The difference is huge:

Europe’s share of global tech R&D has collapsed from 23% in 2005 to just 8% today, while the US has climbed to 62% and China has risen from near zero to 15%. South Korea now outspends Germany, France, the UK, and Italy combined in tech R&D. Yep, you read that right.

The funny thing is that China’s ahead in over 80% of techs, and has 8 of the top 10 research universities as measured by papers.

Tech:

It’s grim.

New research from the Australian Strategic Policy Institute (ASPI) shows that China is now leading the way in 57 out of the 64 technologies assessed by its Critical Technology Tracker, which has now been updated to cover the last 20 years.

But the point here is that America is spending four times as much as China, and China’s so far in the lead they’ve essentially lapped America. (Europe is irrelevant, the other tech leaders are Korea and Japan.)

 

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It’s probably a bit tiresome for regular readers, but I bring this all up to emphasize a few points.

First: GDP means nothing. Nothing. Everything in the US is way more expensive, inefficient and unless it’s a luxury sector serving the wealthy, of low quality.

Second: there is NO possibility of the West catching up with China without reducing costs and increasing efficiency. It just can’t be done. That means health care, real-estate, food costs: practically everything.

Third, though not obvious in the above data, much of the efficiency comes from the fact that China has a massive ecosystem of tech firms, including huge clusters of small and middle sized businesses. You want to prototype in China, you can walk right into a factory in Shenzen and have it days to weeks. In the US it takes months or years.

Once you lose this ecosystem, and the US has lost much of theirs, getting it back is unbelievably hard. You’ve got to control costs, and so on, but it also takes decades of industrial policy. There’s no quick cure for what ails the West, too much is gone already, and that is compounded by the scarcity of rare resources and key manufacturing, like machine goods, basic electronics (including things like magnets) and so on.

And since the West sanctioned the hell out of China, they’re now returning the favor. Their sanctions on Japan are likely to destroy multiple market leading tech companies. US and European companies can’t get what they need for many advanced technologies. It’s… well, not hopeless, but pretty damn close.

AI is the last big US tech advance, and my bet is that China, with its open source models that are up to thirty times cheaper (and can run on local systems) are going to win that race where it matters: in adoption. It’s just safer to use Chinese models, which, at least so far, also tend to have a lot less usage restrictions.

If the West didn’t want this to happen we had to act decades ago. The tech lead ALWAYS goes to where the manufacturing floor is, that was true for Britain to America and it’s true for America to China.

But cheer up, America being weak is one reason why Iran can win. America’s weakness is the best hope for Palestinians, since without America, Israel is toast. And, as an added bonus, America has lots and lots of billionaires. That’s what American policy was meant to do, and it succeeded. Chinese policy was meant to lift hundreds of millions of people out of poverty and to make China strong, and it succeeded.

The West got what it wanted: impoverished weak workers and the richest rich the world has ever known