The U.S.-China Innovation Gap: The Chinese Advantage of Backwardness

Latecomers in the economic development process can leverage existing innovations and technologies available globally. This paper examines China’s "advantage of backwardness" using data on innovation provided by the Global Innovation Index (GII), published by the World Intellectual Property Organization (WIPO). I develop a simple theoretical framework to explain the advantage of backwardness and apply this to analyse China’s innovation gap with the United States. The analysis assumes that the United States represents the leading country in innovations. This assumption enables a comparison between the two large economies and tests a hypothesis with not only economic but also purported political and military implications. According to the theory of backwardness, China’s innovation level is converging with that of the United States. This raises the question: can China’s innovation level eventually surpass that of the United States? In other words, if China is developing by capitalizing on its technological backwardness relative to the United States, can it, at some point, become the global leader in innovations? This paper explores this question by analysing 18 observations spanning the period from 2007 to 2024, offering a speculative perspective on whether China can surpass the United States in innovation leadership. Keywords: Advantage of Backwardness, GII index, WIPO, US, China, Innovation, Technology, Leadership, Development