A wind turbine is seen near a gate of the ancient city of Wushu in Diaobingshan, Liaoning province January 18, 2011. REUTERS/Sheng Li

-- Tom Lyon is the director of the Erb Institute for Global Sustainable Enterprise, and Peter Adriaens is a professor of entrepreneurship at the Zell Lurie Institute of Entrepreneurial Studies, both at the University of Michigan. The views expressed are their own. --

President Barack Obama, in his State of the Union speech, called for America to “out-innovate, out-educate, and out-build the rest of the world.” But who is the competition, exactly? Who is presenting “our generation’s Sputnik moment”? Who are we racing against to put a million electric vehicles on the road? The president’s answer: China.

Encouraging American innovation is a major piece of the president’s strategy to win the future. And a global leadership position in innovation is ours to lose.

During another era of innovation, the dot-com boom of the 1990s, the U.S. was perhaps the best market in the world for the launch of the Internet. Now, China is arguably the best market today for deployment of clean technology. China is adding energy production capacity, cars on the road, and new cities faster than any other country in the world. Plus, it has the financial and political power to direct the market to move away from cheaper, legacy technologies.

So how can U.S. researchers, inventors and entrepreneurs profit from the market in China while preserving innovation leadership? That’s a question we first explored during the University of Michigan’s Clean Tech Symposium this past December. In our view, the overwhelming message of the symposium was that the U.S. and China are well matched in bringing together the supply and demand for cleantech innovation.