Der Spiegel looks at the future of innovation in China and suggests that may be the country’s only way out of the current economic mess:
The evidence on whether China can innovate is already beginning to come in. One of the most conservative measures of technological innovation is the number of patents granted by-not just filed with-the US Patent & Trademark Office (USPTO). From 2004 to 2007, China-origin patents granted by the USPTO grew at a 27 percent annual rate, compared with virtually zero growth in the number of all patents granted. If current trends continue, by 2020, the number of China-origin patents granted by the USPTO will exceed the number of patents from Germany, Britain, France, and Italy combined.
A recent report by Thomson Reuters on the development of technologies for green energy also provides relevant data. Between 2006 and 2008, China had the largest number of original patent filings pertaining to wind, solar, and marine energy followed by Japan, the US, and Germany in that order. China’s lead in alternative energy technologies should not come as a surprise. History tells us that innovation never takes place in a vacuum, but is driven by often acute external challenges. This is why companies from Japan, one of the world’s most densely populated countries, emerged as the pioneers of just-in-time manufacturing processes whereby you do not need to waste space for storing inventory. Similarly, the social and economic challenges that are either unique to or particularly acute in China are likely to serve as the demand-side drivers of innovation. Some of the key challenges (and thus also opportunities for innovation) pertain to an acute shortage of natural resources, some of the highest degrees of environmental pollution, rapid urbanization, very high population densities, and a society that will start to age rapidly within the next decade.