The U.S. is using an old playbook in the global economy and must refocus if it is to compete with China.  That was the message Dan Breznitz delivered to members of the Senate U.S.-China Economic and Security Review Commission on May 10.

“A pervasive misconception among policy makers and academics has made excelling in innovation – defined solely as the creation of new technologies, services, and products – the holy grail of economic growth,” said Breznitz during prepared testimony.  “Accordingly, too often conversations about innovation focus on novel breakthrough developments that give rise to "game-changing" technology.”

An associate professor in the Ivan Allen College of Liberal Arts Sam Nunn School of International Affairs and the College of Management, Breznitz is an expert in globalization and rapid innovation-based industries.  Breznitz’ remarks reframed the focus of the hearing which was entitled “China's efforts to become an innovation society."

“We somehow assume we’re still in a world where, if you innovate, all the rest will happen within your borders and this is just not true anymore,” said Breznitz. “The globalization of design, production, sophisticated manufacturing, and distribution requires a new approach to a second form of innovation – in second generation, processes and production, as well as incremental product innovation – in order to avoid the risk of losing jobs and industrial capabilities essential to the competitiveness of the United States economy.”

Breznitz outlined four central points that the commission should consider about China’s innovation capabilities and the real challenge they present for the United States:

1) Globalization has changed the manner in which innovation is carried out around the world, 2) The rise of global fragmented production of both goods and services has led, for the first time in history, to true economic international interdependency with economic and political implications, 3) China’s true innovational competitive edge, and the real competitive challenge to the U.S., is mastering the art of second generation innovation...and the science of organizational, incremental, and process innovation, 4) The United States should focus less on China’s attempt to outdo Silicon Valley and more on China’s capabilities in the commercialization, improvement and application of technologies first developed in the United States. This is our real long-term challenge and the key one if we wish capture more of the value, including job creation effects, of our own novel innovation.

Read Full Remarks
Watch the Full Commission Hearing Video (Breznitz begins at approx. 42 minutes )