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1、September20,2010GlobalMarketsInstituteThenewgeographyofglobalinnovationThenewgeographyofglobalinnovationDouglasGilmanWhiletheUnitedStatesandJapanremainleadersininnovation,(212)902-3132douglas.gilman@gs.comincreasedcompetitionfromgrowthmarkets,notablyChina,suggestsaGoldmanSac
2、hs&Co.changinglandscape.ResearchanddevelopmentspendinginAsiasurpassedEUlevelsin2005,andislikelytoovertakeUSlevelsinthenextfiveyears,thanksprimarilytostrikinggrowthinR&DinvestmentinChina.MeasuresofR&Dintensity,orR&DinvestmentasashareofGDP,allowforcross-countrycomparisonsofcom
3、mitmenttoR&D.R&DintensityhasremainedflatacrossG7marketsduringthelastdecadeat2.1%.InChinaithasimpressivelydoubledasashareofGDPsince1999,reaching1.5%,whichremainslowbyinternationalstandards.R&Dinvestmentisdrivenlargelybythecorporatesector,whichfinancesmorethantwo-thirdsoftotal
4、R&Dspendinginmanycountries.Companiesinarangeofindustries,frompharmaceuticalstotechnologyhardware,haveexposuretonewhubsofglobalinnovation.PipelineconcernsandtheroleofhumancapitalThenewgeographyofglobalinnovationiscriticallydependentuponhighereducationinscienceandengineering(S
5、&E)fields.StudentinterestinS&EislowinG7countries,suggestingthatthesemarketsarelikelytohavedifficultyreplacinganagingcohortofnative-bornscientistsandengineers.Relianceonforeign-bornskilledlaborissettorisefurtherastheworld’sS&EskillbaseshiftstowardAsia,notablyChina,whereS&Efie
6、ldsrepresent40%ofallnewuniversitydegreesawarded(morethantwoandahalftimesUSlevels).NewgeographydemandsapolicyresponseInnovation-ledproductivitygrowthintheG7willincreasinglyrequirepublicpolicieswhichattractandretainskilledforeignstudentsandworkers.Intheshortterm,amoreflexiblea
7、ndtalent-friendlyimmigrationregimecanhelpdevelopedeconomiesandcompaniestobenefitfromtheglobalizationofS&Eskills.Longer-terminvestmentsinR&DandscienceeducationcanfurtherenableG7countriestoremaincompetitivebyrebuildingstudentinterestinS&Efieldsandbyexpandingthedomesticsupplyof
8、skilledS&Elabor.TheGlobalMarketsInstituteisthepublicpolicyresearchunitofGol
