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Article by Yojana Sharma: "In the Know"

It was a wake-up call that shook the science and technology establishment in the US and Europe. In December, the Paris-based OECD said China was on track to become the world's second-highest investor in scientific research and development after the United States.

It may have already reached that point. Some have since disputed the Organisation of Economic Co-operation and Development calculations - based on purchasing power parity - but it is now acknowledged that Asia is catching up on R&D spending. The new worry is that the race for predominance in science research could be a source of future friction between east and west.

"The trend is clear - knowledge resources are increasing more rapidly in Asia, particularly in China, than in Europe or the US," said Sylvia Schwaag Serger, science counsellor at Sweden's embassy in Beijing. She was speaking at a major international conference in London which heard that not just China, but also India, South Korea and Singapore were joining Japan to push Asia into the forefront of science research, challenging the west's decades-long dominance.

"US and European pre-eminence in science-based innovation cannot be taken for granted. It is perhaps too early to say just how far and how fast it is shifting, but the centre of gravity for innovation is starting to shift from west to east," said Charles Leadbeater of Demos, the London-based think-tank that organised the January conference.

Double-digit economic growth has allowed governments to channel investments into research. The mainland's R&D spending has grown 20 per cent a year since 1999. From 1.3 per cent of GDP there are plans for it to increase to 2.5 per cent of GDP by 2020, on par with countries such as Finland, Europe's premier innovation-based economy, and ahead of the US (1.8 per cent of GDP). In South Korea, R&D spending has risen from minuscule levels in the 1970s to 3 per cent of GDP. Meanwhile, Indian Prime Minister Manmohan Singh announced plans in October to raise R&D spending from 0.8 per cent to 2 per cent of GDP by 2012.

This is happening as the numbers studying science at US and European universities are declining. In Britain about 26 chemistry departments and nine physics departments have shut down in the past decade. Students are turning away from science in Germany and Scandinavia.

"The 'geography of science and innovation' is being remapped," Mr Leadbeater said. Asian-born scientists are spearheading changes and returning from the west to set up cutting-edge innovation centres. "The airports of Asian innovation hot spots are thronged with people who are returning," he said, describing this as "a gulf stream of returning talent".

Centres of innovation are clustering around Shanghai, Bangalore in India, and Hsinchu in Taiwan, and are supporting world-class research.

New knowledge parks and hi-tech zones are springing up. On the outskirts of Shanghai, 1,000 researchers are working in a state-of-the-art Intel research facility built from scratch in just five months. By 2012 there could be 10,000 spread over two sites, a Demos report said. In Beijing, engineers at Ericsson's research centre are developing routers for mobile phone systems at a third of the cost of those in Europe. In Delhi, the Indian drug firm Ranbaxy has set up an R&D centre with 2,000 scientists. In Daejeon, South Korea, geneticists equipped with the latest gene- sequencing machines are generating world-class stomach cancer research after just three years.

And there will be more. In a recent survey of more than 200 multinational companies conducted by the US National Academy of Sciences, more than 38 per cent said they planned substantial changes in the worldwide distribution of their R&D work over the next three years. The move is definitely eastwards - and not just because of lower labour costs and tax incentives.

"Contrary to conventional wisdom, not just labour-intensive industries are being moved offshore. Microsoft, Intel, Bell Labs, Motorol a and other firms increasingly perform advanced research abroad," said Adam Segal of the Washington-based Council for Foreign Relations and author of Digital Dragon: High Technology Enterprises in China .

In the few weeks between the OECD report and the Demos conference, the view in the western scientific community turned from disbelief to debating how to manage the new geography of science and possibly to hitch their wagon to newly emerging Asian engines of research.

In the Demos report The Atlas of Ideas: How Asian Innovation can Benefit Us All , Mr Leadbeater said: "Business, universities and research funders need to wake up to what's happening in Asia. The worst mistake would be to retreat into an anxious techno-nationalism, which would be bad for everyone.

"On a global scale it is important that we have more brains working on more problems in more places. That has to be good specially in an era where science increasingly deals with problems that cross boundaries of discussions and knowledge and geography such as pandemics and climate change."

But not everyone believes this will be a smooth ride. Economists, particularly in the US, still speak in the language of competition, with its winners and losers. They fear knowledge jobs will move offshore, R&D will become globalised, and the west's dominance of intellectual property could decline.

"Competition is as likely, if not more likely, than collaboration," said Dr Segal. In the US, he said, the debate was more about the emerging threat than about co-operation. China's secretive anti-satellite missile test this year reinforced that mistrust.

Denis Simon, professor of International Business and Global Technology Management at the Levin Institute, State University of New York, also predicted "more conflict and more collaboration. There will be patent wars, standards wars, intellectual property rights wars, tech wars and even wars for talent," he said. "The need to 'recapture talent', to bring Asian talent home is beginning to generate unease. It is not well received all around the world."

As Asian scientists headed home, one debate in Washington centred around "deemed exports" or how to control hi-tech knowledge in the minds of scientists from falling into the "wrong hands" or being put to "hostile" uses. Whether controls are possible or desirable are a moot point, but is indicative of the general atmosphere that such issues are even discussed in this way. From being copying and adapting centres, Asian R&D centres are becoming more self confident in beginning to steer their own path.

And both India and the mainland are beginning to question their dependence on R&D from multinational companies, which seem intent on harnessing Asian talent for their own needs, rather than innovations needed in Asia, such as tropical medicines, agricultural technologies and environmental solutions. The mainland's innovation strategy is ultimately to reduce dependence on the west.

"China has adopted an open economy and welcomed multinational companies because they think it will serve their long-term goal of raising China's technological capability. If companies are seen not to be serving these goals then the relationship could change," Dr Segal said.

James Wilsdon, head of Science and Innovation at Demos and co-author of the think-tank's report, China: The Next Science Superpower , said: "Chinese policy makers have decided that independent innovation ( zizhu chaungxin ) is what China needs. It is no longer enough to import or copy high-end technologies from the US and Europe."

Yet it could still be another decade before countries such as India and China began seriously to match western innovative output, even if R&D investment continued to grow at current rates, Professor Simon said.

"China can often sound very nationalistic but the reality is that it is heavily dependent on flows of cosmopolitan ideas," Mr Leadbeater said.

While science on the mainland is dictated from top d o wn, India is developing from the bottom up, often in creative, entrepreneurial ways. "Social networks of non-resident Indians in some ways are as important as the state," Mr Leadbeater said. "There is no single innovation model in Asia. These countries could develop in different ways. While China and South Korea's innovation systems are directed towards long-term goals, India's is diffuse and chaotic. There is no way of knowing which system will yield the best results and ones that will seriously take on the west."

Dr Schwaag Serger added: "Will the new products increasingly come from China? We are not there yet. China still faces challenges in trying to become a strong innovation system."

Meanwhile, whatever the doomsayers predict, collaboration between east and west is growing. On the mainland alone there has been a fourfold increase in collaborative authorship of research papers in the past 10 years. One-third of collaborations are now with the US and a quarter with Europe. But one-fifth are also with Japan, South Korea and Singapore. Meanwhile, India and the mainland are increasingly collaborating with each other in R&D. Mainland telecoms equipment company Huawei has an R&D facility in Bangalore, while India's Ranbaxy pharmaceuticals has a research centre in Guangzhou.

"There is less meaning to the notion of national innovation systems. What we are seeing are small communities of global innovation networks," Professor Simon said. That should help avoid an east-west race to be ahead in science.

[Description of Source: Hong Kong South China Morning Post (Internet Version-WWW) in English -- Internet version of Hong Kong's most prominent non-PRC-owned English-language daily newspaper. Root URL on filing date: http://www.scmp.com]