Page 23 - How China Is Winning the Tech Race

enforcement against makers of
counterfeit goods. Those obstacles “My personal view is that China is long-term
have convinced Yahoo!’s cofounder handicapped and has to have fundamental
cultural change to be a serious competitive
and CEO Jerry Yang that, “It will
threat.”
be another 15 to 20 years before
China develops the infrastructure Tony Perkins,
to challenge the United States for founder, AlwaysOn
technology leadership.”
Even then it may not develop
the distinct innovative and entre-
preneurial edge that Silicon Valley’s ecosystem has spawned in multiple high-
tech areas, says Marguerite Hancock, associate director of the Stanford
Project on Regions of Innovation and Entrepreneurship. Most of the inno-
vation coming out of China is centered on processes or business model inno-
vation, not disruptive technology that breaks the mold, she points out. “I
think it’s too early to tell if China can compete in the same league.”
Silicon Valley commentator Tony Perkins, head of the blogging network
AlwaysOn and founder of Red Herring and Upside tech magazines, suggests
that China does not have the right
cultural environment to encourage
innovation. He cites lack of democ-
“It will only be 10 to 20 years before China
racy, censorship, weak intellectual sees the likes of Gates or Jobs.”
property protection, and lack of
freedom of the press as forces that David Chao,
stifle creativity in the Middle King- cofounder and general partner, DCM
dom. “My personal view is that
China is long-term handicapped
and has to have fundamental
cultural change to be a serious competitive threat,” he says.
“Before any cutting-edge innovations in China can develop,” adds Beijing
tech consultant Mark Natkin, “there needs to be a fundamental change in the
educational system to encourage risk taking and innovation from day one.”
To be sure, China claims a small fraction of the world’s tech innovations
today. But in the next two decades it will account for about one-quarter of the
world’s new tech ideas, notes David Chao, cofounder and general partner of
DCM, whose portfolio includes several Nasdaq-listed Chinese companies. As

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