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China overtakes EU: revolution in the power grid – what does that mean for us?
China has replaced the EU as the leading filer of patents for power grid technologies, creating new competitive dynamics.
China overtakes EU: revolution in the power grid – what does that mean for us?
China has established itself as a leader in the development of power grid technologies by overtaking the EU in international patent applications in 2022. According to a study by the European Patent Office (EPO) and the International Energy Agency (IEA), there has been a notable increase in applications in recent years, after previously stagnating. Fatih Birol, the IEA's executive director, highlights the "encouraging growth of innovation" that China is leading, putting increased competitive pressure on other regions. While China is only in fourth place in patent statistics with a share of 12 percent in the period from 2011 to 2022, a clear picture is emerging of the dynamics in the area of critical network infrastructure, where companies such as Siemens and ABB continue to dominate hz.de reported.
In the context of global gross domestic product (GDP), China's increasing dominance is also clear. While the EU still accounted for 23.5 percent of global GDP in 2017, this share has been declining continuously since 1970. China's share rose rapidly over the years from just 1.0 percent in 1970 to 12.7 percent in 2017, an increase of nearly 1,200 percent. This economic transformation is influenced not only by the growth of the population, which has increased from 825 million to 1.41 billion, but also by an above-average positive development of the per capita GDP, which was 7,207 US dollars in 2017. In contrast, the EU and US real GDP per capita remained at about $36,811 and $53,136, respectively, according to data from bpb.de.
Growth in competition
The results of these developments have profound effects on global markets. Competition for innovation and technical advances in the field of electricity networks is intensifying, with China acting as a driving force, redefining international standards through its patent applications and economic advancement. The shift in innovation and the changing landscape of the economy illustrate the shifts in the global power structure that are noticeable in both business and technology.