China and the United States have effectively switched places as the overwhelming leader in research in just two decades, ASPI’s latest Critical Technology Tracker results reveal.

The latest tracker findings, which can be found in a new report and on the website, show the stunning shift in research leadership over the past 21 years towards large economies in the Indo-Pacific, led by China’s exceptional gains. 

China led in just three of 64 technologies in the years from 2003 to 2007, but is the leading country in 57 of 64 technologies over the past five years from 2019 to 2023. This is an increase from last year’s Tech Tracker results, in which it was leading in 52 technologies. 

The US led in 60 of 64 technologies in the five years from 2003 to 2007, but in the most recent five year period, it was leading in just seven. 

Critical technologies have been on the agenda for US National Security Adviser Jake Sullivan’s visit to Beijing this week—the first visit by a US NSA since 2016. Meanwhile, dozens of countries are coming together in Australia for the third Sydney Dialogue on Monday to discuss issues around technology, security, cyber and global strategic competition.

Our results show India is also emerging as a key centre of global research innovation and excellence, establishing its position as a science and technology power. India now ranks in the top five countries for 45 of 64 technologies (an increase from 37 last year) and has displaced the US as the second-ranked country in two new technologies (biological manufacturing and distributed ledgers) to rank second in seven of 64 technologies. 

The latest Tech Tracker has updated results for 64 critical technologies from crucial fields spanning artificial intelligence, defence, space, energy, the environment, biotechnology, robotics, cyber, computing, advanced materials and quantum technology areas. The dataset has been expanded from five years of data (previously, 2018 to 2022) to 21 years of data (from 2003 to 2023).

The Tech Tracker is a data-driven website that reveals the countries and institutions—universities, national labs, companies and government agencies—leading scientific and research innovation in critical technologies. It does that by focusing on high-impact research—the top 10 percent of most highly cited papers. We focus on the top 10 percent because those publications have a higher impact on the full technology life cycle and are more likely to lead to patents, drive future research innovation and underpin technological breakthroughs.

Looking at the average share of annual global research across the 64 technologies (see Figure 1 below), shows us the astonishing inversion between the US and China in high impact research.

Figure 1: Average annual research share across the 64 technologies between 2003 and 2023.

China has made its new gains in quantum sensors, high-performance computing, gravitational sensors, space launch and advanced integrated circuit design and fabrication (semiconductor chip making). The US leads in quantum computing, vaccines and medical countermeasures, nuclear medicine and radiotherapy, small satellites, atomic clocks, genetic engineering and natural language processing. 

Another notable change involves the United Kingdom, which has dropped out of the top five country rankings in eight technologies, declining from 44 last year to 36 now. The technologies in which the UK has fallen out of the top five rankings are spread across a range of areas, but are mostly technologies related to advanced materials, sensing and space.

The European Union, as a whole, is a competitive technological player that can challenge the China-US duopoly. Like the US and China, the EU, when aggregating its member countries over the past five years, is in the top FIVE countries in all 64 technologies. With members of the EU aggregated over the past five years, we found that the EU leads in two technologies (gravitational force sensors and small satellites) and is ranked second in 30 technologies. 

Besides India and the UK, the performance of second-tier science and technology research powers (those countries ranked behind China and the US) in the top five rankings is largely unchanged: Germany is in the top five in 27 technologies, South Korea in 24, Italy in 15, Iran in 8, Japan also in 8 and Australia in 7.

In terms of institutions, US technology companies have leading or strong positions in AI, quantum and computing technologies. IBM now ranks first in quantum computing, Google ranks first in natural language processing and fourth in quantum computing, and Meta and Microsoft also place seventh and eighth in natural language processing respectively. The only non-US based companies that rank in the top 20 institutions for any technology are the UK division of Toshiba, which places 13th in quantum communications, and Taiwan Semiconductor Manufacturing Company, which places 20th in advanced integrated circuit design and fabrication.

Key government agencies and national labs also perform well, including the US National Aeronautics and Space Administration (NASA), which excels in space and satellite technologies. The results also show that the Chinese Academy of Sciences (CAS)—thought to be the world’s largest science and technology institution—is by far the world’s highest performing institution in the Tech Tracker, with a global lead in 31 of 64 technologies—an increase from 29 last year. CAS is a ministerial-level institution that sits directly under the State Council, and has spearheaded the development of China’s indigenous science, technological and innovation capabilities, including in computing technologies, nuclear weapons and intercontinental ballistic missiles. CAS also specialises in commercialising its findings and creating new companies. According to CAS, by 2022, more than 2,000 companies had been founded from the commercialisation of its scientific research.

Our report also looks at the combined US-UK-Australia performance in AUKUS pillar two-relevant technologies. It finds that combining AUKUS efforts with those of closer partners Japan and South Korea helps to close the gap in research performance for some technologies. But for others such as autonomous underwater vehicles and hypersonic detecting and tracking, China’s high impact research lead is so pronounced that no combination of other countries can currently match it. 

The graph below shows the share of research across a range of AUKUS pillar two-relevant technologies. (Please click on the image to see it full screen.)

We have continued to measure the risk that any country will hold a monopoly in a technology capability in the future, based on the share of high impact research output and the number of leading institutions in the dominant country—noting that for all 64 technologies, only China or the US currently has the lead. The number of technologies classified as ‘high risk’ has jumped from 14 technologies last year to 24 now. China is the lead country in every one of the technologies newly classified as high risk—putting a total of 24 of 64 technologies at high risk of a Chinese monopoly. 

Worryingly, the technologies newly classified as high risk include many with defence applications, such as radar, advanced aircraft engines, drones, swarming and collaborative robots and satellite positioning and navigation. See the below table for a small selection of critical technologies currently classified as ‘high risk’.

The new historical dataset shows the points in time at which countries have gained, lost or are at risk of losing their global edge in scientific research and innovation. It  provides a new layer of depth and context, revealing the performance trajectory countries have taken, where the momentum lies and also where longer term dominance over the full two decades might reflect foundational expertise and capabilities that carry forward even when that leader has been edged out more recently by other countries. The results also help to shed light on the countries, and many of the institutions, from which we’re likely to see future innovations and breakthroughs emerge.

In advanced aircraft engines, for example, US government or government-affiliated institutions performed strongly from 2003 to 2007—with NASA and the US Air Force Research Laboratory ranking first and second respectively—reflecting this technology’s clear relevance to military and space capability. Today, these institutions occupy much lower positions in the new rankings and 10 out of 10 of the world’s top-performing institutions are in China. 

When looking further down the science and technology life cycle, at patent data for example, our research finds there is a closer and more recent competition between the US and China but the overall trends are similar.

China’s dominant high impact research performance across so many technologies doesn’t necessarily equate to the same dominance in actualising those technologies. At times, China is ahead in high impact research because it’s actually behind in the development and commercialisation of that technology and is making major investments to try to catch up to the advances made by other countries over previous decades.

But the fact that China has enhanced its lead since last year’s Critical Technology Tracker results, especially in defence technologies, points to its growing momentum in science and technology, which other countries would be wise to assume will continue.

For some technologies, this inversion in research leadership has occurred because the high impact research output of pioneering science and technology powers such as the US, Japan, the UK and Germany has flatlined, putting them in a position where they’re losing—or at risk of losing—some of the research and scientific strengths they have built over many decades. Some of these long-term changes can be seen, for example, in the dwindling numbers of globally recognised—and sometimes Nobel Prize winning— research and development laboratories based in electronics and telecommunications firms across Europe—Philips of the Netherlands— and the US—AT&T Bell Labs previously known as Lucent Technologies or Alcatel Lucent and now as Nokia (US).

With other technologies, however, the shift is instead being driven by an enormous surge in China’s research outputs over the past 21 years. China has executed a dramatic step-up in research performance that other countries simply haven’t been able to match.

The historical strong performance of the US and other advanced economies in high impact research, which can now be tracked closely, is reflected in their sustained vitality. For example, the US shows continued innovation and leadership in key technology areas amidst immense competition, especially in quantum computing, and vaccines and medical countermeasures. This reflects its long term strengths across the full spectrum of the technology ecosystem. Decades of research effort can lead to decades of payoff in the application and commercialisation of the knowledge and expertise that a country has built up.

Measuring high-impact research, by itself, doesn’t provide a full picture of a country’s current technological or innovation competitiveness of course. Actualising and commercialising research performance into technological gains can be a difficult, expensive and complicated process, no matter how impressive the initial breakthrough. A range of other inputs are needed, such as an efficient manufacturing base and ambitious policy implementation.

But the purpose of the Tech Tracker is not to assess the current state of play but to improve global understanding of countries’ strategic intent and potential future science and technology capability.

Some observers might argue that China’s ascendance into a research power—indeed the research power—doesn’t matter because other countries, the US in particular, remain ahead in commercialisation, design and manufacturing. That might be true for some technologies, but it represents a very short term attitude. China, too, is making enormous investments in its manufacturing capabilities, subsidising key industries and achieving technological breakthroughs that are catching the world by surprise.

Our results serve as a reminder to governments around the world that building technological capability takes a sustained investment in, and accumulation of, knowledge, innovative skill, talent and high performing institutions—none of which can be acquired through only short term investments. In a range of essential sectors, democratic nations risk losing hard-won, long term advantages in cutting edge science and research—the crucial ingredient that underpins much of the development and progress of the world’s most important technologies. There’s also a risk that retreats in some areas could mean that democratic nations aren’t well positioned to take advantage of new and emerging technologies, including those that don’t exist yet. Meanwhile, the longitudinal results in the Tech Tracker enable us to see how China’s enormous investments and decades of strategic planning are now paying off.

The sugar hit of immediate budget savings must be balanced against the cost of losing the advantage gained from decades of investment and strategic planning. Strategic investments are needed in technologies that are identified as important to a country’s national interest. Continuous investments in those technology areas must then follow. And, of course, that must take place alongside complementary efforts that help build capability across the science and technology life cycle: targeted policies on issues such as skilled migration, industry reform and incentives to boost innovation, manufacturing capability and commercialisation opportunities.

Given the extent to which strategic influence will be determined by technological primacy, even the US has demonstrated that it needs trusted partners in research, innovation and industry to maintain an edge over major competitors such as China.

The Tech Tracker results show that countries can benefit from co-operation on technology by pooling their efforts and finding complementary and tangible areas in which to collaborate in an era when science and technology expertise is becoming increasingly concentrated in one country. Without bigger changes to the status quo, the trajectory laid out in this research will continue to be consolidated. 

Partners and allies must plan, act and collaborate more strategically and more ambitiously—indeed, this might be the only way to stay collectively ahead.

Biotechnology is one of the world’s biggest industries with a global market share estimated at over US$1.37 trillion (A$2.1tn) in 2022. The massive investment driven by the Covid-19 pandemic has helped boost the market to an estimated annual growth rate of around 14%, putting the expected value of the industry at US$2.44tn (A$3.8tn) by 2028.

ASPI’s Critical Technology Tracker update shows the intense competition between the United States and China in the sector which, along with artificial intelligence, is anticipated to deliver some of the most life-changing technologies over the coming decades.

The update adds four new technologies to the biotechnologies category: novel antibiotics and antivirals, genome and genetic sequencing and analysis, genetic engineering and nuclear medicine and radiotherapy. They join three existing fields in the tracker: vaccines and medical countermeasures, synthetic biology and biological manufacturing.

Our table collates the aggregated percentage of top 10% of highly cited papers in the different biotechnologies for different country groupings.

Of the four new fields, the US leads high-impact research in genetic engineering and nuclear medicine and radiotherapy, while China is ahead in genome and genetic sequencing and analysis, and novel antibiotics and antivirals. Among the previously reported biotech fields, China leads in biological manufacturing and synthetic biology and the US leads in vaccines and medical countermeasures.

In contrast to advanced sensors, the focus of our previous Strategist piece based on the tracker update, high-impact research in biotechnology is strong enough across likeminded nations that the leads established by China would be surmountable through joint efforts by the US and partners such as through the AUKUS agreement or with collaboration with Japan, South Korea and European nations in some combination.

The notable and worrying exception is synthetic biology, in which China produces 52.4% of high impact research and has nine of the top ten ranked institutions, giving the field a high monopoly risk rating. China’s strong performance in synthetic biology is almost twice the percentage of the AUKUS alliance combined with South Korea and Japan. This would be hard to beat even with a multilateral alliance including Europe. Irrespective of technology monopoly risks, the biotechnologies involving gene manipulation need international cooperation on the ethical issues and consensus on appropriate norms to minimise potential biohazard risks.

Synthetic biology is perhaps the most nascent of the biotechnologies and, as an emerging technology on par with quantum, is an area of interest for China with funded research at several institutions including CAS. The field involves redesigning living organisms into ones with new functions with applications in medicine, manufacturing and agriculture. The main distinction between synthetic biology and genome editing is that compared to genome editing, synthetic biology can involve the insertion of longer sections of DNA with the possibility of creating an entirely different organism like a recoded E. Coli.

Lab grown meat is another example of synthetic biology, as is engineering of stem cells into mini robots. Thus, synthetic biology, especially when engendering artificial lifeforms, must be regulated like genome editing and AI with multilateral expert input on where regulations would benefit from a US-Sino dialogue.

Biotechnology encompasses technologies that integrate biology and engineering into new products and processes leading to improved outcomes in health, manufacturing and society. The financial incentives to gain advantage in the sector are enormous given most countries spend more than 6% of the annual gross domestic product on healthcare, which accounts for more than 50% of the biotech industry.

Reflecting the importance governments are attributing to the industry, the United States, Australia, India and Japan are renewing their national biotechnology strategies.

China has listed biotechnology as one of its seven strategic emerging industries in 2010. In its 13^th Five-Year plan (2016-2020), China’s Ministry of Science and Technology released a comprehensive biotechnology development plan.

The Covid-19 pandemic brought vaccines and medical countermeasures to the forefront. The US has an exceptionally strong lead in this technology with eight of the top institutions being US-based (with the University of California system as the top research institution).

The Critical Tech Tracker reveals the strong performance of the Middle Eastern countries of Iran, Egypt and Saudi Arabia in novel antibiotics and antivirals. The development of novel antibiotics and antivirals is important both in treating and suppressing infection and diseases. Antibiotics are used not only to treat infections but also to suppress secondary infection during surgeries, thus saving millions of lives. However, the overuse and misuse of antibiotics in the modern world have given rise to drug resistant infections that cannot be treated. Antibiotic resistance is a global threat not only to human health but also to food security, due to its widespread use in animal husbandry and fish farming. The World Health Organisation has called for action to formulate, strengthen and implement policies and procedures to tackle this crisis at all levels.

The University of California is the top institution in three of seven biotechnologies, with a strong lead in both genetic engineering and genome and genetic sequencing. The most significant breakthrough in the two interconnected technologies is the CRISPR gene editing technique pioneered at the University of California Berkeley by Jennifer Doudna and Emmanuelle Charpentier (2020 Nobel Prize winners in Chemistry). The CRISPR-Cas9 technique is set to revolutionise biomedicine, notably the treatment of genetic diseases, by deleting a section of DNA or turning off the gene causing the disease.

Genetic editing and engineering are biotechnologies fraught with ethical concerns, especially when applied to the human genome. There are high-level risks associated with gene editing. For example, the CRISPR-Cas9 technique is not error-proof as the process can insert or delete DNA letters at the points of insertion, potentially leading to a mixture of different versions of the edited cell. The possibility of developing a severely sick baby or a Frankenstein-like monster is no longer far-fetched.

A 2019 report on CRISPR in China has shown that the US is ahead of China by a fingernail on the number of CRISPR patent applications and China catching up on publication numbers and citations.

The tech tracker analysis shows immense competition between China and the US. For example, the US is ahead of China in genetic engineering and China is ahead in genome and genetic sequencing. China’s research in these biotechnologies has focused on agriculture, specifically transgenic crops and animal organs for human transplant. Unsurprisingly, the tech tracker data in these two biotechnologies shows the prominence of agricultural universities as well as biomedical institutes, hospitals and cancer treatment institutions. The established link between cancer and genes has made CRISPR an invaluable tool for cancer research and treatment.

Biological manufacturing, commonly known as biomanufacturing, is defined as processes that incorporate living cells in the commercial production of biomaterials and biomolecules (for use in medicine). China and the US are in first and second place respectively, while India is in third place and has two top-ranked institutions with the Indian Institute of Technology edging ahead of the Chinese Academy of Sciences (CAS), and the Indian NIT securing the third place. India has had a national biotechnology development strategy since 2000 with continuous renewal strategies since, and it aims to become a Global Biomanufacturing Hub by 2025. 

The technologies led by the US are not an immediate threat to Australia with its multilateral alliances in the Quad and AUKUS. The aggregated percentage for a Quad and South Korea alliance outranks China for novel antibiotics and antivirals and biomanufacturing. In the China led biotechnologies (other than synthetic biology), a Quad and South Korea alliance can reverse China’s dominance, with the AUKUS, Japan and South Korea alliance performing the best in genome and genetic sequencing. Our analysis also shows that in the aggregation of the seven biotechnologies, China (27.0%) has a slight lead over the US (25.2%) followed by the United Kingdom (4.2%), Germany (4.1%) and India (4.1%).