Who is ahead in the global tech race?
Of all the sectors, AI gets the most attention from politicians. J.D. Vance, America's vice-president, recently called its development an 'arms race". America commands a strong lead thanks to its early breakthroughs, its head start in building computing power and the dominance of firms such as OpenAI and Nvidia. But China's DeepSeek R1 rivals Western models at a fraction of the cost. China's loose attitudes towards data privacy, and its deep pools of talent in computer science and engineering, give it an edge. In 2023 Chinese researchers produced around 23% of all published papers on AI—more than Americans (9%) and Europeans (15%).
India, long tipped to be a world tech power, ranks tenth overall, and seventh for its development of AI. It has plenty of engineering talent and hundreds of millions of internet users. But weak investment and a scarcity of training data needed for large language models has slowed its progress. So far, India has yet to produce a major AI breakthrough.
The AI race runs on semiconductors, which carry the most weight in the index. America's lead here is narrower: it is ahead in chip design but East Asia remains the industrial centre of gravity. China, Japan, Taiwan and South Korea each beat America in manufacturing capacity and access to specialised materials (see chart 1).
But a country can score highly on manufacturing without producing cutting-edge chips. China, for example, has no advanced-node facilities (factories capable of making the most complex chips) yet it ranks well thanks to the sheer scale of its lower-end chipmaking. The index also misses critical chokepoints in the global supply chain. ASML, based in the Netherlands (ranked 15th), is the sole maker of the world's most advanced chipmaking machines. Taiwan (8th) is home to TSMC, which churns out up to 90% of the most powerful transistors.
In other fields the top spot is more closely contested (see chart 2). America still leads in biotechnology because of its strengths in vaccine research and genetic engineering. But China is ahead in drug production, and has a larger cohort of biotech scientists. Over the past decade China has dramatically increased its biotechnology research capabilities. If this trend continues, China could soon pull ahead. Europe again underwhelms: its academic strengths have not translated into commercial success. Russia's highest score comes in the space sector, a legacy of the Soviet era, but it falls short everywhere else.
America's lead in critical technologies once felt unassailable. But the Trump administration risks undermining that position: by deterring top foreign talent and cutting research funding it will sap the flow of ideas that have sustained America's position at the top. (The Harvard researchers behind the index will be no strangers to Donald Trump's attack on universities.)
China's rise, meanwhile, has been swift and co-ordinated. Its AI push focuses on practical use over theoretical breakthroughs. The next phase of global power may be decided not just by who invents the most powerful tools, but by who puts them to work first.
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