Which Nation Has the Best 'Technik'?

Harvard Business Review | June 12, 2012

By Ayesha Khanna and Parag Khanna

Five thousand years ago, use of the wheel began to spread from Mesopotamia across Eurasia, revolutionizing transport and enabling chariot warfare. A millennium ago, the stirrup enabled Genghis Khan's Mongol hordes to conquer most of Eurasia (coming from the other direction) at unfathomable speed. Paul Kennedy's seminal Rise and Fall of the Great Powers captures the way technological and economic advances have converted into strategic advantage, and how failure to "lock in" that edge accelerates imperial decline. Over the past three centuries, the spread of industrial technologies gradually weakened Britain while stimulating the United States. The West defeated the Soviet Union not through warfare but by maintaining a superior economic system with higher technological standards. China's late-20th-century rise is very much the unfinished business of the Industrial Revolution.

The early 21st century looks to be a time when such geotechnology matters more than ever — outweighing traditional power determinants like geopolitics and geoeconomics. Indeed, China is a superpower today not because it has twice as many nuclear weapons as it had two decades ago, but rather because it has come to dominate manufacturing through manpower, ingenuity and espionage, has generated massive surpluses from it, and now invests those profits in military hardware and other advanced technologies. A decade from now we may look back at China's 12th Five-Year Plan as the seminal document of the early 21st century. It pledges $1.5 trillion in government support for seven "strategic emerging industries," including alternative energy, biotechnology, next-gen IT, high-end manufacturing equipment, and advanced materials. China invented none of these fields, but outstrips all competitors in attempting to improve and deploy them at scale.

Does this mean China will succeed in achieving geotechnology dominance? That all depends on itsTechnik. The English language lacks an equivalent for this German word, which denotes not only technologies themselves but also the skills and processes surrounding them. Technik unites the scientific and mechanical dimensions of technology (determinism) with a necessary concern for its effect on humans and society (constructivism). Technik, then, is the technological quotient of civilization.

Technik is about adaptability: the capacity to harness emerging technologies to improve our circumstances. In a world of such diverse political forms — democracies, monarchies, authoritarian states — we will increasingly differentiate societies on the basis not of their regime type or income, but of their capacity to harness technology. Societies that continuously upgrade their Technik will thrive.

When standards of living are perpetually threatened by technological shifts, shouldn't Technik be a factor in evaluating societal stability? The contrast between the U.N.'s Human Development Indexand the standard economic measure of per capita GDP illustrates just how important it is to develop a neutral, long-term-focused metric for progress. Many wealthy societies have low human-development scores (e.g., Arab petro-states), while China's score is rising quickly even as its per capita income remains modest. We should layer on technology-focused criteria as well, such as the World Economic Forum's Network Readiness Index, which assesses the quality of individual access, government regulation, and business investment along more than 50 indicators. Not surprisingly, Sweden, Singapore and Finland are at the top, but interestingly, technocratic China scores higher than democratic India, and India higher than Italy. Good Technik requires a combination of the attributes that deliver high human development, economic growth, political inclusiveness, and technology preparedness.

Which societies display the best Technik today?

The United States is home to some of the key pioneers of Technik whose innovations help society adapt to the future. Semiautonomous government agencies such as the Defense Advanced Research Projects Agency have invented technologies — from the Internet to robotic exoskeletons — that eventually gain widespread application. Most of the world's "silicon superpowers" are also American: IBM, Google, Cisco, Apple, Microsoft and more. Those companies' hardware and software platforms are the foundation for almost endless innovation by diverse users worldwide, a contribution no Europeans or Asians can match.

But America's edge is eroding fast as it struggles to keep first-mover advantage over its innovations. The U.S. share of global R&D has, like its share of global GDP, fallen to around 20 percent, and since not enough of those funds are devoted to commercialization initiatives, the United States sometimes has to buy things it invented a decade ago from competitors abroad. Science and engineering have become devalued amongst American students and policy-makers.

Given the high proportion of Asian leadership with science, engineering and math backgrounds, and their countries' export-led growth creating sizable surpluses, it is no surprise that first Japan, and then Korea and China, have invested heavily in infrastructure to catch up with — and potentially surpass — the West. Japan already has the three fastest cities in the world ranked by speed of Internet connection. Singapore has launched Biopolis and Fusionopolis zones to capture the edge in life sciences and immersive media. Korean children learn English from robots and become proficient in programming at early ages.

Even though emerging markets have yet to reproduce the broad-based alchemy of the Silicon Valley ecosystem, they are rapidly training and recruiting the elite slice. In fast-growing economies around the world, a small but growing cadre of innovative, entrepreneurial companies are driving most job and revenue growth. In the decades ahead, not only will the time gap between invention and innovation narrow, but the flow of both will increasingly balance between East and West.

If America wants to keep its edge, it will need all hands on deck to promote national Technik. For its part, the Obama administration has recently launched high-level initiatives around robotics, advanced materials, and nano-technology. Crucially, it has done this with the nation's key companies and universities that have already demonstrated tremendous adaptability. Consider IBM, perhaps the leading example of how firms themselves can upgrade their Technik. Having spun off its hardware production divisions over the past decade, IBM now invests in artificial intelligence, nanotechnology, clean energy, and devices for high-tech health care.

Universities must also strengthen their role in boosting Technik in America. Scientists and engineers from MIT, Stanford, Carnegie Mellon, and other universities are already playing a crucial role. But business schools can and should do more. In recent years, business schools have been faulted for being behind the curve in teaching real-world management skills such as leadership, ethics, and navigating political risk. Technology belongs on that list as well. Case studies around corporate adaptation to technology — or the lack thereof — should feature much more prominently. As businesses size up their competition, they should be comparing themselves on the basis ofTechnik above all else. There would be no better preparation for the emerging era of geotechnology competition.

Ayesha Khanna and Parag Khanna are co-directors of the Hybrid Reality Institute, a research and advisory group focused on the implications of emerging technologies, and authors of Hybrid Reality: Thriving in the Emerging Human-Technology Civilization (TED Books, 2012).

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