Nusrat Mirza
The technological race between the United States and China has become a defining element of the global geopolitical landscape, with both nations vying for supremacy in emerging fields like artificial intelligence (AI), quantum computing, and other disruptive technologies. At the heart of this competition are two key aspects: the ability to pioneer innovations and diffuse them effectively throughout their respective economies. A balanced and fact-based analysis reveals that while the U.S. and China bring substantial strengths to this race, the U.S.’s focus on diffusion offers a critical edge in long-term technological dominance.
China’s case for leadership in technological innovation
Under President Xi Jinping, China’s leadership has clearly believed in the transformative power of technological innovation. Xi highlighted the potential for technologies like AI to catalyze a new industrial revolution that could reshape global power structures just as previous industrial revolutions did. From China’s perspective, those who lead the way in innovation will dominate the geopolitical landscape of the 21st century.
Xi and other Chinese officials frequently draw historical parallels, comparing China’s ambitions with Britain’s dominance during the First Industrial Revolution and the U.S.’s rise after the Second Industrial Revolution. The logic is simple: nations that control groundbreaking technologies control global power. Chinese scholars echo this sentiment, predicting that China, with its robust investment in AI and other critical technologies, is poised to become the dominant power in the Fourth Industrial Revolution.
China’s rapid advancements in AI research and development, alongside its strategic focus on technologies like 5G, are crucial components of this argument. Beijing has invested heavily in building technological ecosystems supporting homegrown innovations, setting ambitious goals for AI applications in healthcare, finance, and defense industries.
U.S. Case: beyond innovation the power of diffusion
On the other hand, the United States views its technological future not only through the lens of innovation but also through the practical implementation and integration of these technologies across its economy. American leadership, including President Joe Biden, acknowledges the importance of maintaining an edge in AI and other emerging fields. U.S. policymakers have clarified that China’s technological ambitions are challenging U.S. supremacy.
However, the United States has a more profound advantage beyond the mere invention of new technologies: its diffusion capacity. Diffusion refers to adopting technological advancements across various industries and sectors, creating broad-based productivity gains. In this area, the U.S. has consistently outperformed its competitors, including China.
Historically, this has been a key driver of U.S. economic and geopolitical power. In the Second Industrial Revolution, for instance, the U.S. managed to overtake the U.K. not because it produced the most sophisticated machinery but because it effectively adapted machine tools across almost all branches of industry. This widespread adoption of new technologies allowed the U.S. to surpass its rivals in productivity. Today, the U.S. maintains similar advantages in AI and other information technologies. American businesses have quickly integrated innovations like cloud computing, smart sensors, and industrial software, giving the U.S. a significant edge in practical application. The country’s educational institutions and strong ties between academia and industry ensure that innovations don’t remain confined to laboratories but are rapidly adopted by the private sector.
Critical comparison: innovation vs. diffusion
When comparing China and the United States in this technological race, it is essential to evaluate two dimensions: who is pioneering the most groundbreaking innovations and who is better at integrating them into their broader economies.
China’s strengths:
- Innovation focus:China’s officials’ emphasis on leading in AI and other disruptive technologies positions it well regarding invention and strategic innovation. The nation invests heavily in R&D, aiming to lead in emerging industries like autonomous vehicles, AI-driven healthcare, and advanced manufacturing.
- Government-led strategy: Beijing’s top-down approach ensures that resources are allocated efficiently to high-priority sectors, giving the country a rapid development trajectory in areas like 5G, quantum computing, and AI.
U.S. strengths:
- Diffusion advantage: The U.S. has a more decentralized, market-driven approach to technology diffusion, which has allowed it to spread innovations more quickly across diverse sectors. This gives the U.S. a long-term edge in reaping the economic benefits of new technologies.
- Institutional support: U.S. universities, technical institutes, and industry partnerships are geared toward training a highly skilled workforce to apply emerging technologies across various fields.
This institutional framework ensures that innovations have a broader impact on productivity.
The real determining factor: who will lead the fourth industrial revolution?
While China and the United States value pioneering innovations, history shows that the real determinant of technological success lies in how effectively a country can diffuse those innovations across its economy. The U.S.’s ability to translate breakthroughs into widespread productivity gains gives it a structural advantage that China, focusing on top-down innovation, has yet to match.
China’s aggressive push for leadership in AI and other technologies is impressive, but innovation alone is insufficient. Their full potential will remain unrealized without the ability to diffuse these technologies effectively. In contrast, the U.S. has proven its capacity to integrate new technologies across diverse industries, enabling broad-based growth that can sustain its technological leadership.
Conclusion: who holds more merit?
In the U.S.-China technological race, both sides present compelling claims to future dominance. China’s focus on innovation, backed by strong government support, provides it with the potential to lead the world in key areas like AI and quantum computing. However, the United States’ ability to diffuse technological advancements across its entire economy gives it a critical long-term advantage.
While China’s innovation-centric approach may allow it to make significant strides in the near term, the U.S.’s focus on diffusion makes it better positioned to maintain global leadership in the coming decades. In the race to dominate the Fourth Industrial Revolution, the ability to spread and integrate innovations will likely prove more decisive than the capacity to invent them. Thus, the U.S. claim to technological leadership holds slightly more merit when viewed through this broader lens.
The author is the Chief Editor of Monthly Interaction.
