Government must invest in skills and innovation n Childhood trauma triggers social exclusion n Risks of fatigue n
Raising security standards n Emergency exercises n Families short on information n
NEWS
Government must invest in skills and innovation
INNOVATIVE ACTIVITIES IN China are growing at an astounding rate fuelling widespread concerns over Western economies’ ability to maintain their dominance in knowledge creation and high-skill employment. New research on innovation and globalisation indicates that the UK could actually benefit from these developments, but that this will require investing in the necessary skills and innovative capacity. “There is a barrage of statistics highlighting China’s unprecedented recent investment in skills and science and the resulting rapid growth in innovative outputs,” says researcher Helen Miller. The proportion of Chinese national income invested in R&D (1.1 per cent) is now comparable to that in the UK (1.15 per cent). At the same time, large investments in education have produced a proliferation of Chinese graduates, almost half of whom study for science and engineering degrees. This investment in research capacity has been translated into equally impressive growth in innovative outputs. For example, if current trends continue, China could become the world’s largest filer of patent applications by 2015. Such trends raise concerns, not least when recent work for the
European Commission concluded that if the recent trends in R&D continue then ‘in 2025, the United States and Europe will have lost their scientific and technological supremacy for the benefit of Asia’. “But innovation is not a zero-sum game; the success of China need not
“
The challenge for Western governments is not to devise policies to deter investment in China or other emerging economies, but to ensure they make sufficient investments in their own economies to remain leaders in innovation. Yet while China continues to make unprecedented
The current economic climate should
not prevent investment in our capacity for economic growth in the future
be at the expense of the West,” argues Ms Miller. There are many reasons why these trends are not necessarily bad news for the West. Firms locating activity in China, whether to adapt products to local markets or gain access to specific skilled workers at a lower cost, can lead to standard gains from trade where firms experience improved performance and may transmit knowledge back home. Certainly, there is evidence that knowledge flows across national borders and this is less restricted by distance than was the case 20 years ago. That more research is being carried out in China does not necessarily imply that less will be undertaken in the West. China also represents a new market for technologies developed in the West.
investments in research capacity and increased incentives for firms to invest in innovation, the UK is making real cuts to budgets. “Being able to compete with China
”
in ten years’ time requires investment in skills and research today,” Helen Miller insists. “The current economic climate should not prevent investment in our capacity for economic growth in the future. The impact of China’s rise will depend largely on whether we are with them at the technology frontier or onlookers from the sidelines.” n
i Contact Helen Miller, Institute for Fiscal Studies
Email
helen.miller@
ifs.ac.uk Telephone 0207 291 4800 ESRC Grant Number RES-180-25-0003 - Targeted Initiative on Innovation Programme
AUTUMN 2011 SOCIETY NOW 3 NEWS
Anti-terrorism measures undermine citizenship n Leaner start-ups do better n Schools failing sickle cell pupils n Materialist values linked to lower wellbeing n Making the best better n Dependable innovation n
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