Davos Notebook

Can Europe rise to the China challenge?

By Guest Contributor
January 27, 2011

– Dirk Jan van den Berg is President of Delft University of Technology, former chairman of the IDEA League of European Universities, and former Dutch ambassador to China and the UN. –

USA-CHINA/This year’s World Economic Forum comes at a moment in which a profound shift in global power from West to East is becoming unmistakable. In recent weeks, for instance, during Hu Jintao’s state visit to the U.S., China was unambiguously portrayed by the Obama administration as an equal, indispensable global partner with the United States.

One of the key achievements of the state visit was the historic extension to the US-China Agreement on Cooperation in Science and Technology, first signed by the two countries after relations were normalised in 1979. The agreement, which includes over 30 active protocols covering cooperation in areas ranging from agricultural science, renewable energy, and biomedical research, will thus continue to serve as a key framework driving bilateral economic growth well into the twenty first century.

Many European delegates at Davos will be struck by the contrast between the strong US emphasis given to technological cooperation with China, and the apparent attitude of Europe’s political leaders. Despite endless debate, little of concrete action has been achieved by Europe to seize what should be a very meaningful bilateral science and technology partnership with China, and address the fact that the European continent’s future as a world-leading innovation hub is already gravely challenged by the rise of the East.

For Europe, the time for talking is now over. The continent must act urgently if it is to retain its economic prosperity by ‘locking-in’ much greater science and technology-led business collaboration with China. But will Europe’s leaders finally seize the moment?

With Davos underway for another year, the omens are not looking good. With policy at a roadblock in many European capitals, and much initiative focused upon national rather than international issues, the continent is at an effective standstill except for momentum generated by Brussels, especially through the EU’s 2020 initiative.

To be sure, Europe retains many longstanding strengths, including exceptionally high quality of research; ability to work in interdisciplinary fashion (which makes research increasingly effective); and a very successful international corporate sector. Nonetheless, it is no exaggeration to say that the continent is currently facing an “innovation emergency” as Máire Geoghegan-Quinn, European Commissioner for Research, Innovation and Science, asserted last October.

This situation is a tragedy as, right now, a ‘one-time-only’ opportunity is arising to move EU-China scientific and technological ties on to a different level. However, this window will perhaps last only a few years before China’s innovation system approaches, and probably overtakes, that of Europe.

Seizing this historic opportunity, while there still exists strong mutual bilateral interest, requires a fundamental shift in the scale of European thinking and effort. And a good starting point in this journey would be the negotiation of a groundbreaking European equivalent to the successful US-China Agreement on Cooperation in Science and Technology which has served those two nations so well.

Understanding the fleeting nature of the window of opportunity for Europe requires an appreciation of the rapidity of China’s emergence as a science and technology superpower. The Chinese juggernaut is spending some 1.5 percent of GDP on R&D, twice the rate ten years ago, and may reach the US figure of approximately 2.5 percent by 2020 (the EU average is now about 1.8 percent). It has also quickly become the world’s second largest producer of scientific knowledge, as measured by the number of research publications.

To be sure, China’s overall scientific position right now is sometimes exaggerated. Concerns rightly persist, for instance, about whether its educational system sufficiently encourages individual creativity (often key in forging scientific breakthroughs), lack of systems thinking, and whether Chinese enterprises are capable of absorbing so much research.

Such issues mean the scale of China’s future achievement is uncertain. But, it is indisputable that we are witnessing the dawn of a new science and technology world order, a subject that will no doubt be a major topic of discussion amongst delegates at Davos.

The resulting diffusion of scientific expertise is helping create a globalised commons of knowledge which China’s millions of scientists and engineers are well placed to tap into. This transformation is, in turn, catalysing a more collaborative, trans-border model of cooperation which will redefine the R&D world of the 21st century.

Already in China there are some 1,200 foreign R&D centres. The key opportunity here for China is to continue moving up the R&D value chain. Its firms will become innovation powerhouses and rivals to European counterparts.

As many at Davos will appreciate, the rest of the world will ignore this development at its peril.

In addition to the negotiation of a European version of the US-China Agreement on Cooperation in Science and Technology, how should the continent’s leaders secure the prize of locking in collaboration with China before the opportunity disappears?

Every link of the innovation chain from research to commercialisation must be strengthened. We also must give greater urgency to national initiatives to reform R&D and innovation systems.

Europe must also capitalise on existing strengths and find synergies between Chinese growth needs, and the potential and objectives of European industry, research and consultancy. For instance, in food and nutrition, there is an urgent need in China for international scientific expertise owing to the need for better production efficiency and quality: food production scale in rural areas is below critical mass, and food quality is not suitable for export. China cannot, as yet, tackle this issue as it lacks a sufficiently robust quality assurance system.

If Europe can raise its game and step up to the historical challenge it confronts, compelling value propositions can also be developed in virtually all fields of science and research, including nano-electronics and embedded systems, biotechnology, medical technology, pharmaceuticals, and creative and design.

The challenges are real, but if we can surmount them, the prizes will be stronger bilateral partnerships; locking in China to world trade and investment rules; and a new foundation stone for sustainable growth.

Beginning at Davos this week, will Europe’s leaders begin seize the opportunity, or let it slip?

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