China’s IP Development and

R&D Investment

Made in China 2025 Conference

January 15, 2019

141.9 144.4 145.6149.6

144.4 142.5

131.5136.6 138.3

149.3

128.5

27.1

35.4

44.6

60.3

74

88.9

98.3105.1

112.5116.8

124.2

0

20

40

60

80

100

120

140

160

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

US vs. China in Government R&D Spending

U.S. Federal R&D Spending Chinese Government R&D Spending * in billions of current USD

Is State Sponsorship of R&D Unique to China?

2

The world’s top 20 companies by their total R&D Investment in 2018

3

* Source: The 2018 EU Industrial R&D Investment Scoreboard

4

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4.00

6.00

8.00

10.00

12.00

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2010 2011 2012 2013 2014 2015 2016 2017

R&D Spending (US$ in Billions)

Apple Cisco Ericsson Huawei Nokia Qualcomm Samsung

* Data extracted from respective annual reports of the above companies

5

3.00%

13.20%

9.70%

5.88%

2.00%

13.50%

11.60%

6.03%

2.00%

11.90%

13.50%

5.73%

3.00%

12.20%

13.20%

6.46%

3.00%

13.40%

14.20%

7.43%

3.00%

12.60%

15.10%

7.40%

5.00%

12.80%

14.60%

7.33%

5.00%

12.60%

14.90%

7.01%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

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2010 2011 2012 2013 2014 2015 2016 2017

R&D Spending (Percentage to Net Sale)

Apple Cisco Huawei Samsung

* Data extracted from respective annual reports of the above companies

Who filed the most PCT patent applications in 2017?

6

* Source: World Intellectual Property Organization (WIPO)

SonyHuawei ZTE Intel Mitsubishi Qualcomm LG BOE

TechnologySamsung Sony LM Ericsson

JAPANCHINAU.S. GERMANY REPUBLIC OF KOREA

FRANCE U.K. SWITZERLAND NETHERLANDS SWEDEN

7

GPS• Initially developed by DoD by for military

purpose in the 1970s1

• Allowed for civilian applications in the

1980s 2

• Congress provided over $1.42 billion to

fund the Air Force GPS program in Fiscal

Year 2019 ($1.18 billion in 2018)3

• Personalized Assistant that Learns (PAL), funded by

DARPA4

• A cognitive computing systems to make military

decision-making more efficient and more effective5

• Siri Inc. was launched in 2007 to put the technology

to civilian use, later acquired by Apple Inc. 6

1.2. See Wikipedia. https://en.wikipedia.org/wiki/Global_Positioning_System

3. See gps.gov. https://www.gps.gov/policy/funding/2019/

4,5.6. See Personal Assistant That Learns (PAL), DARPA. https://www.darpa.mil/about-us/timeline/personalized-assistant-that-learns

8

Touchscreen

• Invented by scientists funded by

NSF and CIA/DCI7

• The inventors founded the

company FingerWorks8

• Acquired by Apple in 20059

Internet

• Started as Arpanet - an unprecedented network of

computers10

• Initially funded by DARPA11

• A decentralized communication system sought

during the cold war, to survive envisioned enemy

attack12

7.10. See The iphone at 10: how the smartphone became so smart, BBC News, https://www.bbc.com/news/business-38320198

8.9. See Wikipedia https://en.wikipedia.org/wiki/FingerWorks

11.12. See Encyclopædia Britannica, https://www.britannica.com/topic/ARPANET

DRAM Cache

DARPA

Lithium-ion

batteries

DoE

Signal Compression

Army Research Office

Liquid-crystal

Display

NIH, NSF, DoD

Micro Hard Drive

DoE/ DARPA Microprocessor

DARPA

Click-wheel

CERN

SIRI

DARPA

First Generation

iPod

(2001)

iPod Touch and

iPhone (2007)

iPad (2010)

HTTP/

HTML

CERN

Multi-touch Screen

DoE, CIA/NSF DoD

NAVSTAR-

GPS

DoD/NAVY

Cellular Technology

US Military

Internet

DARPA

What Makes an iPhone so Smart?

9* See Mariana Mazzucato, the Entrepreneurial State, Public Affairs, 116, (2013)