Executive Summary
This report assesses the technological diffusion capacity of the United States and China, a critical factor in their strategic rivalry. It finds that while both countries have substantial capacity, the U.S. holds an overall edge in production diffusion, whereas China excels in state-coordinated adoption and research-to-research collaboration. The study emphasizes that long-term national advantage hinges on effective technology diffusion, not just innovation.
Why It Matters
This document is crucial for defense and geopolitical analysts as it evaluates the technological diffusion capacities of the U.S. and China, directly impacting their strategic competition and future distribution of global power.
Key Takeaways
- The United States maintains an overall advantage in technological diffusion capacity, particularly in institutional conditions supporting production diffusion like research-enterprise linkages and absorptive capacity.
Source evidence · PDF page 59
The United States retains an overall edge. It performs more strongly in the institutional conditions that support production diffusion, especially in research–enterprise linkages, absorptive capacity, intermediary organizations, and legal-commercial frameworks.
- China demonstrates a clear advantage in state policy coordination for technology adoption and research-to-research collaboration, enabling rapid scaling of adoption in strategically prioritized sectors.
Source evidence · PDF page 59
China’s clearest advantage lies in research-to-research collaboration and state policy coordination, and it has a system that is better set up to quickly scale adoption.
- Effective technology diffusion, rather than isolated innovation, is paramount for long-term national advantage, as countries that fail to embed general-purpose technologies widely will underperform their potential.
Source evidence · PDF page 59
This matters because we argue that long-term national advantage depends less on isolated excellence and more on whether general-purpose technologies become truly embedded across the ordinary fabric of economic life. A country that leads in invention but fails in diffusion will underperform its potential; a country that mobilizes fast but cannot ensure effective use will face diminishing returns.
Strategic Relevance
Understanding the technological diffusion capacities of the U.S. and China is vital for assessing their long-term strategic competition, economic power, and military modernization, particularly in areas like AI and other general-purpose technologies.