Innovation is how we make our living: Is China buying?
– 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.
Keynote speakers Peggy Liu of the Joint U.S.-China Collaboration on Clean Energy (JUCCCE), and Professor C.S. Kiang of Beijing University described a cash-rich China hungry to address ballooning energy demand and rampant environmental degradation. At the same time, they said, a shift is occurring in China towards greater acceptance of foreign innovation.
These factors set the stage for a new form of clean-tech collaboration between the U.S. and China. At the symposium, Peggy Liu called for allowing Chinese state-owned enterprises (SOEs) to invest in University R&D, in exchange for which they would acquire joint rights to the associated intellectual property (IP) rights.
Of course, joint-ventures between U.S. and Chinese companies are common in China, and efforts such as the new U.S.-China Clean Energy Research Centers (CERCs) demonstrate interest in new types of collaboration at the highest government levels. A key challenge is to fully articulate the new model for collaboration where Chinese SOEs invest in project-specific research at U.S. universities or commercial entities. This model would not only bring positive trade flow into the U.S. from China and create jobs, but also potentially help the U.S. bypass historic IP infringement issues in China.
This concept raises questions related to trust, national security, job opportunities, and entrepreneurship. These questions need to be addressed, and that is precisely what a research team at University of Michigan has set out to do. One goal of the project is to create new online collaboration platforms through a partnership with OnGreen.com, a Web platform that connects investors with cleantech patents, experts and entrepreneurs from around the world. This partnership aims to give the project real-world investment impact.
We have a lot of work to do before we’ll know how much promise this idea really holds, but for now it’s good to see the president focusing on a competitive, innovative America. We hope the emphasis on competition will not blind him to the many opportunities for collaboration that we see.
Note: Cam Smith, MBA/MS 2013 at the University of Michigan, also contributed to this piece. Photo credit: A wind turbine is seen near a gate of the ancient city of Wushu in Diaobingshan, Liaoning province January 18, 2011. REUTERS/Sheng Li