If Asia no longer leads economic growth, who will?

There was a stretch from about 1750 to 1932 when the Western nations, and their colonies, were the fastest growing nations on Earth. Since 1932, the fastest growing countries have been Asian. Is there any chance this 80 trend is coming to an end? There is some evidence that China has reached a point where it would need vast political and cultural change to continue with its growth. It is possible that India will emerge as the great new growth power, in which case the world’s growth engine will stay in Asia.

Chinese research and development spending has been growing rapidly, as one would expect, and it is now the second biggest spender in the world, with an estimated 13.2% share in 2011. But its R&D spending was half that of the EU’s combined $330 billion, and a little more than a third of US spending.

It is good at incremental process innovation, patent registrations and so on, but it lags behind key advanced economies when it comes to the ‘know-how’ embedded in product innovation, management organisation, and the fusion of new information, biological, and materials technologies.

Well-publicised patent filings and scientific publications, hailed by many as proof of China’s growing prowess in scientific and technological innovation, are perhaps misleading. According to Thomson Reuters, China is indeed already the world leader in patent application volume, and second only to the US in published scientific papers, which it could overtake in 2013. According to the US Patent and Trademark Office, China registered 1655 patents in the US in 2009, compared with just 90 in 1999.

But this is a bit like saying that the loudest growls on the Formula One starting grid belong to the fastest racing cars. In reality, China lags a long way behind the US and many European countries, when it comes to cited patents, and to the filing of patents globally. Less than 6% of Chinese patents are protected by global patents, compared to 49% for the US, and nearly 40% for Japan, and China scores far less well than the US or Europe in terms of the number of publications per head published in top scientific journals, according to Thomson Reuters’ Essential Science Indicators20.

Further, China produces 0.54 papers per head, compared to 10 or more in the US, Germany and much of Western Europe, and Chinese scientific papers received less than 6 citations per paper, compared to 10-15 in the US, Europe and Japan. Chinese scientists and engineers are reportedly given lucrative incentives to publish, but this results in a surfeit of quantity over quality, and alleged widespread plagiarism, and data duplication and possible falsification21.