Despite maintaining leadership in certain areas of technological innovation, the United States is lagging behind competitors such as China in terms of momentum, a Washington, DC-based think-tank says in a new study, in part because of a reluctance on the part of the US government to provide support.
“Even if one believes that an industrial policy would be detrimental, the United States and other governments need to take certain steps to boost a culture of innovation,” the Atlantic Council study argues.
“Despite praising itself for its liberal market vocation, the United States engaged in strategic planning after the Second World War; this effort was intensified after the Soviet Union’s launch of Sputnik in 1957. Furthermore, the Pentagon’s Defense Advanced Research Projects Agency (DARPA) and its Internet and digital investment have been a critical ingredient in the success of Silicon Valley companies right up to this day.”
Meanwhile, the mood in China is significantly more enthusiastic.
“Beyond the growth of accelerators and incubators, to get a feel for just how excited and optimistic people are about the future innovative capacity of China, look no further than the venture capital industry. Between 2006 and 2016, early- and later-stage venture capital investment in China increased by 3,000 percent, from $1.1 billion to $34.1 billion. The majority of that growth occurred from 2013 to 2016 alone (from 2006 to 2013, venture capital investment only averaged $4.3 billion, before shooting up to $34.1 billion).”
The lead author of the Atlantic Council study, Robert Manning, expressed his skepticism that the US would rise to the occasion.
“While I believe one underestimates US resilience at one’s peril, given our current dysfunctional political system, trends in education, and general aura of complacency, it is difficult to see a ‘Sputnik moment’ of across-the-board effort taking the steps needed to reserve these trends,” Manning told Axios.