22 August 2024

The Innovation Fallacy In the U.S.-Chinese Tech Race, Diffusion Matters More Than Invention

Jeffrey Ding

In remarks in 2018, Chinese leader Xi Jinping highlighted the potential of “disruptive technological innovation” to change history. Key advancements, Xi insisted, had remade the world. He listed the “mechanization” of the First Industrial Revolution, the “electrification” of the Second Industrial Revolution, and the “informatization” of the Third Industrial Revolution. Now, Xi said, breakthroughs in cutting-edge technologies such as artificial intelligence had brought the world to the cusp of a Fourth Industrial Revolution. Those who pioneered the new technologies would be the winners of the era to come.

In the following months, Chinese analysts and scholars expounded on Xi’s speech, unpacking the connection between technological disruption and geopolitics. One commentary in an official Chinese Communist Party publication detailed the consequences of past technological revolutions: “Britain seized the opportunity of the first industrial revolution and established a world-leading productivity advantage. . . . After the second industrial revolution, the United States seized the dominance of advanced productivity from Britain.” In his analysis of Xi’s remarks, Jin Canrong, an influential Chinese international relations scholar, argued that China has a better chance than the United States of triumphing in the competition over the Fourth Industrial Revolution.


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