To what extent should we worry about China’s tech ambitions? Nasscom has suggested in a recent report that these ambitions are a matter of concern rather than a threat. Yet, it is true that China is very keen on repeating India’s success in tech services. And some research outfits have painted a gloomier picture than Nasscom has.
In a new report released yesterday, OECD takes a sharp look at China’s system of innovation. While praising that country’s large increase in R&D spending since 1995, OECD also points to some flaws that we think are born from China’s model of state capitalism.
China suffers from “high technology myopia,” says OECD in its report. One reason is that China tries to direct technology research in a centralized manner, rather than depending on private enterprise and capital markets. The state tries to pick winners. India’s chaotic innovation system is decentralized—and hence more robust.