Perversely, researchers may enjoy a richly rising harvest of government grants if the outcome of the intergovernmental climate change negotiations in Bali is an inconsequential as many critics argue. I suspect that the outcome is less of a disaster than claimed by that obsessive Cassandra of the Guardian newspaper, George Monbiot (“so far the Bali deal is worse than Kyoto”). But neither is it anything like the triumph trumpeted by the UK’s Environment Secretary, Hillary Benn (“what we have achieved has never been done before”).

The agreed text lacks specific targets for reducing CO2 emissions, though it does acknowledge that “deep cuts” will be needed. But as everybody now knows the US again seemed content to play the villain and to block 25-40% target cuts by 2020. In reality the whole fortnight of jousting between 190 governments was not a great deal more than a loosening up exercise for the negotiations to come over the next two years or so. True, some principles were established on technology transfers to poor countries and on aids to avoid deforestation. But the real shape of the regime to come after Kyoto’s expiry in 2012 will only become apparent later. Some say the talks could even drag on until 2012.

I have my doubts whether the next US President – more likely than not to be a Democrat – will break with George Bush’s desire to see a clear definition of developing countries’ responsibilities in a new era of emissions reductions. Given that China will soon overtake the US as the largest global polluter (in volume, not per capita, terms) it is not unreasonable to be looking for a global agreement that offers some prospect of reversing the rising tendency of China’s CO2 emissions. But the rich countries will have to pay something towards the costs not only for China but also for India and, perhaps, others. Potentially, this is one of several potential stumbling blocks that could put a really effective global agreement beyond reach.

In which case, the search will become ever more urgent for winning technologies that in one way or another will lighten the sacrifices and changes of life styles the rich nations will need to make to avert the natural disasters scientists are now forecasting. Unless CO2 pollution peaks and starts to decline over the next 10-15 years there will be a race against time to prevent the 4°C or more rise in average temperatures that threatens the survival of many animal species, food production and the viability of low lying coastal areas around the globe. Even if it is correct (which I doubt) that the technology already exists to mitigate and reduce global warming, more is definitely needed and needed quickly to cover us against the probable failure of politicians to deliver us from the threat.

I am beginning to wonder whether many European countries will eventually be forced to drop their resistance both to the use of genetically modified organisms (GMOs) and also to nuclear power for energy production.

Objections to GMOs are culturally embedded far and wide in the EU, although a number have been approved under an extremely laborious internal process. Broadly it takes 2.5 years for a GMO to be approved in the EU compared to 15 months in the US. Even if the European Food Standards Agency issues a reasonably prompt approval (whatever that is), divisions between Member States make it impossible to assemble a qualified majority in the regulatory committees and the Council. The locus of decision then moves into comitology – that dense network of hundreds of committees of member states chaired by the European Commission – where some approvals do see the light of day because voting is on a different basis and requires a qualified majority to be cast against them.

One effect of the lack of political and public consensus in Europe on GMOs is the actual or threatened disruption of animal feed imports. Exporting countries obviously have approved a GMO crop before being ready to ship it. But the EU’s zero tolerance for unapproved GMOs means that the feed cannot be imported until its protracted internal process has yielded a decision. Cultivation of GMOs in exporting countries is increasing to the point where, unless the EU steps up its rate of approval, real trade disruption is threatened. A report compiled this year by DG Agriculture concluded that if Argentina and Brazil began cultivating GM soybean, and EU approval was not available, feed costs could rise by up to 600%.

This may be only one source of pressure for a less restrictive approach to GMOs. Another could be the need to raise food production in Europe because of scarcities elsewhere brought about by climate change or population growth. GMOs tend to deliver higher yields for various reasons including resistance to crop disease. NGOs would contest every word I have written, arguing that we will be exposing future generations to unnecessary risk. But the here and now generation, pragmatic under the lash of necessity, will be quite likely to take a different view.

And a similar process could lead to changes of policy in Europe (notably in the UK, Germany and Sweden) on nuclear power. As James Lovelock, the veteran scientist and father of the environmental movement has emphasized – to the horror of his disciples – the urgent need to cool global warming points inexorably to the need for a rapid and widespread expansion of nuclear energy.

I have just read an account of the “Kindle” – Amazon’s ebook device just launched in the US. My sense is that it warrants the time-honoured judgment delivered on virtually every invention from the bicycle to the iPod: “it will never catch on.” Not every innovation has a market; think of the Sinclair C5, the pedal and battery powered buggy, or the Apple Newton. The technology has to work, it has to relate to consumer needs, the market has to be accurately assessed and the product shrewdly priced.

There is a question mark against how precisely innovative is the Kindle. Sony has an e-Reader available only in the US and there is a device called iLiad produced by a Dutch company Irex. Until now all such products have sold in small quantities and the challenge for Amazon is to line-up its marketing power behind the Kindle and overcome some disadvantages built into the business model.

It is marketed as “more than a book” because its mobile network connection gives users access to newspapers and magazines subscribed to via Amazon. It will also display documents that the user can send to a personal email address. But you will have to pay for both of these facilities even though newspapers are free online. And the Kindle will set you back about €270. Even though it does not closely approximate to paper, I can see that people whose jobs require them to carry around huge tomes, or to have easy and quick access to them (lawyers perhaps?) might find a use for a dedicated reader. But freed of the need to carry around a large volume or two, the user will still have to add yet another gadget to his daily burden of a telephone, an iPod, a laptop and who knows what else.

It could be that the technology is still a leap or two short of hitting the spot. Seven or eight years ago, I remember experiencing a certain enchantment with a DoMoCo look into the future movie clip in which an e-reader was very user-friendly and newspaperish. In the absence of a demonstration model, I suppose this depiction had no more significance than a cartoon drawing. But it was certainly the vision to aim for.

Is any European company or small entrepreneur trying to achieve the vision apart from Irex? We seem to have left so much marketing space to others. We are great at ideas and pretty poor at turning them into products that people will buy. Will the Kindle be one of those products? Since I am the one to doubt its potential, its success if virtually assured.

Like many people I suspect I have an inexhaustible appetite for doomsday predictions. So this ought to be the best of times for me since there has rarely been a richer harvest available of gloom-laden warnings about the future. Most are connected in one way or another with climate change on which scientist and inventor James Lovelock tops the league of purveyors of grisly, bloodcurdling forecasts. I am far from being a climate change-denier but even I recoil with a certain degree of skepticism from his view that the global headcount will fall to around 600 million people by the end of this century after billions have been wiped out by the fearful impacts and consequences of climate change.

Lovelock, now 88, has been and continues to be a strong influence on environmentalists of every political hue, although he has alienated more than a few by advocating nuclear power as the last best hope of averting disaster. But he would seem to have a few disciples at the NGO International Alert whose report a couple of weeks ago highlighted “46 nations and 2.7 billion people” who are now at high risk of being overwhelmed “by armed conflict and war because of climate change.”

Dan Smith, IA’s general secretary, explained to the British Sunday Observer: “Holland will be affected by rising sea levels but noone expects war or strife. It has the resources and political structure to act effectively. But other countries that suffer loss of land and water and are buffeted by increasingly fierce storms will have no effective government to make sure corrective measures are taken. People will form defensive groups and battles will break out.” He cites Peru as one possible example. Its freshwater is mostly glacier meltwater and by 2015 virtually all of Peru’s glaciers will have melted. A weak democracy with a fragile political system, Peru is likely to suffer “chaos, conflict and mass migration”.

Reading stuff like this makes me wonder whether I should not curb my appetite for disaster scenarios – or at least those that start from assumed scientific opinion and then weave their own nightmares around it. Read the International Alert report and compare its language to the output from the International Panel on Climate Change. The former is a political document designed to arouse concern and mobilize action, the latter cautiously sets out various scenarios as a basis for thought and action by policymakers. There is always the risk that the public will tire of disaster scenarios and begin to discount them. But looking ahead to the Bali ministerial starting on December 4 as a believer in the need for urgent and coordinated global policies, I can see that every effort is needed to create a global public opinion that will demand action to mitigate climate change from Beijing to Brasilia and Brussels, and from New Delhi to Washington and Moscow.

Despite the many years during which it has tried to promote greater mobility of researchers in the EU, the European Commission has just established that there is nothing resembling a common market for this highly important product. This is not too shocking because there is no such thing as a mobile European labour force of any significance in any sector. There is, instead, a tremendously wide range of annual salaries for researchers - running from €62,406 in Austria to €3,556 in Bulgaria, yielding an EU 25 average of €37,948. Figures gathered in a survey for the Commission go on to confirm one of those “facts” that everybody knows but about which they can tell you very little – the EU scarcely compares with the US where the average annual salary for researchers is €60,156. Not quite as high, it may be noted, as in Austria but way ahead of France (€50,879), and Italy (€36,201), and a Caribbean holiday in front of Germany (€56,132).

In an effort to make the numbers more truly comparable by taking the cost of living into account, the salary figures have been reworked in terms of a purchasing power standard (PPS). Austria remains number one in the EU, although at a slightly reduced level, while the US springs forward to €62,793, marginally ahead of … Australia (see table, page 19 at http://ec.europa.eu/eracareers/pdf/final_report.pdf). Salaries are no doubt a reflection of local labour markets and pay and benefits scales. When adjusted for the cost of living, Chinese researchers’ earnings leap from €3,150 to €13,855 and the Indian counterpart from €9,177 to €45,207. The Indian average at PPS is actually higher than the EU average. I wonder how many Indians are aware of that and whether we in Europe are noticing any weakness in our ability to attract researchers from the subcontinent.

Switzerland becomes markedly less attractive on the basis of PPS. Its average salary for a researcher is €82,725 which sinks to €59,902 on PPS. Israel, by contrast leaps in the other direction from €42,552 (average salary) to €59,580 (PPS). Overall, in the EU eastern Europe and the Mediterranean are paying at low and medium levels while central Europe and the Nordic countries are high or very high.

Nothing terribly surprising but everything to be regretted in the fact that there are severe discrepancies in many countries in the pay of women researchers. Salary gender gaps are over 35% in Estonia, the Czech Republic, Israel and Portugal and below 15% in Bulgaria, Denmark, Greece, Iceland, Malta and Norway.

As a layman, I often struggle to understand science journalism. Even from time to time the high quality product offered by this web site. I attribute my difficulties to my education – the teaching of science at my grammar school did not excite my interest as much as the French Revolution or the novels written by the Brontes. I left school with a very poor understanding of the basics of physics and chemistry and have spent most of my newspaper reading life speeding past science headlines.

Because many share my ignorance, newspapers and television have long employed journalists to explain science to the likes of me. I am grateful for this, although I still struggle as I try to lower my levels of ignorance - the science section of the Economist, for example, makes fewer concessions in the direction of “dumbing down”. However, I am now increasingly dissatisfied with the simplified dispatches from the world of science because they nearly always leave me asking questions that should have been answered in the reporting. Last week provided a good example with the British press coverage of the World Cancer Research Fund’s report drawing attention to the cornucopia of delights – from bacon to red meat – that heighten the risk of cancer. Nothing I read or saw on television offered any assessment of the extent to which these and other pleasures put us in greater jeopardy. It may well be that the report had nothing to say on this, in which case I want to be told that it has nothing to say. The findings are, after all, of much less use if there is nothing to help me judge whether or not I should manage these and other risk factors.

Cancer stories are classic scare stories – a category shrewdly examined a couple of years ago by Ben Goldacre in a Bad Science column for Britain’s Guardian newspaper (he also runs a website of the same name at www.badscience.net). He accuses science journalists of systematic misrepresentation of research findings:

“Once journalists get their teeth into what they think is a scare story, trivial increases in risk are presented, often out of context, but always using one single way of expressing risk, “the relative risk increase”, that makes the danger appear disproportionately large.”

As a doctor who works for the British National Health Service, Goldacre has a point. And he makes other good ones in looking at other two categories of bad science journalism that he identifies: “wacky stories” and “breakthrough stories”. His polemics are tasty and stick in the memory, especially his conviction that the media is unable to deliver scientific evidence because too many science communicators are humanities graduates who reflect the continuing rejection of science and empiricism that began with the Romantic Movement in the UK more than 200 years ago. And the humanities have not really moved on since then, “except to invent cultural relativism”.

I don’t know whether this is a very British discourse or whether similar weaknesses can be found in science journalism as it is practiced in continental Europe. Any insights would be welcome.

The OECD’s report on the growing importance of tax breaks to encourage innovation surprised me with the information that France and Japan have the second highest number of biotechnology firms after the US. With 800 each, they are well short of America’s 2,200 or so, but France is well ahead of any other EU country.

I wonder if this has anything to do with a rather innovative and successful approach to tax incentives for innovation that has been applied since 2005 in France. As those who read the OECD report at this site will have noted, tax breaks are becoming an increasingly important feature of innovation policies within the OECD area. I had not realised that governments are now sacrificing substantial slabs of tax revenue in their efforts to stimulate innovation – around $1 billion a year in France and the UK, for example.

The structure of the industries in the two countries is quite different, however. The UK has far fewer firms, but they are much larger than in France and many more are listed. In fact, France’s listed companies are only 20% of the UK total and their market capitalization is only one third of the British companies. Nevertheless, the two industries are about equal in their share of patent filings seeking international protection under the Patent Cooperation Treaty (about 5%). That said, the sheer abundance of biotechnology outfits in France must imply very promising growth potential.

This potential will only be realised, of course, if some of these companies become world class innovators. They are set on the path to growth by enjoying the “Young Innovative Company” (YIC) tax status. This new fiscal regime has had an immediate impact on employment in R&D in the sector. New jobs added 10% to payrolls between 2005 and 2006 and more than two thirds of these were R&D jobs. France Biotech, the association of biotechnology companies, had a hand in conceiving the YIC and says that two thirds of companies in the sector have opted for the regime. It frees them from social security contributions on research staff salaries, providing R&D accounts for at least 15% of total expenditure.

A France Biotech survey indicates that the immediate benefits have been more hirings of R&D staff, more new projects and more investment in R&D equipment. Continually criticized for the dirigiste mentality of its governments and administrators, France is beginning to regard the YIC as a convincing demonstration of the value of letting the market decide R&D priorities.

It has taken a book-promoting trip to Europe by J. Craig Venter, the genial and indefatigable researcher into the human genome, to alert me to synbio. Synthetic biology is seen by some as such a menace to our future as to justify the acopalyptic assessment of 2003 by Sir Martin Rees, president of Britain’s Royal Society, that mankind has only a 50% chance of escaping extinction by 2100. Others of a decidedly more optimistic frame of mind see it as offering bargain-price solutions to problems as varied as malaria and our need to defeat climate change by extracting carbon dioxide from the atmosphere.

Inevitably, the question arises as to whether synbio should be regulated and how. In a recent BBC radio discussion, Venter minimised its novelty, arguing that it was not “dramatically different” from what had been going on in molecular biology over the last 30 years. “It is different only in scale,” he said, adding, “we are not creating life from scratch.” Nevertheless, he does not deny the possibility that the technology can be put to malign use nor that there is a case for regulation. In mid-October his J C Venter Institute (JCVI) published a governance report put together by its own experts together with those from the Center for Strategic & International Studies (CSIS), and the Massachusetts Institute of Technology (MIT).

This exercise has not dispelled all puzzlement. Michele Garfinkel, policy analyst at JCVI and lead author of the report seems to be scratching his head while speaking for the press release. “Designing ways to impede malicious uses of the technology while at the same time not impeding, or even promoting beneficial ones, poses a number of policy challenges for all who wish to use or benefit from synthetic genomics”.

Essentially the expert group identified three sets of governance options. The first applies to firms that supply synthetic DNA and includes the option, for example, that firms must use special software to screen orders for potentially harmful DNA.

The second set is aimed at the oversight or regulation of DNA synthesizers and reagents used in synthesis and the third is aimed exclusively at legitimate users of synthetic genomics technologies. The options cover both the education of users (e.g., modules in university courses that explicitly discuss the risks and best practices when using these new technologies) and prior review of experiments (for example, expanding the roles of institutional biosafety committees to review a broader range of “risky” experiments).

Madeline Bunting, a columnist in the British newspaper, the Guardian, finds little reassurance in such work. Synbio works with and creates bacteria and her worry is that we know very little about bacteria and how they mutate. “But what we do know is that bacteria survive almost anything – if some malevolent bacteria developed, they would be hard to kill off,” she wrote on October 22. But she finds total rejection of synbio too much of a struggle because on the other hand: “we might have ‘a new improved nature’ which is more efficient at meeting our needs and ensuring the survival of future generations.”

It seems almost inevitable that scientific progress will continue to arm us with the means to reduce or eliminate many of the health and environmental risks with which the human race has lived since its inception. It is equally inevitable that many of these amazing technologies could depopulate the plant with distressing speed if they are misused or become the agent of some catastrophic accident. We are on a high wire and very precariously balanced. Can we avoid the fall? And who will show us how to?

In its own words this is how the JCVI summarises its activities: “Our research groups focus on human genomic medicine, infectious disease, plant, microbial and environmental genomics, synthetic biology and biological energy, bioinformatics, and software engineering. One of our core areas has always been high-throughput genomic sequencing. This team is housed in a facility in Rockville and features the latest DNA sequencers, a new technology development lab and a state-of-the-art data center.”

The mundane requirement to earn a living explained my poor attendance at meetings of a Task Force on innovation launched earlier this year by the European Policy Centre. Happily, my absences proved to be no handicap. The EPC has just published a remarkably sensible Policy Brief based on the Task Force’s discussions which offers a useful counterbalance to the “nutty professor” view that all innovation flows from technological development.

The EPC has come up with the inevitable 10 recommended actions for boosting the EU’s innovative performance – I seem to recall that, to its credit, ScienceBusiness broke the mould with only 9 on this subject in one of its publications last year. But this ground is well trodden and as a result there is not a lot new to campaign for on the policy front. Except, of course, for swifter and more focused performances by governments and parliaments. The EPC wants more encouragement for risk taking, higher education reform aimed at interdependent relationships between universities and business, the removal of barriers to innovation, mobility of researchers etc.

To my mind, its most important contribution is to stress that we need innovation for economic growth and “for innovation to have an impact on growth, it must reach the market as a profitable process, product or service. It should not, therefore, be judged simply in terms of technological progress measured, for example, by the number of patents.”

Economic growth is driven by many innovative ideas and products conceived far away from a scientific laboratory. We know that the ICT tsunami has transformed retailing, government processes, the delivery and quality of services and efficiencies in every sphere from health to publishing. Surely, potential commercial application as well as academic purpose needs to be an important criterion in allocating innovation funds. For its part, the EPC has nothing but tepid appreciation for the European Commission’s current efforts on the innovation front. Its failure to see innovation policy as a cross-cutting issue means that “the rhetoric highlights innovation as a key priority, but the reality is different.”

And the reality is lack of drive behind innovation for greater competitiveness. It would help the Commission and many governments if R&D and innovation were controversial issues that people and political parties argued about. There is nothing like a fierce political row for grabbing media attention and moving an issue up the policy agenda. Does anyone have a good idea for what that issue could be?

A constant source of irritation to me is the way the European Commission is organized in vertical silos that often seem incapable of speaking to each other and coordinating their actions. This exacts a heavy price in efficiency and impact, especially in the communications area. Last week, two directorates general (DGs) rang alarm bells that would have been louder and more compelling if they had been rung at the same time.

From one of the Commission’s silos, DG Education and Culture, came a report on progress towards the Lisbon objectives in education and training and from another, DG Research, came a survey on the global top ten corporate investors in R&D. On the one hand we were told that Member States need to redouble their efforts to raise the quality of education and training if they are to meet Lisbon benchmarks. And on the other we learn that there are only three EU companies - Daimler Chrysler (5th) GlaxoSmithKline (7th) and Siemens (8th) - in the global top ten of R&D investors. Needless to say the list is dominated by US companies – five in the top ten and the first four of the top five – which not only spend more but are raising their spending at a higher rate. EU top firms boosted R&D outlays by 7.4% 2006-2007 against a global increase of 11.1%.

On the education and training front, the Commission finds that there are still far too many early school leavers (2 million too many according to the benchmarks agreed by Member States), too few students completing upper secondary school, too little lifelong learning and too low literacy levels. The only encouraging note is that the EU is meeting its target for mathematics, science and technology graduates (over 1million by 2010).

These are not good news items. They should give pause for thought and concern in many national capitals, corporate boardrooms and education ministries and schools. But I wonder how many decision makers (let alone members of the public) have been made aware of this latest evidence of Europe’s continuing underperformance and structural decline in relative competitiveness. If Commissioners Potocnik (R&D) and Figel (Education) had combined their efforts to grab media attention – perhaps by a joint press conference – there would have been at least one EU story greater than the sum of its parts.

Opinion polls have a very irritating tendency to tell us things we believe we already know. Eurobarometer weighed in with one recently that revealed that a large majority of Europeans are interested in medical and health research. In fact, they are more interested in health research than in international news and economic and social affairs.

Given the steady graying of the population this is about as remarkable as a caterpillar in a cabbage patch. The survey would have been far more useful if people had been asked whether they understand what they hear about health research and can relate it to their own concerns.

As someone who is the wrong side of 60, I read articles headlined “Cure for Alzheimers comes closer” and “Drinking red wine keeps heart attacks at bay” with as much avidity as anyone in my age group. The one item of information which is generally missing about which I want impossible precision is when cures for Alzheimers, cancer, Parkinson’s etc will be available from my local GP. Estimates of 5-10 years or even beyond my actuarial lifespan are of little interest. I know that scientists have to be cautious but there are times when they should avoid taking their successes to the media for fear of arousing exaggerated expectations in people like me.

Generally they counter by saying that they are trying to manage expectations that will inevitably be aroused by the media’s interpretation of research reports in the Lancet and other learned journals. I recognize the problem but still require more precision in medical forecasting. Not least because vague estimates of the scientific breakthroughs which may be on their way in the next quarter century, cause me to lament that I was born 25 years too soon. I am sure that no previous generation could have felt so much regret at the random timing of its birth. The pace of scientific knowledge and innovation in health care and cures for disease is constantly accelerating, but not quickly enough for me.

The European Commission’s increasingly rigorous use of public consultation is both a democratic necessity and politically wise. But the value of the exercise is altogether diminished if the consultation is so little publicized that participation is minimized. I am sure this is what has happened to the consultation which closes on Friday September 21 to provide input to a “Code of Conduct for responsible nanosciences and nanotechnologies research.”

I had no idea until I stumbled across a press release last week that the EU is the world’s largest single funding agency for nanotechnology. The 6th Research Framework Programme handed out €1.4 billion in project support. Annual funding under FP7 is expected to be twice the rate of FP6. Better late than never, the Commission has now got around to thinking about the ethical issues that nanotechnology raises.

As a very ignorant layman, I have never devoted a single moment to such issues because I did not know there were any. And a brief research has not made me much the wiser. The Commission has itself produced a Consultation Paper* which leaves us in no doubt that a lot of money is in prospect – its first paragraphs give estimates of the economic impacts of nanosciences and nanotechnologies varying from $150 billion by 2010 to $2.6 trillion by 2014.

The Commission says that the interests of science must be compatible with human dignity and human rights and new technologies must be examined for their potential to threaten human well-being as well as to improve it. It suggests that Code highlight three basic principles: precaution, inclusiveness and integrity. The first should provide for the protection of individuals and define safety requirements. Inclusiveness means “open and uncomplicated” access to public funds while integrity must be safeguarded, perhaps by voluntary reporting of unsafe or unethical situations and protection of whistle blowers.

This is all very well but what are the main ethical dangers posed by nanoscience and nanotechnologies? The Commission does not want to go there at all and makes no serious mention. Web hunting, however, throws up some sinister applications including dramatic improvements in surveillance devices, new weaponry as the basis for “nano-terrorism” and still-to-be-understood environmental impacts of such things as “fullerenes” and “carbon nanotubes”. And how acceptable will technologies such as implantable cells and sensors be to most of us?

When it eventually produces its Code of Conduct, I hope the Commission will help us to understand whether and how it will help to build a few defences against the perverse use of these new technologies.

This is not to ignore the huge potential benefits of nanosciences and nanotechnologies. We have not heard enough about those either. But if this is to be a field of science in which Europe will enjoy a competitive advantage, surely we need a wide public debate on whether we want one.

* See the consultation form on:
http://europa.eu/sinapse/directaccess/science-and-society/public-debates/nanon-recommendation

There is a tendency in Brussels, of which I have been a fully paid-up member, to view China’s herculean efforts to raise its R&D and innovation capabilities as worrisome and threatening to the European economy. With R&D spending having risen by 19 per cent a year since the mid 1990s and the country committed to building 100 “world class” universities in a couple of decades, the competitive challenge from China is clearly going to stretch way beyond consumer goods into high tech sectors.

However, a recent OECD report, produced in collaboration with MOST (China’s Ministry of Science and Technology), helps to dampen anxieties a little. Though Beijing has made “impressive strides” in building a science and technology system in the past 10–15 years, it still faces formidable challenges in breaking away from its centralised, state-controlled heritage. Money and effort is directed by a “top down” picking winners approach which focuses on research for new products at the expense of basic research. The result is neglect of innovation in the service sector as well as energy and environmental technologies. “China has a long way to go to build a modern, high performance national innovation system,” warns the OECD.

This is not necessarily a good reason for throwing our hats in the air because the world needs to integrate China into an increasingly global knowledge and innovation system. The OECD believes that such integration would yield a positive sum game in which a strongly innovative China would be a benefit to the “world at large”. The potential gains include solutions to the environmental problems China’s rapid growth is creating and more vigorous global competition in the production and application of new knowledge. It should also reduce frictions over and other issues.

I guess that this case needs to be stated at a time when tensions and discontent is focusing not only on fair and allegedly unfair competition from China but also on the quality of some of its products. Throw in concerns in the US and Europe about the effects of offshoring and “forced technology transfers” and you can see why the OECD may worry about a possible “reverting to protectionist pressures”. If the Democrats win control of the Congress and the White House next year, and Nicolas Sarkozy can persuade the EU to erect shelters for its citizens against rampant globalisation, then the smooth integration of China into the global innovation system will be severely disrupted.
Find the OECD report at www.oecd.org/dataoecd/54/20/39177453.pdf