China and Trump Plan to Kill Innovation from Outer Space

by Braden Kelley

China and Trump Plan to Kill Innovation from Outer Space

First, let me say that this is not a political article, but instead an article about a potential innovation crisis looming just over the horizon thanks to brinkmanship between China and the United States.

Second, let me say this article is not about killer satellites being launched into orbit by the Trump administration or the People’s Republic of China.

Instead this article is about the psychology of a country being backed into a corner, the measures China is likely to take to fight back when they can’t match the United States dollar for dollar in a tariff fight, the current state of the rare earth metals market and its impact on the future of innovation.

Now, some of you might be asking yourself – What the heck are rare earth metals?

Well, as the name might suggest they are metals that are not often found in dense quantities on earth. Some hypothesize that some of the best rare earth metal finds have an extraterrestrial origin. So, some might say that rare earth metals are literally alien, brought to our planet not by little green men (and women) but by blazing hot meteors smashing into the earth. Rare earth metals are so valuable to collectors and to high tech manufacturers that there are groups of modern day Indiana Jones clones out there racing around the world to be the first to claim the next meteor strike before someone else does (see article) and the Chinese government made a conscious choice to invest in trying to corner the market.

Why?

Because rare earth metals are CRUCIAL to all of the technology that empowers the innovation economy.

Here is a 60 Minutes segment from three years ago that CBS recently refreshed and re-aired now that it is again timely given the United States vs. China trade war. It provides a great introduction to rare earth metals and the role they play in the innovation economy:

(updated 60 minutes video available here)

About the only substantial change in the video is that China’s dominance has dropped from 90% of global production to 80% of global production.

Here is a chart showing the production of rare earths in 2018 in the world (data source):

Rare Earth Data 2018

As the chart shows, China has about 40% of the world’s rare earth metals, but is responsible for 75% of the world’s production of rare earth metals. The military machine of the United States relies on rare earth metals to operate, along with green energy, high technology, electric cars, you name it – nearly every innovation direction we’re trying to go in – relies on rare earth metals.

China has cut off countries from rare earth metals before, most notably Japan, and now they are threatening to do it again to the United States (one article highlighting the threat not just to the United States, but to Europe as well). China is also threatening to begin blacklisting individual technology companies not sympathetic to its cause in the battle of egos and stare down between these two economic superpowers. You have to imagine this would include being cut off from rare earth metals.

So, is the innovation train, this pace of unrelenting technological advance and change, about to come a grinding halt?

I guess we’re all about to find out…

 
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About The Author

Braden Kelley is a Director of Design Thinking, Innovation and Transformation at Oracle, and a popular innovation speaker and workshop facilitator. He is the author of two five-star books, Stoking Your Innovation Bonfire and Charting Change, and the creator of a revolutionary new Change Planning Toolkit™. Follow him on Linkedin and Twitter (@innovate).

6 comments

  1. Sorry Braden, but I’m not for one willing to continue selling our soul to an unfair trade partner. They’ve back off so far and they will continue or they will suffer far more than we.

    Far many firms seem more than willing to claim they back social justice for a $ donating and backing the flavor of the month but still have products made essentially by slaves and children.

    It does not go both ways. It’s wrong. I’m for one glad that we are finally demanding a fair game globally.

    It won’t all work out, but thinking somehow that innovation depends solely upon Chinese trade shows little faith in humanity’s ability to transform when required and to stand for something more than the desperate plea for stuff.

    I stand for something more than a $. I also know I and my global human colleagues can innovate around anything and anyone.

    Adam Malofsky, PhD (via the Innovation Excellence group on LinkedIn)
    https://www.linkedin.com/feed/update/urn:li:activity:6543870580846927872/?commentUrn=urn%3Ali%3Acomment%3A(groupPost%3A1953902-6543870580087762945%2C6543898390093197312)

  2. I’m personally very interested in the Rice work on sodium batteries…thoughts on this? It’s the 90 something guy who invented lithium batteries (pardon my bad memory hear at the moment!).

    Adam Malofsky, PhD (via the Innovation Excellence group on LinkedIn)

  3. one recent journal article…

    https://www.sciencedaily.com/releases/2019/04/190419165534.htm

    Adam Malofsky, PhD (via the Innovation Excellence group on LinkedIn)

  4. another…cant find that guy’s name…apologies

    https://www.sciencemag.org/news/2019/04/sodium-batteries-are-one-step-closer-saving-you-mobile-phone-fire

    Adam Malofsky, PhD (via the Innovation Excellence group on LinkedIn)

  5. Interesting. Anything that reduces reliance on one or two countries who happen to mine a particular metal is certainly welcome. Equally desirable will be to find alternatives that are more recyclable and less damaging to extract and process in the first place. China is destroying its environment to dominate the rare earth metals market.

    @innovate

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