SIEMENS

Has research and development become a globalized process?

Wong: The effect of globalization is more important to development than to research. To me, research is mainly an individual activity that involves the search for knowledge and making path-breaking discoveries. Globalization may mean more people are doing research, but the gains have been in quantity, not quality. It is development, with its emphasis on serving the individual needs of multiple markets, where globalization has made a major difference.

How does globalized development affect creativity?

Wong: First of all, creativity is absolutely important in the entire enterprise, but particularly so in the front end where ideas are conceived. No good research can be conducted without a high degree of creativity. Beyond that, I would say that creativity is much less process dependent and much more culture dependent than other elements in R&D. Creativity varies a great deal from country to country. It is not intelligence dependent. But it is very dependent on the kind of education people get. Take China, for instance. The gene pool is very rich. But the culture, in terms of encouraging creativity, is much less so. It has never fostered the ability to think out of the box.

Are you suggesting that China isn’t as much of a threat as people think?

Wong: It is a threat from many points of view, but not in terms of originating truly novel ideas or major, new industrial sectors. China shows no sign of being able to do this. I believe that this is very much the result of cultural and educational factors, and these are not things that are likely to change overnight. Furthermore, the Chinese have no incentive to change. Entirely new ideas and industries represent a higher risk and require a longer latency period before providing results. It is easier and quicker for China and other Asian economies to get into the game by exploiting new business models than by coming up with genuinely new technologies.

Does globalization of R&D vary from sector to sector?

Wong: Absolutely. There are huge differences in terms of the extent of globalization of research and development between, say, information-technology-driven areas on the one hand, and biotechnology on the other. For instance, although we see ever-growing digitization of information, I don’t think nature has been digitized. Those technologies that are based on the chemical, biological and physical sciences are really a different ball game. They still follow the old rules. They are still laboratory based. They are of course aided by computing power, but they are far less prone to being globalized.

By and large, is R&D a good investment?

Wong: Historically, public funding of R&D — particularly research — has produced high social returns, i.e. quantifiable socio-economic benefits, to the communities that provide the investment. Some of the benefits are indirect, and education stands out as a particularly important case. However, it is becoming a challenge for communities around the world to provide the opportunities for well-educated students to fulfill their expectations. Ultimately, creating jobs that match people’s potential must be both a major goal for public R&D funding and a central focus of public policy in every country.

There’s a lot of discussion in the U.S. now about whether the country is investing enough in R&D. Is it?

Wong: Well, there is a big difference between being tight fisted and being cheap. Governments must never forget that what they spend on R&D is taxpayers’ money. I believe that governments are right to be tough minded, but visionary, in managing this money. I believe that funding must be focused and strategic. Regarding the U.S. in particular, I would say that R&D is not one of the areas we are failing in. I think the level of innovation here is very, very high, but to sustain it will require continued generous funding and enlightened public policy.