The National Interest article "New Innovation Challengers" by Dan Steinbock concludes:
...The quest for the higher value-added is not easy to achieve; nor can IT be based on a short-term outlook. Sustained productivity advances require innovation-driven strategies and policies. Such steady and sustainable growth of China and India is in America’s interest. In the long term, the economic expansion of both emerging economies requires that their respective innovation strategies succeed. Instead of the past confrontational approach defined in terms of containment or protectionism, IT is in America’s interest to promote engagement with both China and India and facilitate the continued integration of these two vast emerging nations into the world economy. Engagement is also in the interest of U.S. business. U.S. corporate profits in China passed $2 billion the first six months of 2006, up more than 50 percent from the first half of last year.
Until recently, the “higher value-added” was the privilege of the entrenched multinationals in the United States, Western Europe and Japan. Today, emerging multinationals in China and India seek to convert cost advantages to more sustainable competitive advantages, often through innovation. The growth rates of innovation output—as demonstrated by the patent data—are impressive, even dramatic. Still, the development of these capabilities is not a sprint, but a marathon.
The long march has begun.