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America Is Losing the Shoe Race with China
CSIS's Jim Lewis discusses U.S.-China competition and debunks misconceptions about what actually creates national power.
In 1969, the Departments of Treasury, Commerce and Agriculture warned President Nixon that a powerful new economic entity, the European Union, would displace the United States. Instead, they relied on picking illustrative metrics, usually proxy indicators that provide an indirect measurement of technological success.One recurring problem is the tendency to measure inputs rather than outcomes.A politician may have great staff and spend more on an election, but the ultimate metric is how many votes are received.Claims that the Unites States is falling behind China in 5G because China has deployed more base stations or has more 5G enabled phones reflects a similar confusion over metrics.It is not the number of base stations that is important, it is the ability to use 5G to create new goods and services (or be more efficient in the use of existing goods and services) that is important, and this is best measured by the monetization of new 5G enabled services and products and their revenue. Better measures of success include market share (meaning someone actually buys what you are making), the number of startups (particularly ‘unicorns’), revenue, and the long-term trend in national income.
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