In the wake of China's (late 2001) accession to the World Trade Organization, some U.S. leaders feared a major relocation of R&D muscle from the United States to China, as U.S. and other multinational firms were expected to look for low-cost engineering talent abroad. Those fears were overblown, as most foreign firms lacked any confidence whatsoever in China's ability to protect intellectual property, be it foreign or domestic. Early technology transfers were generally limited to localization efforts, i.e., those steps necessary to make existing technology functional for Chinese users. Only where absolutely required by a joint-venture agreement, or the like, were foreign firms willing to share proprietary knowledge or establish major R&D centers outside of their home countries.
That decade-old struggle may soon become an historical footnote as China threatens to blow away the rest of the world in corporate R&D spending. While China may stand on the shoulders of giants with respect to its technological foundations, it is aggressively seeking to become a world leader in everything from high-speed rail to space exploration.
Apple is still the most innovative company in the world, but these trends should throw gas on the fire that is the U.S. debate over math and science education. Where will the next billion-dollar "garage" business be founded?
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