Results of research conducted on the innovation gap between the United States and China in the integrated circuit industry. More information at http://igcc.ucsd.edu/research-and-programs/research/international-security/technology-innovation-security/innovation-technology-china/innovation-survey/index.html.

1. Measuring the U.S.-China Innovation Gap
衡量中美创新差距：
UCSD-清华创新指标调查项目
Eric Anderson (敖君翔)
November 9, 2013

2. Current Innovation Metrics
Mismeasure Actual Innovation
• Innovation inputs and intermediate outputs commonly used to
describe end-level innovation
(R&D expenditures, patent output, number of STEM graduates, journal citations)
• China’s 2007 National Industrial Enterprise Innovation Survey
(全国工业企业创新调查) is an exception
Innovation
Inputs &
Activities
Innovation
Outputs
Innovation
Environment

3. New Survey to Measure
U.S.-China Innovation
• For each industry, survey answers:
– What is the gap in innovation between the United
States and China?
– At what rate is Chinese innovation catching up to the
United States?
• Three methods:
– Industry-specific; Leading-edge firms; Experts sample
• Includes questions on innovation environment
– Domestic/international financing and talent, government
regulation, collaboration, geography

4. Survey Flow
Demographics
• Work experience
• Work location
• Educational level
• Organization type
• Job title
• End-user
application
• Design category
Innovation
Level
• Evaluation
innovation level of
anchoring
vignettes
• Evaluation of
innovation level of
5 most leading-
edge IC design
firms
Innovation
Environment
• Innovation
obstacles
• Domestic/internat-
ional financing
• Technology choice
• Industrial policy
• Public services
• Proximity to
suppliers/buyers
• Domestic/internat-
ional talent
• Collaboration
Innovation Gap
• Distance to current
technological frontier
• Distance to advancing
technological frontier

5. Correcting for
Cross-Country Differences
• Concern that US and China sample may approach term
“innovation” with different concepts and definitions
• Created scenarios depicting varying levels of innovation
to correct for bias
• This report only uses respondents’ assessments
of their own country
Methodology used: http://gking.harvard.edu/files/gking/files/vign.pdf
Self2
Team Green1
Self1
Team Blue1 Self2
Team Green2
Team Blue2
Highly Innovative
Not Innovative
Team Green2
Team Blue2
Highly Innovative
Not Innovative
Highly Innovative
Not Innovative
Source: Adapted from Gary King (2004)

6. Limitations and
Potential Mismeasurement
• Conceptual limits:
– Innovation definition includes products and processes
but excludes marketing and organizational methods
– Survey focuses on leading-edge innovation, capturing
the frontier but not measuring the whole industry
– Innovation inherently a dynamic concept—likely to vary within
industry subsectors and not contained to a single industry
• Survey Response risks:
– Low survey response rate of ~5% in first survey on IC design
– Pretested question wording but experts may still differ
in interpretation (i.e. by subsectors)

7. Survey Demographics
• Web-based survey administered from May-June 2013
• Received 68 U.S. responses; 83 China responses
– U.S. sample: 76% private sector; 12% academic
– China sample: 67% private sector; 19% academic

8. Survey Results:
Innovation Level
• Activities of most leading-edge IC design teams
– 67% of U.S. experts rate U.S. innovation high
– 71% of Chinese experts rate China innovation low

9. Chinese Experts’ Assessment
of China’s Innovation Gap
• China’s most innovative IC design teams:
– Average 40 months to current frontier
– 21 percent of Chinese experts say China will never catch up
– Average 55 months to advancing frontier

10. Survey Results:
Innovation Obstacles
• U.S. three largest obstacles:
venture capital, qualified talent, foreign competition
• China three largest obstacles:
lack of high-quality IP, weak IP protection, qualified talent

11. Survey Results:
Government Impact
• Chinese view industrial policy as positive, 52% rate it highly
positive
• U.S. balanced view of industrial policy and public services
(i.e. tax and business administration, customs services, immigration
processing, public infrastructure)

12. Summary
• New survey methodology to understand
innovation gaps in high-tech industries
• Fair consensus that China is 4-5 years behind;
substantial view that it will never catch up
• Value lies in cross-industry analysis—which
industries are catching up closer than others

13. Eric Anderson
UC Institute on Global Conflict and Cooperation
University of California, San Diego
eanderson@ucsd.edu