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This chapter is from the book

The Creativity Gap: Asia's Challenge to Achieve Qualitative Parity with the West

Until now, Western economic preeminence has been based on dominance in the science-based high-technology sectors, all of which depend on creativity and innovation. The OECD defines five industrial sectors as high-technology sectors: aerospace, pharmaceuticals, computer and office machinery, communications equipment, and scientific instruments (medical, precision, and optical). In high-tech manufacturing in the last decade, the battle for dominance has been between the United States, with a domestic value-add of just more than $500 billion, and Asia, whose share in 2003 was just less than $400 billion. At slightly more than $200 billion, the EU-15 share has not been growing significantly since 1999. During that period, whereas Japan's performance has been static (at around $140 billion), China's share has soared (to nearly $120 billion); South Korea and Taiwan have achieved more modest growth. When we look at high-technology exports, Asia is the world leader, with a global share of 43%; the EU-15 follows, at about 33%, and the United States comes in third, with less than 20%. Asian economies have clearly broken into high-technology manufacturing and have become leading exporters. But a lot of the value-add embodied in those exports still comes from the United States.

In the critical area of exporting high-technology services, a different picture emerges. In this field, the United States has pulled ahead of both the EU-15 and Asia. Notwithstanding the Indian success in IT outsourcing, by 2003, India's share of global revenues from high-tech services was barely 1% (despite more than tripling since 1990). Asian nations are still in an early stage in the high-tech services business. In 2003, U.S. revenues in that field were more than $5 billion; those of the EU-15 were $4.5 billion. Asia managed $2.5 billion, with about 60% coming from Japan. In 2003, U.S. receipts from tech licensing (or franchising) transactions—a typical form of trade in IP—with Asia was five times the amount of similar U.S. payments to Asia (again, most of these payments went to Japan).32

As noted earlier, Asian S&E publications have grown rapidly, and the Asians have displaced the Europeans in terms of quantitative output. However, when it comes to measures of publication quality, such as citations, Asian progress has been much slower (see Figure 1-9). In terms of article citations in science and engineering, the United States is still the undisputed leader and the EU-15 is in second place. Articles by Asian authors are less frequently cited than those by U.S. and European authors, and this gap does not appear to be closing. Japan accounts for the bulk of Asian citations, but China, Singapore, South Korea, and Taiwan are making the most rapid progress; India has remained flat, and other Asian nations are making only minor contributions.

Figure 1-9

Figure 1-9 Number of citations of science and engineering articles for the United States, the European Union, and Asia, 1992–2003

Source: National Science Foundation; available at www.nsf.gov

Apart from Japan, Asia has a similar quality problem with patents. In the case of U.S. patents granted in 2003, 90,000 of them were granted to U.S. residents and approximately 30,000 were granted to residents of the EU-15. As shown in Figure 1-10, Asian residents took about 45,000 U.S. patents, but about two-thirds of those patents were granted to residents of Japan.

Figure 1-10

Figure 1-10 Number of U.S. patents granted, by region and country of residence of inventor, 1990–2003

Source: National Science Foundation; available at www.nsf.gov

An even more important measure of the value of a patent is seeing it granted simultaneously in the United States, the European Union, and Japan. Such "triadic" patents are the true elite. The United States share of such patents in 2003 stood at about 35%, and that of the EU was about 33%. Asia had slightly less than 30% of these triadic patent families; not only was its share declining, but more than 90% of the triadic patents went to the Japanese.

What about core healthcare innovation skills in leading Asian nations? They have been growing and improving rapidly, but capability gaps in key areas are still a problem. For example, India has significant shortages of principal investigators, experienced biologists, and medical device specialists. This affects the quality of patient recruitment and quality of data in clinical trials and constrains expansion into the biologics and medical device industries. The training of clinical research associates is low, forcing companies to train internally. The country also faces shortages of biostatisticians, epidemiologists, and toxicologists, again constraining the ability of pharma companies to conduct research and increasing some costs.33 As a result of those deficiencies, companies operating in India have been forced to create education consortia or even establish new universities to improve the supply and quality of talent. Other emerging economies face this problem as well.

Asian education systems have been improving, and, as already stated, the numbers of scientists and engineering graduates are increasing at impressive rates. Yet in terms of the quality of both universities and engineering schools, Asia is still a considerable distance behind the West, as indicated by rankings in Tables 1-2, 1-3, and 1-4.

Table 1-2. Number of World Universities Ranking in Top 100 As of 2008, by Country and Region34


Number of Universities in Top 100

United States




Asia Pacific (excluding Japan)




Table 1-3. Number of Science and Engineering Universities from Japan, the United States, and Europe Among the Top 200 in 2007–200835


Number of Science and Engineering Universities in Top 200





United States


Table 1-4. Non-Japanese Asian Polytechnics36


National University of Singapore (NUS)


Tsinghua University, China


Nanyang Technological University, Singapore


Korea Advanced Institute of Science and Technology


Indian Institute of Technology Bombay (IITB)


Indian Institute of Technology Delhi (IITD)


Seoul National University


Shanghai Jiao Tong University, China


University of Science and Technology of China


National Taiwan University


University of Hong Kong


Chinese University of Hong Kong


Fudan University, China


Peking University


Nanjing University, China


City University of Hong Kong


Chulalongkorn University, Thailand


Pohang University of Science and Technology, South Korea

Asian and other emerging economy universities will need considerable time to achieve parity with leading Western universities and research centers. Notwithstanding the Chinese achievements in technology, China's educational system, which used to be based on rote learning and respect for authority, has been evolving and has started encouraging individual creativity. Partial evidence from the OECD PISA survey (OECD, Pisa 2009 Database) suggests that Chinese education is indeed improving rapidly. In the 2009 results of the "What Students Know and Can Do" comparative international surveys, Shanghai, China emerged in first place worldwide, well ahead of the OECD average. Chinese students' scores on such dimensions as "integrate and interpret" and "reflect and evaluate" were not only among the highest in the world, but were also higher than in the "access and retrieve" dimension. At least in the Shanghai area, a comprehensive approach has successfully replaced pure rote learning. In terms of Nobel prizes in science, Asia is still far behind the West (see Table 1-5).

Table 1-5. Number of Nobel Prize–Winning Scientists during the Last 20 Years, by Country and Region37


Number of Nobel Prize–Winning Scientists During the Last 20 Years

United States




Asia Pacific (excluding Japan)




Chinese and other Asian governments are aware of the need to foster greater creativity in basic scientific research. For The Chinese Academy of Science, for instance, creating conditions leading to the winning of Nobel prizes in science by Chinese is now a key strategic objective. Singapore and Korea have successfully upgrading the quality of their universities. The West, with its traditions of political freedom, individualism, critical thinking, and tolerance, still has the advantage in this crucial area of blue-sky creativity—but for how long?

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