How Culture Gives the US an Innovation Edge Over China

Collectivist societies excel at production, while individualistic cultures nurture more invention.

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For centuries, great powers have been looking over their shoulders, certain that somebody is gaining on them. In the late 1800s, Imperial Germany’s ascent unnerved Great Britain, the technology leader at the time. Today, alarm bells are ringing in Washington, D.C., where China’s rapid recovery from the coronavirus pandemic has cemented the notion that it will inevitably replace the United States as the world’s leading economic superpower. Some now speak of a Beijing consensus rather than a Washington consensus.

Both the Anglo-German and China-U.S. rivalries emerged during periods of rapid globalization and technological progress, as many have observed.1 Both pit a rising autocracy against an established democracy — so, not surprisingly, much of the discussion of China’s surge has focused on the relative merits of a state-led economy and a free market. However, arguments that China’s state-led economic policies are superior to the United States’ laissez-faire capitalism, or vice versa, tend to ignore context altogether. The countries’ economic models did not emerge in vacuums but rather evolved in societies with distinct cultural and psychological traits.

Innovation and Individualism

Scholars have only recently begun to pay attention to the striking variation in psychology across societies. In his remarkable new book The WEIRDest People in the World, Harvard professor Joseph Henrich notes that people in the West evolved to become particularly individualistic and prosocial beginning in the Middle Ages.2 According to Henrich, their path to prosperity began with the Roman Catholic Church’s family policies (such as bans on cousin marriage), which inadvertently dissolved kinship institutions and made Europeans increasingly free both relationally and residentially. Released from family obligations, people chose their own friends, spouses, and business partners. That, in turn, opened the door for the emergence of institutions such as voluntary associations, guilds, universities, and charter towns, which expanded social networks and acted as collective brains.

As Western societies scaled up, populations became more diverse and innovative, spurred by psychological developments like greater interpersonal trust, less conformity, and less reliance on authority, which helped facilitate the flow of ideas. Today, Westerners in general, and Anglo-Americans in particular, remain relatively individualistic. Geert Hofstede’s widely recognized measure of individualism, based on questions about the importance of personal ambitions and achievements, confirms this; his work also supports the idea that East Asian societies are more collectivist.



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26. China has shed more than 12.5 million manufacturing jobs in the past four years as jobs have moved abroad and robots have taken over much factory work. See R.Z. Lawrence, “China, Like the U.S., Faces Challenges in Achieving Inclusive Growth Through Manufacturing,” China & World Economy 28, no. 2 (March-April 2020): 3-17.

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32. L. Wei, “China’s Xi Ramps Up Control of Private Sector. ‘We Have No Choice but to Follow the Party.’” The Wall Street Journal, Dec. 10, 2020,

33. “China’s Uneven High-Tech Drive: Implications for the United States,” ed. S. Kennedy, PDF file (Washington, D.C.: Center for Strategic & International Studies, February 2020),

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Comment (1)
Jayan R
An interesting article. My comments are as follows;
1. if COllaborative culture was required for Innovation, why was  germany of World War II highly Innovative
2. Isn't the absence of fear of failure most important criteria for new product innovation. Doesn't a Social security network provide that as it may be available in China?