China aims to compete for tech jobs

Software, pharmaceutical and biotech companies in Research Triangle Park could someday be troubled by China's evolution

Second of three reports

In China, where weavers and assemblers have cobbled together the fastest-growing major economy on Earth, the government is pushing beyond manufacturing. It wants innovation.

The shift underscores the changing dynamics and growing influence of the world's most populous country. As the engines of creativity churn, U.S. manufacturing workers won't be the only ones sweating the China effect.

Engineers, scientists and techies in Research Triangle Park, Seattle, Boston and elsewhere could find themselves in fierce competition with Chinese workers to design the latest software, medical device or other high-tech gadget.

"They have incredibly ambitious goals," said Adam Segal, a senior fellow for China studies at the Council on Foreign Relations in New York. "The Chinese leaders are always talking about how China doesn't want to be the factory floor of the world any longer. They want to be at the cutting edge."

In major cities such as Beijing and Shanghai, science and technology parks have sprung up. Incubators give Chinese entrepreneurs a chance to test and validate ideas. The central government is funding more scientific research to gain an edge, boosting the coffers of the National Natural Science Foundation by 25 percent this year, to $425 million.

Despite that, China's spending on basic research and development lags spending in developed nations. The $320 billion that U.S. industry, government and nonprofits spend annually on research and development is more than three times that spent in China.

But China is racing to catch up. By 2020, the country wants to be known as an innovation nation, and the government expects about 2.5 percent of gross domestic product to be spent on research and development. That's on par with other developed economies.

By 2050, funding could be far more. By then, China wants to be an international scientific power.

The reason is simple. A nation needs its own technology and scientific development to fuel long-term expansion. If it only copies ideas and products developed elsewhere, it cannot lead. The Chinese government wants its people to develop and create goods and services that the rest of the world wants.

"Innovation is the core of the nation's competitiveness," Chinese President Hu Jintao said in January at a national conference on technology, Chinese news services reported. "Only with strong capacity of innovation can a country win the initiative in the international competition."

That ambition could threaten the underpinnings of North Carolina's own evolution. The state lost 31 percent of its manufacturing jobs between 1990 and 2005, and officials have pushed to reinvent North Carolina as a place driven by knowledge and innovation. Technology-related jobs rose 33 percent in that period.

China, in part, forced the transformation. It could eventually spark another.

China has many challenges to overcome before it can produce fundamental breakthroughs like those discovered in the United States and Europe. Its primary education system must be modified to foster creativity. It needs a patent-like system to protect inventions from copycats. And it needs to prove that it is committed to innovation. Some investors are wary, because a change in the government's focus could stamp out innovation efforts.

Art Pappas, founder of Pappas Ventures in Research Triangle Park, recently returned from a tour of Asia that included universities and research centers in China. His firm invests in the life sciences, putting money into promising biotechnology and pharmaceutical companies.