Evaluation of technological innovations – The Diplomat

The Diplomat author Mercy Kuo regularly engages subject matter experts, policy practitioners, and strategic thinkers around the world for their diverse insights on U.S. policy in Asia. This conversation with Dr. Richard Silberglit – Senior Physicist and Professor at the Pardee RAND Graduate School, RAND Corporationis the 326th in “The Trans-Pacific View Insight Series.”

Identify your co-author’s three main points report, “Using Predictive Analytics Tools to Evaluate Technology Innovation and Acquisition Targets.”

From 1990-2017, the United States was the leader — the first country to emerge — for far more technological innovations than any other country in six general technical areas of interest to the Department of the Air Force: Additive Manufacturing (AM), artificial intelligence (AI), ceramics, quantum and sensors.

When the emergence of China came after that of the United States, that is. China is a follower, the time difference between the onset of occurrence in the two countries is much greater than in the much smaller number of occurrences for which China is first and the United States Follows the United States.

Technological innovations in China are growing significantly faster than those in the United States, and in the most recent time period studied (2009-2017), there are more early patent applications (i.e., within the first two years of emergence) in China than in the United States for emergence in the six common technical areas studied that occur within three years of each other in the two countries.

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Explain the report’s methodology and the role of US and Chinese patent filings and applications in measuring technological innovation and acquisition targets.

We identified technological innovations by detecting rapid increases in the cumulative number of patent applications filed in specific technical fields using a large data set that includes all international patent applications and issued patents since 2001. We have designated the country of first appearance as the “technology leader” in that particular technical field because it is most likely the home of the inventors and patentees are often the leaders in the most important applications of that technology. When an appearance in the same particular technical field that we define under the Cooperative Patent Classification (CPC) Scheme later occurs in another country, we have designated that country as a “successor.”

We compared the emergence years between the US and China for all emergences between 2001 and 2017 in the six general technical fields studied to determine who is the leader and who is the follower. Organizations that have the earliest patent applications upon emergence in the “technology leader” country may be attractive acquisition targets, especially if their patent applications are at the beginning of more than one emergence, suggesting the possible application of an emerging technology in one or more different emerging technology fields.

Compare and contrast the technological leadership and comparative advantage of the US and China.

The U.S. is a “technology leader” far more times than any other country in the six common technical areas surveyed over the entire time period studied (1990-2017). When the US and China appear in the same specific technical field, the US is the “tech leader” far more times than China. For the smaller number of times when China is the “technology leader” and the US is the “follower,” the time between the emergence of a leader and a follower is much shorter than when China is a “follower,” suggesting that over time period, and in the general technical areas examined, the US was in a stronger position when it was a technological “follower” than China was when it was a technological “follower”.

Explore international patent trends and the trajectory of US-China technology competition.

We made a detailed comparison of US and Chinese patent applications in the small number of specific emerging technical areas (2 percent of total appearances) in which the US and Chinese appearances occur within 1-3 years of each other, which we call “ close bursts’. For these nearby events, we found a time-dependent difference when comparing the number of early patent applications in the US and China:

  • From 2001-2008, most of the early related patent applications in the general technical areas studied were in the US
  • From 2009-2017, the number of co-occurrences in which China has the majority of early patent applications is greater than the number of co-occurrences in which the US has the majority of early patent applications in all six countries studied general technical areas.

Assess the policy implications of the report’s findings and recommendations for U.S. policymakers and industry leaders.

While the U.S. continues to be the “technology leader” in the general technology areas surveyed, in recent years China has filed more early patent applications than the U.S. in specific technical areas for which the U.S. and China appear within 1-3 years of each other (” close bursts”). To properly assess technological leadership in these specific technical areas, US policymakers and industry leaders should conduct a detailed comparative analysis of the quality of patent applications and products in the world market of the first filers in the US and China.

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To identify the specific technology areas in which the US is the “technology leader” and has US companies with technologically leading capabilities that could make them attractive for a possible foreign acquisition, US policymakers and industry leaders should study organizations with early patent applications that are early in more than one occurrence, suggesting the possible application of an emerging technology in one or more different emerging technology areas.

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