USA Losing Its Innovation Edge, China Rising

Test and Measurement World is looking at the innovators of the world and finds that China is rising.

China has a reputation as a production powerhouse but generally doesn’t get much respect as a source of innovation, despite efforts to change that. Now, those efforts may be paying off, according to the Economist Intelligence Unit, which reports that China is climbing up the world innovation rankings faster than other countries.

“Since the Economist Intelligence Unit first published its global innovation index two years ago, China has moved up from 59th to 54th in the rankings—an improvement we thought would take five years has been achieved in just two,” the organization reports.

However, China at number 54 in the rankings is no match for the USA at number three/four. However all is not peaches and cream. The US has dropped from number three in 2006 to tied for number three/four in 2008. And who has moved into a tie with the US? Finland. In the point ranking system used Japan is 10.00, Switzerland is 9.71, Finland is 9.50, and the USA is also 9.50.

The news is not all bad. The USA moved its rating up from 9.48 in 2006 to 9.50 in 2008. However, Finland improved even more. From 9.43 to 9.50 between 2006 and 2008. Which means we in the USA must try harder. Now of course to some extent the rankings are arbitrary. Even so, with Japan at 10.00 there is considerable room for improvement. And according to the report [pdf] the future is not so bright.

The slippage of the US confirms the gradual erosion in recent years of the country’s traditional position as the world’s technological leader — a trend we expect to continue. To some extent, the erosion in the US’s position reflects the fact that other countries are catching up. But it is also a result of the weakening US innovation environment—and this is likely to be accentuated by the current economic crisis.

I have noted earlier that Obama's attacks on venture capital are not helping. And neither is the Sarbanes-Oxley Law's hindrance of innovation. Mr. President and Congress, are you listening?

You can read how the report by Cisco was done by following the links at the Economist.

Cross Posted at Classical Values