later date, but here’s some factoids ideal for those moments when you are searching for a riposte to the question “Name me an area where Chinese science or technology is superior.”

  • China now has the world’s fastest supercomputer, the Tianhe-2. Its chips are made by Intel but it was Chinese expertise that brought them together.
  • Eight of the 12 new entrants to the top 20 list of patent filings for graphene come from China
  • Chinese scientists have developed the lightest material ever known, a kind of aerogel made with carbon nanotubes and graphene.
  • In just 14 years, China has gone from having just 1% of the world’s gene sequencing capability to having nearly 50%.