Offshoring and Outsourcing of Innovation

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A fascinating article over at the Wall Street Journal contemplates the demise of innovation in the United States. It’s no surprise where it’s heading — China. From the Wall Street Journal: At a recent business dinner, the conversation about intellectual-property theft in China was just getting juicy when an executive with a big U.S. tech company leaned forward and said confidently: “This isn’t such a problem for us because we plan on innovating new products faster than the Chinese can steal the old ones.” That’s a solution you often hear from U.S. companies: The U.S. will beat the Chinese at what the U.S. does best—innovation—because China’s bureaucratic, state-managed capitalism can’t master it. The problem is, history isn’t on the side of that argument, says Niall Ferguson, an economic historian whose new book, “Civilization: The West and the Rest,” was published this week. Mr. Ferguson, who teaches at Harvard Business School, says China and the rest of Asia have… Read more