Entrepreneurship and commercialization are better predictors of tech advantage, and the US leads in both

These issues are not binary – an outcome where China makes all the shoes, and the United States makes none. We would need to consider both the number of shoes produced and their quality and type, and then ask how shoes contribute to wealth, power, and military strength and whether there are alternative technologies that can substitute for them (since under duress, nations are inventive). Answering these questions requires a broader view than that taken in many reports that looks at the overall economy and its technological base. The best predictors remain overall national revenue and tech market share.

The keys to technological leadership are at the most fundamental level, access to capital and to ideas (both the ability to create new ideas and to use them). Better measures of success include market share (meaning someone actually buys what you are making), the number of startups (particularly ‘unicorns’), revenue, and the long-term trend in national income. These revolve around the central importance of the ability to commercialize research and innovation. This is an area – entrepreneurship - where the United States has had an advantage over Europe and China, both of which score well on proxy innovation metrics but less well for outcomes. The biggest risks to the U.S. innovation system are political dysfunction and regulatory ideologues. These are domestic problems, not the result of international competition, but is easier to fault China than in the mirror.