Chinese Lessons In How Not To Invest In Technology

In China, there is no shortage of economic commitment to research and technical advancement. But state graft and insider favors drive the process rather than a pure pursuit of innovation.

In a welding workshop in Suzhou, eastern China
In a welding workshop in Suzhou, eastern China
Liu Jinsong

BEIJING — China is one of the world's top investors in technological research, having spent $193 billion in 2013. Nearly half of that money ($80 billion) was funded by the state. Yet it continues to lag behind with regards to scientific innovation, ranking only 19th in the world. China's scientific and technological achievement transformation rate, futhermore, is a mere 10%.

The quality of China's scientific papers, the most basic proof of its research performance, also reflects a vexing truth. According to data from the Institute of Scientific and Technical Information of China, each Chinese scientific paper is on average cited 6.92 times, whereas the world average is 10.69 times. That is to say that although China is at the forefront of the world in spending on scientific research, its research quality and results are not even reaching the global average level.

So why is China's research output efficiency so poor? The reasons are multifold, but the most critical of all is the seriously unreasonable distribution of research funding. As numerous recent cases suggest, much the funding is simply being misappropriated.

Just a few days ago, Zhang Lixin, a former professor at Beijing Normal University, was given an 11-year sentence for graft. Not only did he use his students' names to gain payment for labor and inflated contract expenditure, he also used the illicit money to buy himself a sports car.

Chen Yingxu, director of the Water Environment Research Institute of Zhejiang University, took advantage of a national program for river research to falsify budget invoices and accounts and reallocate nearly $1.5 million into the accounts of a shell company he controlled.

And when a task force from Shandong University of Finance was set up to research regional tourism and planning, the staff amused themselves, in the name of travel expenses, by journeying between towns that had nothing to do with the project. The train tickets, as many as 1,505 of them billing in at approximately $45,000, accounted for nearly 50% of project's total budget.

These examples are just the tip of the iceberg. When one looks into China's research funding, one discovers that though the expenditure is nowhere trivial, the baffling amount of theft is also stunning — vehicle purchasing, house building, furnishings, welfare, bonuses and study tours abroad. In brief, all personal benefits justify the use of research funds. As the China Association for Science and Technology's survey shows, in China only 40% of research funds are used for research. It's no wonder that although huge financial investments are put in, China doesn't yet have much to boast about with regards to its scientific and technological output.

To put an end to corruption and waste in China's grotesque embezzlement of research funds it is imperative that good institutional construction starts right from the roots. Most important of all is the establishment of a unified reporting and oversight channel. At present, China's research programs are mostly managed in a diffuse way. Different fields of research are supervised by different departments. Due to poor communication and coordination between various departments, research efficiency is low while oversight is difficult.

In addition, a research funding publication system should be put in place. Except for research involving state secrets, all research projects should publicize the use of funds in detail so that the responsible authorities, their peers in the same field, and the community at large can conduct a multi-faceted supervision.

Finally, Chinese authorities ought to reduce administrative intervention and set up a professional project evaluation mechanism. Currently, China's scientific management system remains government-led. Lacking a capacity to assess research achievement, more emphasis is put on the process of supervision. As long as one manages to fix the authoritative departments, one will have a whole series of green lights — from the approval of the project subject to the funds to the final review of the research.

In short, only if China can separate administrative power and academic authorities, and introduce a fair and open evaluation system of expertise, can it guarantee that the billions being pumped into scientific research will yield a corresponding output.

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How Facebook's Metaverse Could Undermine Europe's Tech Industry

Mark Zuckerberg boasted that his U.S. tech giant will begin a hiring spree in Europe to build his massive "Metaverse." Touted as an opportunity for Europe, the plans could poach precious tech talent from European tech companies.

Carl-Johan Karlsson

PARIS — Facebook's decision to recruit 10,000 people across the European Union might be branded as a vote of confidence in the strength of Europe's tech industry. But some European companies, which are already struggling to fill highly-skilled roles such as software developers and data scientists, are worried that the tech giant might make it even harder to find the workers that power their businesses.

Facebook's new European staff will work as part of its so-called "metaverse," the company's ambitious plan to venture beyond its current core business of connected social apps.

Shortage of French developers

Since Facebook CEO Mark Zuckerberg announced his more maximalist vision of Facebook in July, the concept of the metaverse has quickly become a buzzword in technology and business circles. Essentially a sci-fi inspired augmented reality world, the metaverse will allow people to interact through hardware like augmented reality (AR) glasses that Zuckerberg believes will eventually be as ubiquitous as smartphones.

The ambition to build what promoters claim will be the successor to the mobile internet comes with a significant investment, including multiplying the 10% of the company's 60,000-strong workforce currently based in Europe. The move has been welcomed by some as a potential booster for the continent's tech market.

Eight out of 10 French software companies say they can't find enough workers.

"In a number of regions in Europe there are clusters of pioneering technology companies. A stronger representation of Facebook can support this trend," German business daily Handelsblatt notes.

And yet the enthusiasm isn't shared by everyone. In France, company leaders worry that Facebook's five-year recruiting plan will dilute an already limited talent pool, with eight out of 10 French software companies already having difficulties finding staff, daily Les Echos reports.

The profile of Facebook founder Mark Zuckerberg displayed on a smartphone

Cris Faga / ZUMA

Teleworking changes the math

There is currently a shortage of nearly 10,000 computer engineers in France, with developers being the most sought-after, according to a recent study by Numéum, the main employers' consortium of the country's digital sector.

Facebook has said its recruiters will target nations including Germany, France, Italy, Spain, Poland, the Netherlands and Ireland, without mentioning specific numbers in any country. But the French software sector, which has so far managed to retain 59% of its workforce, fears that its highly skilled and relatively affordable young talent will be fertile recruiting grounds — especially since the pandemic has ushered in a new era of teleworking.

Facebook's plan to build its metaverse comes at a time when the nearly $1-trillion company faces its biggest scandal in years over damning internal documents leaked by a whistleblower, as well as mounting antitrust scrutiny from lawmakers and regulators. Still, as the sincerity of Zuckerberg's quest is underscored by news that the pivot might also come with a new company name, European software companies might want to start thinking about how to keep their talent in this universe.

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