Technological innovation: essential to national policy

The dissection of the cells of torpedo fish into their negative and positive charges gave the inspiration for the creation of the first battery by the Italian scientist Alexander Volta in 1800. The storage of electricity created electro-magnetic power and later telegraphy, which together with the invention of the steam engine launched the industrial and telecommunication technology revolution in the West.  

How was a former civil servant able to finance such a scientific expedition? The curious history was that Walsh was the former secretary to Lord Clive, the conqueror of India for the British Empire. Walsh was awarded 56,000 pounds for his contribution to the British victory at the 1757 Battle of Plassey, when the Indians and their French allies were defeated. Walsh returned to England with an estimated fortune of 147,000 pounds (equivalent to over US$12 million today, but probably much more, since property in those days was much cheaper) and became a scientist. The Battle of Plassey was won partly because the British bribed the leading general of the Nawab of Bengal to change sides for 60,000 pounds, which surely meant that what Walsh received was a ransom for a kingdom. Clive returned to Britain with a fortune of at least 300,000 pounds. It paid to be conquerors.

At the end of the 18th century, the difference in population and GDP size between the East and the West was amazing. There is no accurate data for 1760 or 1800, but according to the leading economic historian Angus Maddison, the population of Western Europe in 1820 was only 133 million, whereas China had 381 million and India 209 million. The US population was only 10 million. At that time, China accounted for 32.9 per cent of world GDP, compared with 16 per cent for India, 23 per cent for Europe and 1.8 per cent for the US. By 1950, when China and India became new republics, they had declined respectively to 4.5 per cent and 4.2 per cent of world GDP, whereas the US accounted for 27.3 per cent and Western Europe 26.2 per cent. 

The difference could not have been more contrasting in terms of knowledge and economic power. The Chinese Imperial Encyclopaedia, commissioned by the Emperor Kangxi in 1800 and completed after 26 years, comprised all extant knowledge in China at that time and comprised 10,000 volumes and 170 million characters. But that knowledge was useless in the face of superior scientific and practical technology that propelled the West in the Industrial Revolution.

Why China did not build on her scientific achievements to compete with the West is a question that has puzzled many historians. The Sinologist, Joseph Needham, who compiled the famous Cambridge Science and Civilisation of China, did not fully answer that question, today called the Needham Puzzle. 

One of the Chinese historians who worked temporarily with Needham was Professor Ray Huang. In his 1988 book, China: A Macro-History, he argued that despite the glorious achievements of the three Qing Dynasty emperors, Kangxi (reigned 1661-1722), Yongzheng (1722-1735) and Qianlong (1735-1796), they were in governance terms, “anachronistic”. They did not invent modern fiscal tools or monetary policy, and because governance remained backward or mathematically unmanageable, “China remained a conglomeration of village communities”. In short, China may have been large in size, but did not advance institutionally in modern governance terms. 

Simon Winchester, recent biographer of Needham, argued that the sum of conclusions of various Western historians on why China failed to hold on to its early advantage in science and creative edge was that “China, basically, stopped trying”.

Western historians seem to have difficulty answering why this was the case, blaming it on the state being too large, the lack of scientific curiosity of Confucian training, group-think, or simply because the West achieved critical mass in terms of competing in scientific research. 

Scientific innovation, leading to military and industrial power, was central to the rise of the West, since the US and European states were competing vigorously in economic, commercial and political terms. The incentives for mercantilism and imperialism were also driven by religion, as articulated by Richard Tawney (1880-1960) in Religion And The Rise of Capitalism (1926). But the reality was that the rise of the West was created by merchant/adventurers like Christopher Columbus and Clive, who took huge risks and had little to lose.

The most interesting answer for the Needham puzzle is provided by Professor Qian Mu (1895-1990), a self-taught historian famous for his book, The Political Mistakes Of Chinese Dynasties (1982), translated as Traditional Government in Imperial China: A Critical Analysis. He argued that the Chinese state became inward looking because the Qing Dynasty (1644-1911) was essentially a colonial administration, with the Manchu government more concerned with maintaining domestic control over the Han masses, rather than any threat from external forces. The focus of attention of the Qing emperors was therefore on maintaining Manchu control of the military, the civil service and social stability, rather than any scientific and industrial revolution that may overthrow their social domination. The Qing Dynasty took no risks and imploded.    

The issue of technological innovation is clearly central to national economic policy today. The Internet has transformed the game because knowledge has become widely available to all, but it is not clear which countries are able to exploit that knowledge. The commercialisation of knowledge is no longer confined to nations, but to global supply chains, enabling small and medium-sized enterprises to plug in and play in global markets. Incubating scientific, technological and commercial innovators is clearly the next Great Game.  

But can innovation be created by deliberate policy, or will it be spontaneous accidents of history, funded by former civil servant/scientists like John Walsh? 

That is the 64 trillion-dollar question.

 

Andrew Sheng is president of the Fung Global Institute.