Single shot wonders do not an industrial economy make, and also new technologies may not be able to overcome old technologies that have so much of the investment already in place that they can be incrementally improved for a long time at little extra cost - e.g. magnetic drives vs. optical drives for computers.
In addition, many technologies are actually a combination of a whole suite of technologies, organization structures, industrial clustering etc. Things that the Chinese development model excels at - e.g. photonic microprocessors.
The real problem in the US is the CEO/executive suite level which is full of the wrong kind of people and the incompetence of the state administrations. We don't need more H1-Bs we need corporations run for the long term instead of by profiteering executives and a government not run by ideologically-blinded fools.
I think another problem, where China and the US are at opposite ends of the spectrum is in terms of “who benefits?”. Essentially, wealth distribution versus wealth concentration where both systems are functioning as intended.
I'd add another cause for China's "0-1 innovation" problem - its education system does not celebrate thinking out of the box nor independent thinking, but rather "do as told" and "improve by repeating". But one can argue 以量取胜 is still winning. That's also one of the reasons why it has been difficult for Chinese universities to attract top student talent, especially foreign talent: its teaching system is not attractive to people who are used to free-thinking, so to speak.
Good insights. One factual point to note: The Cybertruck explosion incident is an unhinged guy going through a divorce and various personal problems; he indicated that he simply wanted to attract attention in going out, and using the Trump (and Telsa) name was simply one more way he used to get attention. It does not look like a political statement if you dig into the background. Symbolically, it may fit with what you are getting at, but that's more coincidental than intentional.
Just throwing out a view which is more a thinking out loud query than anything else: What would be the iterative feedback loop within a country that is the more capable of 0>1 innovation if the innovative concept is always then picked up on by the the country that is more capable of 1>100 innovation and improved to a level far beyond what the first country can achieve? And vice versa what is the iterative feedback loop within the country that does optimisation? Right now, the analysis is based on a static state when in reality the comparative advantages of each country feed back into the process and affect each other comparative advantages over the long run. From what I can tell, it takes not just a lot of people but a lot of money to keep innovating at the bleeding edge (after all, every successful invention also carries 99 failed ones behind it. We just don't hear of those that failed and the resources spent on that failure). What happens if there is less and less return on investment to keep the innovation going? Or is the US immune to that process because it is the world's reserve currency?
I literally had this conversation yesterday- regarding the disparity between 0-1 and 1-n innovation and optimization/scaling parts of the cycle.
This is the edge of the innovation conflict between the US and China. And frankly, the two countries are much better than the other in its comparative advantage.
Both systems are now coming to grips with this conflict as previously, they were synergistic- invented in the US, mass produces in China such that both systems benefited.
Now, both systems are coming to grips with their “divorce”. There are advantages and disadvantages to both optimizations…
I think the 1-100 issue with the U.S. is probably oversold. Take a look at chip production. Before 2022, the U.S. produced 0 chips smaller than 6 nm. It is now rapidly catching up to TSMC and they may clear making 2 nm chips in the US.
Another example—solar production. The U.S. was not even in the top 10 of solar production before 2017. It is now no. 3. Very far behind China but the speed and scale the U.S. showed should blunt the assertions that U.S. can’t build anymore.
The issue with China’s strategy is that it’s much easier for the U.S. to copy that than the other way around. The final thing I would add is that China’s catch up was all done with US support and global peace. Those tailwinds are gone. The US won’t match China’s industrial capacity, but it may close the gap far better and far quicker than previously thought possible
The U.S.’ ability attract people from all over the world is its secret weapon. I remember watching an interview where he said something similar, when comparing the U.S. to China and India. As the U.S. grows increasingly towards an anti-immigration stance, it’ll lose this comparative advantage over China.
To me, the canary in the coalmine for immigration tolerance is Indian engineers. Does China have any meaningful number of Indian engineering immigrants?
I can see why it would be difficult for Indian engineers to take up in China. Language barriers, etc. plus, China doesn’t need the talent.
But if you did want to compete globally for talent, it would be easier to start with figuring out how to assimilate Indian talent. They won’t meaningfully compete with you, but they can change the climate in a good way
Wouldn’t you say Pinduodup’s focus on the agricultural sector is a zero-to-one innovation? As I understand it, PDD is revolutionising the rural economy, helping integrate it with the urban economy. It is true that the US has had a better historical record on zero-to-one, but I am not sure it is an advantage that the US can sustain in the “foreseeable future”. China has been catching up all this while and is now at the frontier on many sectors. So going forward, I would expect to see more zero-to-one innovations coming out of China.
And when coupled with China’s advantage in “continuous improvement” (which the US seems to lack), China is the place to be at. It’s all very well to get zero-to-one, but one needs to move beyond one!
I think that's because people are talking about different things when it comes to this immigration debate. For a foreigner like Robert, he is looking at the high-level picture and in that view, immigration is clearly correct for USA.
But for MAGA Americans, the problem is in the details. The current immigration process is bad, abused, not-serving-its-intended-purpose, etc... So, in that sense, you are contesting the "mechanics" of the immigration system, which Robert would not be an expert of (and to be fair, he was not focusing on)
I am also a foreigner so the mechanics are also less interesting to me. But I acknowledge that for an American, that's the most important thing, as that affects your life. So, you should be challenging your leaders to revamp that system. What I think the MAGA movement needs to watch out for, is that in challenging the system, you don't end up throwing it all away
Single shot wonders do not an industrial economy make, and also new technologies may not be able to overcome old technologies that have so much of the investment already in place that they can be incrementally improved for a long time at little extra cost - e.g. magnetic drives vs. optical drives for computers.
In addition, many technologies are actually a combination of a whole suite of technologies, organization structures, industrial clustering etc. Things that the Chinese development model excels at - e.g. photonic microprocessors.
The real problem in the US is the CEO/executive suite level which is full of the wrong kind of people and the incompetence of the state administrations. We don't need more H1-Bs we need corporations run for the long term instead of by profiteering executives and a government not run by ideologically-blinded fools.
I think another problem, where China and the US are at opposite ends of the spectrum is in terms of “who benefits?”. Essentially, wealth distribution versus wealth concentration where both systems are functioning as intended.
I'd add another cause for China's "0-1 innovation" problem - its education system does not celebrate thinking out of the box nor independent thinking, but rather "do as told" and "improve by repeating". But one can argue 以量取胜 is still winning. That's also one of the reasons why it has been difficult for Chinese universities to attract top student talent, especially foreign talent: its teaching system is not attractive to people who are used to free-thinking, so to speak.
Good insights. One factual point to note: The Cybertruck explosion incident is an unhinged guy going through a divorce and various personal problems; he indicated that he simply wanted to attract attention in going out, and using the Trump (and Telsa) name was simply one more way he used to get attention. It does not look like a political statement if you dig into the background. Symbolically, it may fit with what you are getting at, but that's more coincidental than intentional.
Just throwing out a view which is more a thinking out loud query than anything else: What would be the iterative feedback loop within a country that is the more capable of 0>1 innovation if the innovative concept is always then picked up on by the the country that is more capable of 1>100 innovation and improved to a level far beyond what the first country can achieve? And vice versa what is the iterative feedback loop within the country that does optimisation? Right now, the analysis is based on a static state when in reality the comparative advantages of each country feed back into the process and affect each other comparative advantages over the long run. From what I can tell, it takes not just a lot of people but a lot of money to keep innovating at the bleeding edge (after all, every successful invention also carries 99 failed ones behind it. We just don't hear of those that failed and the resources spent on that failure). What happens if there is less and less return on investment to keep the innovation going? Or is the US immune to that process because it is the world's reserve currency?
I literally had this conversation yesterday- regarding the disparity between 0-1 and 1-n innovation and optimization/scaling parts of the cycle.
This is the edge of the innovation conflict between the US and China. And frankly, the two countries are much better than the other in its comparative advantage.
Both systems are now coming to grips with this conflict as previously, they were synergistic- invented in the US, mass produces in China such that both systems benefited.
Now, both systems are coming to grips with their “divorce”. There are advantages and disadvantages to both optimizations…
I think the 1-100 issue with the U.S. is probably oversold. Take a look at chip production. Before 2022, the U.S. produced 0 chips smaller than 6 nm. It is now rapidly catching up to TSMC and they may clear making 2 nm chips in the US.
Another example—solar production. The U.S. was not even in the top 10 of solar production before 2017. It is now no. 3. Very far behind China but the speed and scale the U.S. showed should blunt the assertions that U.S. can’t build anymore.
The issue with China’s strategy is that it’s much easier for the U.S. to copy that than the other way around. The final thing I would add is that China’s catch up was all done with US support and global peace. Those tailwinds are gone. The US won’t match China’s industrial capacity, but it may close the gap far better and far quicker than previously thought possible
The U.S.’ ability attract people from all over the world is its secret weapon. I remember watching an interview where he said something similar, when comparing the U.S. to China and India. As the U.S. grows increasingly towards an anti-immigration stance, it’ll lose this comparative advantage over China.
To me, the canary in the coalmine for immigration tolerance is Indian engineers. Does China have any meaningful number of Indian engineering immigrants?
lol, nope, I can't see any
I can see why it would be difficult for Indian engineers to take up in China. Language barriers, etc. plus, China doesn’t need the talent.
But if you did want to compete globally for talent, it would be easier to start with figuring out how to assimilate Indian talent. They won’t meaningfully compete with you, but they can change the climate in a good way
Wouldn’t you say Pinduodup’s focus on the agricultural sector is a zero-to-one innovation? As I understand it, PDD is revolutionising the rural economy, helping integrate it with the urban economy. It is true that the US has had a better historical record on zero-to-one, but I am not sure it is an advantage that the US can sustain in the “foreseeable future”. China has been catching up all this while and is now at the frontier on many sectors. So going forward, I would expect to see more zero-to-one innovations coming out of China.
And when coupled with China’s advantage in “continuous improvement” (which the US seems to lack), China is the place to be at. It’s all very well to get zero-to-one, but one needs to move beyond one!
Excellent read.
I think that's because people are talking about different things when it comes to this immigration debate. For a foreigner like Robert, he is looking at the high-level picture and in that view, immigration is clearly correct for USA.
But for MAGA Americans, the problem is in the details. The current immigration process is bad, abused, not-serving-its-intended-purpose, etc... So, in that sense, you are contesting the "mechanics" of the immigration system, which Robert would not be an expert of (and to be fair, he was not focusing on)
I am also a foreigner so the mechanics are also less interesting to me. But I acknowledge that for an American, that's the most important thing, as that affects your life. So, you should be challenging your leaders to revamp that system. What I think the MAGA movement needs to watch out for, is that in challenging the system, you don't end up throwing it all away