China buying up Facebook? Which one really needs innovation?
Reports of China's investment arm seeking a chunk of Facebook puts a spotlight on Beijing's long march for home-grown innovation. Real tech breakthroughs, however, require more freedom than China has.
If these two giants do end up collaborating, it would be quite a change in relationship status for both of them. In sheer numbers, Facebook users will soon equal the population of China.
For now, the sale of any Facebook stock to Chinaâ€™s official investment arm remains speculative. Still, it is worth speculating on why China might even want an inside track on one of Americaâ€™s most innovative companies.
Is it an admission that Chinaâ€™s effort to create an â€śinnovation oriented societyâ€ť by 2020 is failing and that it still needs the talent and ideas of other nations to keep its busy-bee economy going?
That is not Washingtonâ€™s perspective. Ask high-level Pentagon officials what is their greatest concern about the future and youâ€™ll likely hear about Chinaâ€™s massive investment in science and technology.
For more than 15 years, Chinaâ€™s ruling Communist Party has pushed the importance of â€śindigenous innovationâ€ť and the need to â€śleapfrogâ€ť over Japan and the West in research frontiers. It cites a worrisome dependence on foreign technology, even as it still unabashedly extracts know-how from outside companies wishing to invest in China.
China knows it will soon need its own discoveries and innovations to maintain competitiveness. Many of its sophisticated tech companies have reached world-class levels and now must beef up their R&D efforts and stoke creativeness out of their staff. And the rest of world is becoming defensive toward Chinaâ€™s ways of gaining access to labs and intellectual property.
To really be a world innovation leader, China faces two big hurdles.
One is that it must become less nationalistic. In Europe and the United States, innovation policy is now focused on multi-national collaborative research. Good ideas must float freely past borders with scientists and engineers of all backgrounds. Eureka moments come more easily when diverse researchers can partner up.
Two, Chinaâ€™s centralized authority and its strong social goals often conflict with the freedom that researchers need to explore new ideas. A true culture of innovation is based on honoring individual initiative. Thatâ€™s difficult in a controlled society and a command economy with top-down orders for scientific results that must be a five-year plan.
China still finds it difficult to attract back their researchers working or studying abroad. The spirit of collaboration at home is not the same as in the West. The level of corruption and fraud in official labs is seen as too high. Or the pay is too low.
Every nation is continually asking â€śWhat is the source of innovation.â€ť During his last State of the Union message, President Obama used the word innovation nine times.
Throwing off past restraints and working around cultural barriers is half the battle to uncovering the next invention. New knowledge, or intellectual capital, has to be both managed and unmanaged. Inspiration for an engineer or scientist comes from both individual pursuit and a social network.
Mark Zuckerberg, the former Harvard nerd who built Facebook out of great ideas and who was Timeâ€™s Person of the Year, may be tempted to collaborate with China as a partner. Facebook would gain 1.3 billion â€śfriends.â€ť And China, where jailed dissident Liu Xiaobo won this yearâ€™s Nobel Peace Prize, could learn how freedom is essential to innovation.