Technological Systems and Nationalism

Last week we talked about technological systems in class.  In recent weeks there have been articles showing how difficult it is to compete against or replicate fully developed technological systems.  Both examples involve China.  The New York Times reported that four years ago the Chinese leader, Xi Jinping,  launched a major initiative to make China self-sufficient in semiconductors, saying that semiconductors were to manufacturing what the heart was to the human body.  However this effort seems to have largely failed.  The New York Times attributes this failure to the global and highly specialized nature of the semiconductor industry, asserting ” The chip industry is highly complex and interconnected. It depends on an integrated global supply chain and draws upon expertise from different regions: design in the United States; manufacturing in Taiwan and South Korea; assembly, packaging and testing in China; and equipment from the Netherlands. The comparative advantages of each region were built with decades of capital expenditure and research and development.”  These regions have developed specializations over decades and it is unrealistic to think that China can quickly reproduce them.  The article goes on to quote a former manager at Intel saying “Semiconductors represent the highest form of human engineering achievement. They are the most difficult thing we create as a species. How can one country ‘win it all’ by itself?”  Twenty years ago I wrote a book on the development of the semiconductor industry and it was almost exclusively an American story.  That’s no longer true.  As the United States tries to bring back some semiconductor manufacturing and semiconductor competences through the CHIPS act,  it is a reminder to the US as well, that technologies are highly globalized.  A tension that has developed and that will continue to play out over your careers is the tension between nationalization and globalization.

A similar story is playing out for China in aviation.  James Fallows reports the numerous obstacles China has faced in developed a globally viable commercial aviation industry.  He observes that almost all the subassemblies in the first major Chinese jetliner were made in the West, not in China.  He further notes that Airbus and Boeing have built enormous systems for training and maintenance that China cannot match.  So far China’s sales of its commercial jetliner have been largely limited to Chinese airlines.  Fallows makes the intriguing (especially given our reading for the week) prediction that China will likely land a person on the moon before it becomes a major player in global commercial aviation.  That is in some sense “easier.”