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India Vs. China in Innovation: The UN Weighs in.

Posted by: Bruce Nussbaum on March 14, 2006

The debate over India vs. China, who is most innovative, was addressed in the Wall Street Journal yesterday, March 13, in an article, “Low Costs, Plentiful Talent Make China a Global Magnet for R&D,” that is written off a new report by the United Nations Conference on Trade and Development (sorry, I couldn’t link to the UN site to get the report or link in the WSJ site to the story).

When it comes to innovation, China wins big over India in this UN report. Companies such as Motorola, P&G, IBM and many others are opening and expanding R&D operations inside China. Companies are shifting their focus from the internal market to using China-generated innovation for the global economy. The UN report says that China is spending 1.5% of its gross domestic product on R&D invesment, twice that of India. The US spends 2.7%. China plans to boost R&D spending by 20% in 2006 to get its total figure up to 2% of gdp by 2010.

OK. This sure undermines the argument that China is to Walmart as India is to Target made by Grant McCracken. Check out his take on the UN report and the debate now.

As for me, the jury is still out. No doubt great Chinese companies such as Lenovo are global innovators. Just look at their latest round of laptops. Motorola is doing brilliant work at its Chinese labs. But measures of R&D spending are not measures of innovation. Indeed. companies such as P&G are reducing their spending on R&D and increasing their innovation productivity. An innovative culture requires more than money.

I am rooting for BOTH India and China in the innovation sweepstakes. The country I am really worried about is—mine.

Reader Comments

David Gong

March 15, 2006 5:38 PM

Actually we should not worry much about this country's innovations. There have been plenty of activities going on. Maybe we ought to rethink about the purpose and efficient model of innovation, and get away with traditional unilateral invented-here type of R&D and promote Collaboration and Development (C&D) based innovation framework, the new paradigm. So innovation productivity can be achieved and value-maximized through a flat-world talent pool by all countries, China, India and US alike.

David Scott Lewis

March 15, 2006 9:03 PM

There is really no comparison: In R&D, China beats India. All the stats prove this, too. Patents, citation analysis, university rankings, the list goes on. There's also the argument that the best Indians go to (or, are already in) America, whereas many good Chinese scientists are going back to China (the expression is "sea turtles," "hai gui" in Mandarin) -- although I'd argue that America still has the best Chinese. It reminds me of the von Braun scene in the movie "The Right Stuff" where he proclaims that "our Germans are better than their (Russia's) Germans."

But as somebody who is a VP of one of China's largest outsourcing firms, I have to admit that in practical terms, especially in the IT sector, India is way ahead of China. That's really not such a bad thing: As Indian outsourcing firms move up the food chain, so do their rates. Besides, there's a strong incentive for American firms to use IT outsourcing resources in China, namely, access to the domestic (in China) market.

Anyway, I cover this turf in my AlwaysOn Network "Letter from China" and Sand Hill Group columns.

A.K. Vishwanath.

March 16, 2006 4:22 AM

According to me, China's value is "Product Cycle";
India's value is in "Knowledge Cycle".

Product Cycle consists of the following TOP-DOWN tiers:


which are all about building technology and know-how.
This is infractructure heavy.

Knowledge Cycle consist of the following BOTTOM-up tiers:

Delivering for specialized Domains
Building Design Skills
Locating right talent

Here the Talent is infrastrucure!

There is a distinct "GAP" between the two.
The innovation actually lies in knowledge mining.


Malapati Raja Sekhar

March 23, 2006 3:27 AM

This does not make sense. All the companies mentioned are having Indian R&D centre as well.



April 26, 2006 4:51 AM

It is argued generally that India has better innovaive CAPACITY. Certainly it's spending on R/D is less than China's, thus leading to lower University rankings(which are based on research publications which require high funding). However I work for IBM in the US, and I can tell you that high-tech US companies prefer Indian IIT grads over any other non-US educational institute primarily due to their innovative capacity. Another thing that impresses me about India more is its highly successfull and indigenous space program, which has achieved technological parity with China on less than half the funds. In IBM we do get more patents out of China, however in tech patents are a dime a dozen. The patents coming out of India tend to represent greater leaps in technological capacity compare to China.


May 30, 2006 3:46 AM

the consensus here seems obvious
to indians, it's india hands down
everybody's china!
ha ha ha ha


July 23, 2006 11:47 PM

Anyone who thinks India is more "innovative" than China should go read the Knowledge Assessment Methodology Test done by World bank. According to World Bank, China scores 4.74 in Innovative Index, while India scores only 3.72. And the gap between China and India is also widening.

Go to,,contentMDK:20589293~menuPK:1453865~pagePK:64168445~piPK:64168309~theSitePK:1414721,00.html

And go read the article


September 12, 2006 10:18 AM

We can talk about Chinese innovation when China get its first REAL private Limited company, till then, lets talk to the government....

Apun Ka Desh

September 14, 2006 12:33 PM

Very interesting article.


December 26, 2006 8:56 AM

Going by facts,40% of silicon valley start ups are owned or jointly owned by indians.

It's just the lure of cheap labour and low production costs that are driving companies to china,thats only perk up their balance sheets.

The chinese are absolutely no match to the innovative poweress of the indian's(I guess we have more noble prize winners than the chinese)


July 11, 2007 12:16 PM

India is far ahead of china in terms of innovaion and science as u can see India have got its own space program and when it comes to sending the satellite we can send it much cheaper than any one else


July 25, 2007 8:57 PM

I believe both nations are equally great in being very innovative.
R&D Budgets, papers published and international rankings mean little if compared to how much impact a specific idea and/or invention has on society.
Judging form history, both China and India are capable of making many great contributions to mankind. Just look at the technological inventions and theories they came up with before the rise of Western-Arabic influenced science.

Many people tend to forget that science and technology is much more than business and competitions. It's sort of like art, whatever great idea is thought of and physcially created, it belongs to the whole world.


August 24, 2007 4:08 AM

indian Nobel Laureates in science(3): Sir Chandrasekhara Venkata Raman/Hargobind Khorana/Subrahmanyan Chandrasekhar
indian Nobel Laureates in econ: Amartya Sen
indian Nobel Laureates(other):V.S. Naipaul: Mother Teresa: Rabindranath Tagore
Fields Medal: none
Yuan T. Lee, Chemistry, 1986
Samuel C.C. Ting, Physics, 1976
Daniel C. Tsui, China, Physics, 1998
Gao Xingjian*, Literature, 2000
Daniel C. Tsui*, Physics, 1998
Chen Ning Yang, Physics, 1957
Tsung-Dao Lee, Physics, 1957
Field Medal:(2)Terence Tao: Shing-Tung Yau
Chinese had more science and math. Nobel winners, while indian is better in literature.

Weng, XujianKai

January 19, 2008 8:09 PM

Why the China-India comparison is not so hot in China ?
As a Chinese I think the answer is quite obvious to us, we just don't think there is any meaning in doing this comparison. Our challenge is U.S.A., not I.N.D.I.A.
Our colleagures are 'send' to India on business trip - because he didn't work very well and he definately do not have a good team work attitude -- that is why he was needed to travel to India as a punishment.

Forgive my Chinglish!


February 11, 2008 1:07 AM

to Weng, XujianKai please learn to talk and then comment......india will be the next superpower....have you heard of the tale the rabbit and the tortise......yes good..keep that in mind sir


February 21, 2008 9:27 PM

Has India or china for that matter invented any computer programming language? I know Indians invented more than 26 spoken languages, and Chinese invented three. But why not any computer language?


February 22, 2008 4:49 AM

I think the whole discussion is pointless and largely juvenile. Firstly, comparisons are odious by nature - especially at such stratospheric altitudes. Both the countries have their strengths and - yes - their weaknesses. I do not see the big businesses from either countries pausing to debate who's better. They're all trying their best to identify synergies and ways of positively utilising them.

Chinese are brilliant people and I am yet to meet a non-bigoted well traveled and well informed Chinese who thinks differently about Indians!


May 15, 2008 8:01 AM

One thing to consider here is while India is a well entrenched democracy, with an independent judicial system and a free press, it will take a long time for China to get there if they ever do so. What is smart about China's methods is that they are bringing the masses out of poverty. I think it is absurd to measure innovation and to the 2nd decimal place. A lot of it is subjective as is seen from the many comments above. I believe they are both incredibly talented and innovative. The people and businesses are finding the headroom to innovate with the stifling regulations gone in the case of India and due to the market friendly policies of the Chinese government. We are the beginning of a cycle that will see the two countries more and more influencing the world economy and technological life in innovative ways. While India makes cars for 2-3K and launches satellites for a third of the usual cost, China mass-producing all the consumer goods for the world at such low cost, its probably saving 1 couple of thousand $$ for an average family. In 10-15 yrs I can see them making planes at half the cost that US makes them.....

Bart Speaks

May 16, 2008 1:29 AM

Over the past 5-6 decades, a large portion of the Indian talent from top universities immigrated to US to do post-graduate studies and stayed in the US. This is commonly known as "Brain-Drain". As this changes, things will change for India.


October 19, 2008 5:12 AM

I think India must realise that it is loosing the battle in almost everything. What happened in past does not matter, but it is the future that is of the most concern. If the attitude of the India and the indians does not change we would definety loose the race to China (if there is one)...Quit the arrogance and try to open up the minds
I totally agree with Bart's statement, stop people going out from India...some laws or anything if possible plus remove those stupid old corrupt leaders...we need a real leader who wants to change the country..


November 29, 2008 6:52 PM

i think that india and china should not be compared as these 2 countries are different .either you talk abt,origin , history , culture ,political system,way of working.due to the recession period china is the country which is suffering the most,not india.still india is able to manage the growth rate of appr. 7 as against 8.5%.even if we compare ,chinese are outsouscing teachers from india to teach their people english so that they can verse well wth the now tell arnt v the future guru of china,and as we know,we cant compare a student with the teacher.jai hind

Janos, the Hungarian

December 30, 2008 10:34 PM

Focusing to R+D is an interesting viewpoint, but the real question covers a much wider sphere of life:

- China is still completing its industrialization, innovation is a second class activity (although its significance is slowly growing)
- India hasn't started mass industrialization yet, its innovative info-service sector is just an island in the sea of poor farmers.

Can a country be modernized without industrialization just jumping directly into the info age? According to the European experience of social development, it can't.

China has taken the long term perspective and moving on its own way. India has no way, yet.

Finally a private confession: I like both countries :-)


April 2, 2009 11:25 AM

I'm a Researcher in Singapore and have equal number of colleagues from China and India. Though Asian conservatism is very prevalent in both cultures, I find that the Chinese conservatism exists in their creative process while the Indian penchant to cut costs is always a constrain in the creative process.
From these limited observations, I feel that the diversity of the Indian culture liberates their thinking but the nostalgia of having been a poor country constrains their costs. As for the Chinese, the political environment they were brought up in has a noticeable impact on their ideas.

Disclaimer: I'm Indian and have had my education in Bangalore, Singapore and Ithaca, NY.
My colleagues are in their mid-30's and have had all their education done in their respective countries.


August 15, 2009 8:46 PM

Someone above said "Info-age comes after Industrialization, that's how Europe developed". The very noun Europe indicates all these are culture specific. Indians are more like Mayans...culturally. Obsessed with Maths, Astronomy, Meta-Physics etc. Indians were the first to record that world was round in 3rd century BC.(By Aryabhatta) While China even in ancient times was a manufacturing superpower.Silk trade, Ink etc.
The development model is purely cultural.
By the way Indians also innovate to solve poverty through technology...e.g. C.K.Prahlad's thesis on BOP theory.

Sorry to say this..."Indians don't work, Chinese DON'T THINK" That's why they have communism.


August 21, 2009 9:49 PM

Please let me know which effort is more difficult: 1) Build modern city infrastructures like China has done (just look at Shanghai vs Bangalore) 2)Train some programmers to do IT coding.

viren patel

August 28, 2009 6:12 AM

hi! Lim this is for u...
wanna realy compair India,china.
india has got freedom only 60 years from now & what about china...
I think u have got your ans.


August 31, 2009 1:07 PM

Each should learn from each other - take the best and reject the rest.

Indians would do well to learn discipline, Mass production and simplyfying government procedures(that is to say red tape and corruption) and China would do well to think democracy, IT and English.

Only then can we really stand up to each other fulfilling first our aspirations and that of the millions of poor people who find no mention in this fragile debate.


November 24, 2009 7:41 AM

Where's Nortel?Where's Marconi?Where's Lucent?They had disappeared because Chinese's company is rising in telecom market.Where's Alcatel-Lucent?They had been surpassed by Huawei on July in mobile market.


January 2, 2010 5:30 PM seems that when it comes to china indian can only think of Democracy,Communism and English.

look at the commentators..all belonging to
neutral country Praises China and Indians
praising India.
what i can say more then that.


January 22, 2010 10:50 PM

Ha Ha. I am an Indian (from IIT actually). As part of my job I travel frequently to Asian and Chinese cities. Any Indian who claims that India is ahead of China has probably either not travelled across Asia or is living in bizarro-world. Not only is China more united (granted, largely due to its strong brutal central control) but it's infrastructure is light years ahead of India. Mumbai is a slum compared to Shanghai (check out the major chinese cities Of course militarily it is much stronger and has the *alls to stop a US military plane, dismantle it at leisure and return the parts back to the Pentagon, without repercussions. If the Indian army ever had the nerve to pull something like that, it would be relegated to the status of Iraq. Of course, the cat's out of the bag now that even many of the paltry 5 or so nuclear weapons India tested actually fizzled. Politically, India is lethargic, philosophical and living in the past, while China is an aggressive future-focussed go-getter. China is already claiming Arunachal Pradesh and the day is not far when it walks right in (just like it did with Tibet) and hands India another resounding defeat. I concede that the average rural Indian has far more freedom than the average poor rural chinese. However, that is not helping the country get more prosperous as a whole. I suspect that this is largely due to the difference in the leadership. Because of flawed populism, the leaders in India are largely uneducated, demamgogue ministers, with no training in technology, ,modern strategy and long-term vision. On the other hand many of the top leaders in the communist party are highly educated individuals who want to run the country with a McKinsey like strategy and planning.

Sadly, part of the reason for this difference are the inherent limitations of democracy. China can uproot a few million people to build a three gorges dam, causing the deaths of a few thousand rural people, viciously curb any protests and ban all report of any negative information, while India faces mass protests and rioting if it tries to build a much smaller project. Surprisingly, US companies are more than willing to overlook all this for furthering their profits in China. The moral of the story for India is that power begets power. Make no excuses for being aggressive to protect your interests. And stop drinking your own cool-aid and living in denial about how progressive we are. India definitely has the potential to be a world innovator but the biggest obstacles are crappy infrastructure, sectarianism and corruption.


March 15, 2010 9:39 PM

hello guyz,s far s history is COncern,why didnt british go 2 china but came 2 india 4 a colony.
Also in 1947,india inherited worlds poorest economy.thnx 2 british,so it vl take tym 2 resurrect economy.
Also i hav deeply studied on topic human behavior,innvotion breeds amidst of feedom conferred upon by r constitution n evry1 knowz wad freedom means in communism.

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Want to stop talking about innovation and learn how to make it work for you? Bruce Nussbaum takes you deep into the latest thinking about innovation and design with daily scoops, provocative perspectives and case studies. Nussbaum is at the center of a global conversation on the growing discipline of innovation and the deepening field of design thinking. Read him to discover what social networking works—and what doesn’t. Discover where service innovation is going and how experience design is shaping up. Learn which schools are graduating the most creative talent and which consulting firms are the hottest. And get his take on what the smartest companies are doing in the U.S., Asia and Europe, far ahead of the pack.

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